A joint stock company is referred to as the form of business organisation where the company’s stock can be purchased and sold by the shareholders of the company.
It is one of the most suitable forms of business organisation forms when business is conducted on a large scale. A joint stock company only exists in law and therefore, is considered as an artificial legal person. It has its own legal identity after its incorporation.
In a joint stock company, the liability of the shareholders is limited to the value of the unpaid share capital in the company.
Following are some of the joint stock company multiple choice questions and answers that will help the students in brushing up their understanding of the concept of business form of joint stock company.
1. A company is formed by
A. Government
B. Directors
C. Promoters
D.Owners
Answer: C
2. The word limited should appear after the name of
A. Partnership
B. Registered company
C. Statutory company
D. Chartered company
Answer: B
3. Deferred shares are generally issued to:
A.Promoters
B.Government
C.General Public
D.Managing agents
Answer: A
4. The minimum members in public limited company are:
A. 4
B. 2
C. 8
D. 7
Answer: D
5. Share premium is shown in the balance sheet as an:
A. Deducted from the asset side.
B. Liability
C. Deduction in paid up capital
D. Asset
Answer: B
6. Share premium money can be used for:
A.Issue of fully paid bonus shares
B.Payment of debentures
C.Payment of dividend
D. Writing of good will
Answer: A
7. Debenture can be issued at:
A. At discount
B.At premium
C. At par
D.All of the above
Answer: D
8. How many members have to sign a memorandum of association in case of a private company?
A. Five
B. Seven
C. Two
D. Ten
Answer: C
9.The official signature of a company is called:
A. Prospectus
B. Debentures
C. Shares
D. Common seal
Answer: D
10. The company is managed by the group of persons known as:
A.Board of directors
B.Group of member
C.Team of shareholders
D.None of the above
Answer: A
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