Companies Act Question for SEBI Grade A 2020
Companies Act Question for SEBI Grade A 2020
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Companies Act Question for SEBI Grade A 2020

SEBI Grade A Companies Act Practice Question Test. Companies Act study material for SEBI Grade A Exam 2020. Costing, Companies Act, Economics, Commerce & Accountancy, Management and Finance Notes PDF for SEBI Grade A Preparation 2020. As we all know that The Security Exchange Board of India (SEBI) has released the SEBI Grade A 2020 Notification for the recruitment of 140+ Assistant Managers across the country.

If you are preparing for SEBI Grade A 2020, you will come across a section on “Costing, Companies Act and Economics”. In this post you will attempt Companies Act for your SEBI Grade A Preparation 2020 . If you prepare this thoroughly, you can very easily crack SEBI Grade A 2020.

SEBI Grade A 2020 – Companies Act Question | Set- 1

Solving the SEBI Grade A Companies Act Question will help the candidates to get acquainted with different types of questions. SEBI Grade A Companies Act Question will also increase the precision and accuracy which saves a good amount of time in the actual exam.


1. Ltd. has appointed 15 directors and now wants to appoint 1 more director. Can it do so, if yes, in which manner?

A. By a special resolution
B. By an ordinary resolution
C. By a board resolution
D. Any of the above
E. None of these

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Correct Answer: A. By a special resolution

Explanation: As per Section 149, a director over prescribed limit (15 maximum directors of the company) can be appointed only by a special resolution.

2. As per the Companies Act, which type of company must appoint a director elected by small shareholders?

A. Public company
B. Private company
C. Listed company
D. All of the above
E. None of these

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Correct Answer – C. Listed company

Explanation: As per Section 151, a listed company must mandatorily appoint a director elected by small shareholders. A small shareholder is a person who is holding shares of nominal value amounting to a maximum of Rs. 20,000 in a public company.

3. Every listed company shall have at least _____ of the total number of directors as independent directors according to Companies Act 2013

A. One-fourth
B. One-third
C. Half
D. One-tenth
E. None of these

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Correct Answer – B. One-third

Explanation: According to Section 149 – Appointment & Qualification of Directors, every listed public company shall have at least one-third of the total number of directors as independent directors.

4. With reference to an application to the Central government, ‘DIN’ is allotted to directors. What does ‘I’ stand for?

A. Index
B. Inquiry
C. Identification
D. Individual
E. None of these

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Correct Answer – C. Identification

Explanation:  Section 154 – DIN stands for Director Identification Number.

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5. Minimum number of directors for a public company are:

A. 2
B. 3
C. 7
D. 15
E. None of these

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Correct Answer – B. 3

Explanation: According to Section 149, every company shall have (a) a minimum number of three directors in the case of a public company , two directors in the case of a private company, and one director in the case of a One Person Company; and (b) a maximum of fifteen directors: Provided that a company may appoint more than fifteen directors after passing a special resolution.

6. As per section 149(3), at least 1 resident director who has stayed in India for _____ on board is mandatory.

A. Not less than 182 days in previous calendar year
B. Not less than 182 days in current calendar year
C. Not less than 182 days in current financial year
D. Not less than 182 days in previous financial year
E. None of these

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Correct Answer – C. Not less than 182 days in current financial year

Explanation: This is a tricky question. As per barebones Act “Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year. ” Answer should be (a). We gave the answer as (c) because ICAI has taken the view that the stay of 182 days is to be considered in the current financial year. Hopefully, such a question won’t come. But if it does come, it is up to you as to what answer you will be giving.

7. A person can be a director in 20 companies excluding –

A. Dormant Companies
B. Section 8 companies
C. Section 11 companies
D. Both (a) and (b)
E. None of these

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Correct Answer – D. Both (a) and (b)

Explanation: MCA through its notifications has clarified that Section 165(1)9i) [limiting a person to be director of 20 companies] of the Companies Act 2013, shall not apply to Section 8 companies or dormant companies.

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8. Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his DIN and a declaration that he is not disqualified to become director under this act ____

A. Within 15 days of his appointment as a director
B. Within 30 days of his appointment as a director
C. Within 60 days of his appointment as a director
D. At any time before his appointment
E. None of these

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Correct Answer – D. At any time before his appointment

Explanation: person can be a director only after obtaining DIN [Section 152(3) and Section 152(4)]

9. Every applicant, who intends to be appointed as director of an existing company shall make an application electronically in Form ____, to the central government for allotment of DIN.

A. DIR 3
B. DIR 3A
C. DIR 3C
D. DIR 2
E. None of these

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Correct Answer – DIR 2

Explanation:  Democratic approaches rely on taking on board other people’s opinions and views.

10. First board meeting should be held within _____ from the date of incorporation of company.

A. 30 days
B. 60 days
C. 90 days
D. 120 days
E. None of these

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Correct Answer – A. 30 days

Explanation: Section 173(1): Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.

Also Attempt: SEBI Grade A 2020 – Costing Practice Question Set Here


Best Books for SEBI Grade A 2020

Books for SEBI Grade A Officer 2020 Download Link
A Complete Book for SEBI Grade A (Assistant Manager) 2020 (VOL. I) of Commerce & Accountancy, Management and Finance  

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“A Complete Book for SEBI Grade A (Assistant Manager) 2020 (VOL. II) for Costing, Companies Act and Economics” Click Here