MCQs on Prospectus // MCQs on Company Law

 Prospectus

 1. Extra Limited is a growing Company and requires additional funds for expansion from time to time. They are following the same process for making an offer to public and then issue those shares. This is very time and energy consuming for them. Kindly advise them if there is any way out. 

a) During first offer they shall file prospectus with a validity on one year, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required; 

b) During first offer they shall file prospectus with a validity on two years, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required; 

c) During first offer they shall file shelf prospectus with a validity on one year, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required; 

d) During first offer they shall file shelf prospectus with a validity on two years, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required; 

2. Morgan Limited decided to make an offer for purchase of securities. Application Forms for the purchase were issued to public. However, it was not accompanied by an abridged prospectus. For this default Company is liable for penalty. How much penalty Company has to bear? 

a) Rs. 25,000

 b) Rs. 50,000 

c) Rs. 100,000 

d) Rs. 500,000 

3. A private company may issue securities by any of these ways except 

a) Public offer 

b) Rights issue 

c) Bonus issue 

d) Private placement 

4. Registrar of companies shall refuse to register a prospectus: 

a) If it is not dated 

b) Contains statement of an expert who has not signed it 

c) Contains information which is six month old 

d) In all the above cases 

5. A prospectus issued in the form of advertisement must state: 

a) The objects for which the company has been formed

 b) The liability of members 

c) The amount of share capital of company 

d) All of the above  

6. Shelf prospectus remains valid upto 

a) 6 months 

b) 1 year 

c) 2 years 

d) 5 years 

7. Where a company makes an offer of securities by a prospectus without specifying the number of securities or the price of such securities such a prospectus is

 a) Shelf prospectus 

b) Red herring prospectus 

c) Abridged prospectus

 d) Deemed prospectus 

8. When the company issues an abridged prospectus a copy of the prospectus can be demanded from the company 

a) Before the opening of the subscription list 

b) After the opening of the subscription list 

c) Before the closing of the subscription list 

d) After the closing of the subscription list 

9. The prospectus once filed with the ROC must be issued within

a) 30 days 

b) 60 days 

c) 90 days 

d) 120 days 

10. A copy of the prospectus must be filed with the Registrar 

a) Before it is issued to the public 

b) Anytime before or after the issue to the public 

c) Anytime before the opening of the list 

d) Anytime before the closing of the issue 

11. In case of mis-statement in the prospectus the following persons shall be liable: 

a) is a director of the company at the time of the issue of the prospectus 

b) is a promoter of the company; 

c) is an expert 

d) all of these 

12. When the company offers the securities for sale to the public the document by which the issue is made shall be regarded as deemed prospectus if: 

a) the offer is made within 6 months after allotment

 b) on the date of allotment the entire consideration for the shares was not paid 

c) both of these 

d) if the company declares that it is the prospectus of the company 

13. A company wants to offer securities by issuing a single prospectus for all the subsequent issues. Any change which takes place between the first and second or subsequent issue shall be highlighted in this document which is known as 

a) shelf prospectus 

b) information memorandum 

c) red herring prospectus 

d) abridged prospectus 

14. A public company may offer shares by way of 

a) public issue 

b) private placement 

c) bonus issue 

d) all of these