Commercial Applications
Statement I : The capital share of a company is generally divided into a large number of shares of small value.
Statement II : These shares can only be bought by noble people of the society.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Answer
Only I is correct
Reason — Statement I is correct because the share capital of a company is generally divided into a large number of shares of small value, which is known as the feature of corporate finance. Statement II is wrong because these shares are not restricted to noble people; they are purchased by a large number of people from different walks of life. The small value of shares makes them affordable to ordinary investors as well.
Related Questions
Why are joint stock companies better suited for large-scale production than partnerships?
- Joint ownership of property.
- Larger capital resources and professional management.
- Direct involvement of shareholders in management.
- Fewer legal requirements for incorporation.
A company provides its members with limited liability but requires them to contribute a specified amount in case of winding up. What type of company is this?
- Company Limited by Guarantee
- Unlimited Company
- Private Company
- One Person Company
A joint stock company faces criticism for holding back crucial financial information from its minority shareholders while making key decisions. What principle of corporate governance is being violated?
- Transparency and accountability
- Perpetual succession
- Limited liability
- Profit-sharing among shareholders
The Reserve Bank of India operates under a special law enacted by the Parliament. Under which category does this organization fall?
- Chartered Company
- Statutory Company
- Registered Company
- Unlimited Company