Company Law Viva Questions and Answers
Unit 1: Company - Nature and Scope
Q: What is a company?
A: A company is a legal entity formed under the Companies Act, having a separate legal personality,
perpetual succession, and limited liability.
Q: What is the doctrine of lifting the corporate veil?
A: It allows courts to look beyond the company's separate legal personality to hold individuals liable in case of
fraud or evasion of law.
Q: Distinguish between company and partnership.
A: Company: Separate legal entity, perpetual succession, governed by Companies Act. Partnership: No
separate legal identity, dissolves on death/retirement, governed by Indian Partnership Act.
Q: What is the significance of the case Salomon v. Salomon?
A: It established the principle of a company as a separate legal entity distinct from its members.
Unit 2: Procedure for Incorporation of Companies
Q: What is the Memorandum of Association (MOA)?
A: MOA is the charter document of a company that defines its scope of operations and objectives.
Q: What is Articles of Association (AOA)?
A: AOA contains internal rules and regulations for the management of a company.
Q: Who is a promoter?
Company Law Viva Questions and Answers
A: A person who conceives the idea of a company, undertakes formation tasks, and takes preliminary steps
before incorporation.
Q: What is the Doctrine of Indoor Management?
A: Outsiders dealing with a company are entitled to assume internal procedures have been properly followed.
Q: What is the Doctrine of Constructive Notice?
A: It presumes that anyone dealing with a company has read and understood its MOA and AOA.
Unit 3: Prospectus, Shares, Members and Directors
Q: What is a prospectus?
A: A legal document issued to the public offering company securities, containing all material information.
Q: What are the types of shares?
A: Equity shares and Preference shares.
Q: Who is a shareholder?
A: A person who owns shares in a company and has certain rights and liabilities.
Q: What is Director Identification Number (DIN)?
A: A unique identification number issued to an individual to be appointed as a director of a company.
Q: What is the role of directors?
A: Directors manage and control the company's affairs and act as agents/trustees of the company.
Company Law Viva Questions and Answers
Unit 4: Law Relating to Debt and Finance
Q: What is a debenture?
A: A debenture is a debt instrument used by companies to borrow money, often secured and repayable with
interest.
Q: What is CSR (Corporate Social Responsibility)?
A: It is a company's responsibility to contribute to societal development by spending a portion of its profits on
social activities.
Q: What is the role of NFRA?
A: The National Financial Reporting Authority regulates and monitors accounting and auditing standards.
Q: Who appoints the auditor in a company?
A: The first auditor is appointed by the Board within 30 days; subsequent auditors are appointed by
shareholders.
Unit 5: Amalgamation, Winding Up & Administrative Regulations
Q: What is amalgamation?
A: The process of merging two or more companies into one entity to achieve synergies.
Q: What is winding up?
A: The legal process of dissolving a company by selling off assets to pay liabilities.
Q: What is the role of the Official Liquidator?
Company Law Viva Questions and Answers
A: To manage the winding-up process, including selling assets and distributing proceeds.
Q: What is NCLT?
A: National Company Law Tribunal - a quasi-judicial body that handles corporate disputes, including
insolvency, mergers, and shareholder issues.
Q: What is the significance of SEBI?
A: SEBI regulates the securities market and protects investor interests.
Q: What are penalties under the Companies Act 2013?
A: Penalties can include fines, imprisonment, or both for non-compliance with the Act.
Q: What is the role of the Serious Fraud Investigation Office (SFIO)?
A: Investigates serious frauds relating to companies.
