Legal Aspects of Business MCQ Questions and Answers Part – 1
Legal Aspects of Business MCQ Questions and Answers Part – 2
Legal Aspects of Business MCQ Questions and Answers Part – 3
51. In which year India’sIT Act came into existence?
A. 2000
B. 2001
C. 2005
D. 2013
ANSWER: A
52. ________ agency is the most common form of agency.
A. Incidental
B. Express
C. Apparent
D. Implied
ANSWER: B
53. A(n) ________ is a contract a principal and agent enter into that says the principal cannot employ another agent other than the one stated.
A. ratified contract
B. exclusive principal contract
C. apparent agency contract
D. exclusive agency contract
ANSWER: D
54. Agency by ________ occurs when (1) a person misrepresents himself or herself as another’s agent when in fact he or she is not and (2) the purported principal accepts the unauthorized act.
A. indemnification
B. ramification
C. ratification
D. indoctrination
ANSWER: C
55. Apparent agency is also referred to as ________.
A. agency by estoppel
B. express agency
C. authorized agency
D. agency by default
ANSWER: A
56. What is the full form of ITA-2000?
A. Information Tech Act -2000
B. Indian Technology Act -2000
C. International Technology Act -2000
D. Information Technology Act -2000
ANSWER: D
57. Under which section of IT Act, stealing any digital asset or information is written a cyber-crime.
A. 65
B. 65D
C. 70
D. 17
ANSWER: A
58. What is the punishment in India for stealing computer documents, assets or any software source code from any organization, individual, or from any other means?
A. 6 months of imprisonment and a fine of Rs. 50,000
B. 1 year of imprisonment and a fine of Rs. 100,000
C. 2 years of imprisonment and a fine of Rs. 250,000
D. 3 years of imprisonment and a fine of Rs. 500,000
ANSWER: D
59. The common law doctrine of ________ is based on the legal theory of ________ liability.
A. respondeat superior; nefarious
B. respondeat superior; vicarious
C. respondeat inferior; nefarious
D. respondeat inferior; vicarious
ANSWER: B
60. What is the updated version of the IT Act, 2000?
A. 2007
B. 2008
C. 2010
D. 2012
ANSWER: B
61. A(n) ________ agency results if a third party entering into a contract knows (1) that the agent is acting as an agent for a principal and (2) the actual identity of the principal.
A. partially disclosed
B. undisclosed
C. inherently disclosed
D. fully disclosed
ANSWER: D
62. A(n) ________ agency occurs if the agent discloses his or her agency status but does not reveal the principal’s identity and the third party does not know the principal’s identity from another source.
A. fully disclosed
B. partially disclosed
C. undisclosed
D. inherently disclosed
ANSWER: B
63. A principal accepts an agent’s unauthorized contract through ________ of the contract.
A. subornation
B. subrogation
C. ramification
D. ratification
ANSWER: D
64. Principals often employ persons and businesses that are not their employees to perform certain tasks on their behalf. These persons and businesses are called ________ contractors.
A. dependent
B. sub
C. general
D. independent
ANSWER: D
65. Which of the following is not a method of terminating an agency relationship by acts of the parties?
A. mutual agreement
B. bankruptcy of the principal
C. lapse of time
D. achievement of agency purpose
ANSWER: B
66. Which of the following is not a method of terminating an agency relationship by operation of law?
A. death of either the principal or the agent
B. insanity of either the principal or the agent
C. mutual agreement
D. bankruptcy of the principal
ANSWER: C
67. What type of cyber-crime, its laws and punishments does section 66 of the Indian IT Act holds?
A. Cracking or illegally hack into any system
B. Putting antivirus into the victim
C. Stealing data
D. Stealing hardware components
ANSWER: A
68. he Sale of Goods Act, was enacted on
A. 15 March 1930
B. 18 April 1930
C. 5 April 1980
D. None of these
ANSWER: A
69. The Sale of Goods Act, was enforced on
A. 1st day of May, 1930
B. 1st day of June, 1930
C. 1st day of July, 1930
D. None of the above
ANSWER: C
70. The Sale of Goods Act, 1930 is based on
A. US Sale of Goods Act
B. English Sale of Goods Act
C. Indian Sale of Goods Act
D. None of the above
ANSWER: B
71. Section 2, of The Sale of Goods Act, is about
A. definitions
B. articles
C. clauses
D. none of these
ANSWER: A
72. As per-section 2(1), a person who buys or agrees to buy goods is called
A. buyer
B. seller
C. customer
D. none
ANSWER: A
73. The voluntary transfer of possession from one person to another is called
A. delivery
B. transfer
C. hand over
D. none
ANSWER: A
74. As per section 2 sub-section 8, of the Sales of Goods Act, insolvent means a person
A. Who has ceased to pay his debts in the ordinary course of business
B. Or can not pay his debts as they become due
C. Both (a) and (b)
D. None of above
ANSWER: C
75. As per section 2(12), of the Sale of Goods Act, quality of goods include
A. State of goods
B. Conditions of goods
C. Both (a) and (b)
D. None of above
ANSWER: C
76. The goods identified and agreed upon at the time a contract of sale is made are called
A. ordinary goods
B. specified
C. opportunity
D. none of the above
ANSWER: B
77. There are_____, essential requisites of sale
A. 2
B. 3
C. 5
D. none of the above
ANSWER: D
78. Acceptance may be revoked by the acceptor
A. at anytime
B. before the letter of acceptance reaches the offerer
C. before the death of other party
D. none
ANSWER: B
79. consideration must move at the desire of—-
A. the promisor
B. the promisee
C. promisor or any other party
D. any other party
ANSWER: A
80. An agreement with a minor is—-
A. valid
B. void
C. voidable
D. none
ANSWER: B
81. on attaining the age of majority a minor’s agreement
A. becomes void
B. becomes valid
C. can be ratified by him
D. cannot be ratified by him
ANSWER: D
82. A contract by an idiot is—-
A. voidable
B. enforceable
C. invalid
D. void ab initio
ANSWER: D
83. The unlawful detention of any property is ——
A. undue influence
B. fraud
C. mistake
D. none of these
ANSWER: A
84. If a new contract is substituted in place of an existing contract—
A. alteration
B. rescission
C. waiver
D. novation
ANSWER: D
85. In case of breach of warranty,the buyer can —–
A. repudiate
B. return the goods
C. claim damages
D. none
ANSWER: C
86. An administrator is appointed to realise a hierarchy of objectives. What is an administrator’s first and principal objective?
