Business Law MCQs

1. Annual general Meeting is required to be held---

a) By a private company only

b) By a public company only

c) By a company limited by guarantee only

d) By all kinds of companies

2. An acceptance is complete and effective only when it has been---

a) Communicated to the offerer

b) Merely mentally accepted

c) Externally manifested

d) Kept in the drawer

3. Name of a company can be changed by passing a special resolution and with the approval of---

a) The company law tribunal

b) The Central Government

c) The Registrar of Companies

d) None of these

4. Which of the following is a mode of discharge of contract---

a) By impossibility of performance

b) By lapse of time

c) By breach of contract

d) All of these

5. Limited liability means liability of its---

a) Debtors is limited

b) Creditors is limited

c) Members is limited

d) Debenture holders is limited

6. "In a contract of sale, property means---"

a) Raw-materials

b) Movable goods

c) Ownership

d) Immovable property

7. "The goods which are yet to be acquired by the seller, are called---"

a) Existing goods

b) Contingent goods

c) Unascertained goods

d) Future goods

8. A contract becomes voidable if it has been caused by---

a) Coercion

b) Fraud

c) Undue Influence

d) All of them

9. "If the goods have perished, the contract of sale of such specific goods, will become---"

a) Voidable

b) Void

c) Illegal

d) None of these

10. Articles can be altered by---

a) Ordinary resolution

b) Special resolution

c) Resolution requiring special notice

d) Unanimous resolution

11. A contract entered into between the parties by words is called---

a) An express contract

b) An implied contract

c) A quasi contract

d) An excited contract

12. Acceptance of an offer is complete as against the offeror as soon as---

a) The offerer knows about it

b) The letter of acceptance is posted

c) The letter of acceptance is signed by offeree

d) The letter is handed over to a delivery person

13. If a company fails to pay its debts suit can be filed against the---

a) Directors

b) Members

c) Officers

d) Company

14. A contract with a minor is---

a) Illegal

b) Valid

c) Void

d) Voidable

15. Who is liable for the supply of necessaries to a minor---

a) His guardian

b) His manager

c) His property

d) He himself

16. A prospectus is issued---

a) By a private limited company

b) By a public limited company

c) By a company limited

d) by guarantee None of these

17. "When, before the contract becomes due for performance, the promisor declares his intention of not

performing his promise, it is called---"

a) Remission

b) Waiver

c) Alteration

d) Anticipatory breach

18. A bailment cannot be made about---

a) Car

b) Furniture

c) Money

d) Television

19. "The damages which arise in the usual course of things happening from the breach of contract, are

called---"

a) Remote damages

b) Ordinary damages

c) Special damages

d) Nominal damages

20. "When a person is employed to represent another in dealings with third person, it is a contract

of---"

a) Bailment

b) Guarantee

c) Agency

d) Pledge

21. Which of the following is not an essential element of a contract of sale---

a) Goods as subject matter

b) Transfer of property in goods

c) Price

d) Railway receipts

22. "In return for a new television, Raju agrees to give his old television valued at Rs. 3,000 and an

amount of cash worth Rs. 5,000 to Ganesh. This is a---"

a) Barter

b) Exchange

c) Contract of sale of goods

d) Sale of approval

23. Which of the following rights is held by an unpaid seller---

a) Right of lien

b) Right of stoppage in transit

c) Right of resale

d) All of these

24. "After exercising the right of lien, the seller can resell the goods of perishable nature---"

a) After giving 7 days notice of resale to buyer

b) After giving 1 week s notice

c) Without giving any notice

d) None of these

25. Which of the following is not a remedy for breach of contract---

a) Rescission of the contract

b) Restitution of benefit

c) Suit for damages

d) Alteration of the contract

26. A contract by which one party promises to save the other from loss is called---

a) Contract of guarantee

b) Contract of indemnity

c) A quasi contract

d) None of these

27. Surety s liability is---

a) Primary

b) Secondary

c) Absolute

d) None of these

28. Crossed cheques payable to bearer are negotiated by---

a) Endorsement and delivery

b) Delivery

c) Assignment

d) None of these

29. "In a contract of sale, which of the following is treated as implied condition---"

a) That the seller has title to goods

b) That goods are similar to description

c) That goods are according to sample shown

d) All of these

30. Consideration must move at the desire of---

a) The promisor

b) The promisee

c) A third party

d) None of them

31. Which of the following does not relate to termination of agency by operation of law ---

a) Death of principal

b) Insolvency of principal

c) Destruction of subject-matter

d) Revocation of authority by the principal

32. Which of the following sentence is a valid promissory note---

a) "I promise to pay Mohan or order Rs. 1,000."

b) "I promise to pay Hari Rs. 2,000 worth of shares.."

c) "I promise to pay Naraynan in East India Bonds"

d) "I promise to pay Rakesh Rs. 5,000 and to deliver 50 kg of sugar."

33. "A stipulation collateral to the main purpose of the contract, is called a---"

a) Condition

b) Warranty

c) Guarantee

d) None of these

34. "A person who receives a negotiable instrument for consideration, before maturity, and in good faith, is called_ _ _ _"

a) Holder for value

b) Holder

c) Holder in due course

d) None of these

35. A director must vacate his office if he fails to obtain qualification shares within---

a) 1 week

b) 2 weeks

c) One month

d) 2 months

36. Which of the following rights are available to a finder of goods---

a) Right of lien

b) Right to file a suit for reward

c) Right of sale of goods

d) All of these

37. A private company has at least

a) 7 members

b) 3 members

c) 3 directors

d) 2 members

38. A cheque payable to order may be negotiated---

a) By delivery

b) By endorsement

c) By endorsement and delivery

d) None of these

39. Which of the following endorsements is invalid

a) Restrictive endorsement

b) Conditional endorsement

c) Special endorsement

d) Partial endorsement

40. "When a cheque bears across its face an addition of the words & between two parallel transverse

lines, it is called"

a) Special crossing

b) Restrictive crossing

c) General crossing

d) Double crossing