A. To achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up.
B. To realise property in order to make a distribution to one or more secured creditors.
C. To rescue the company as a going concern.
D. To wind the company up and distribute the assets to persons entitled to them.
ANSWER: C
87. An administrator can be appointed in one of several different ways. Which ONE of the following is not a valid method of appointment?
A. An administrator can be appointed by the court.
B. An administrator can be appointed by a floating charge holder.
C. An administrator can be appointed by the company’s auditor.
D. An administrator can be appointed by the company.
ANSWER: C
88. Regarding the proposal for a company voluntary arrangement, which ONE of the following statements is NOT true?
A. If the company is in administration, the proposal will be made by the administrator.
B. If the company is in liquidation, the proposal will be made by the liquidator.
C. If the company is neither in administration or liquidation, the proposal can be made by the directors.
D. If the company is neither in administration or liquidation, the proposal can be made by the members or creditors.
ANSWER: C
89. Regarding the appointment of a receiver, which ONE of the following statements is NOT true
A. A receiver may be a natural person or a body corporate.
B. A charge holder can appoint a receiver if the instrument that created the charge states so.
C. The court can appoint a receiver upon an application from a creditor.
D. An undischarged bankrupt cannot normally act as a receiver.
ANSWER: A
90. Which ONE of the following does NOT have the right to petition the court for a compulsory winding-up order?
A. A member of the company.
B. Any creditor of the company.
C. The directors of the company.
D. The auditor of the company.
ANSWER: D
91. A compulsory winding-up order can only be made on a number of specified grounds. The majority of such orders are made on the basis of which ground?
A. Where the company has resolved, by special resolution, to compulsorily wind up the company.
B. Where the company is an ‘old public company.’
C. The company is unable to pay its debts.
D. Where the company does not commence business within a year from its incorporation.
ANSWER: C
92. Which ONE of the following statements describes the difference between a members’ voluntary winding up and a creditors’ voluntary winding-up
A. If a majority of the directors make a declaration of solvency, the winding up will be a members’ voluntary winding up. If no such declaration is made, it will be a creditors’ voluntary winding up.
B. A creditors’ voluntary winding up is commenced by the creditors, whereas a members’ voluntary winding up is commenced by the members.
C. A members’ voluntary winding up is commenced by passing a special resolution, whereas a creditors’ voluntary winding-up does not require a special resolution.
D. None of the above
ANSWER: A
93. How does fraudulent trading under the Companies Act 2006 differ to fraudulent trading under the Insolvency Act 1986?
A. Fraudulent trading under the Companies Act 2006 can apply at any time, whereas fraudulent trading under the Insolvency Act 1986 can only apply during the course of a winding-up.
B. Fraudulent trading under the Companies Act 2006 imposes civil liability only, whereas fraudulent trading under the Insolvency Act 1986 imposes criminal liability also.
C. There is no difference – both provisions are identical.
D. Fraudulent trading under the Companies Act 2006 only applies to registered companies, whereas fraudulent trading under the Insolvency Act can also apply to partnerships and sole proprietorships.
ANSWER: A
94. compromise of disputed claims
A. results in a void agreement
B. good consideration
C. not a good consideration
D. none of these
ANSWER: B
95. Which two types of business structure are created via a process of incorporation?
A. Companies and sole proprietorships.
B. Partnerships and limited liability partnerships.
C. Companies and limited liability partnerships.
D. Companies and partnerships.
ANSWER: C
96. The main object of a contract of sale is —-
A. transfer of possession
B. transfer of property
C. delivery of goods
D. payment of price
ANSWER: B
97. An application to incorporate a company by registration must contain certain information. Which ONE of the following pieces of information is not required?
A. Whether the member’s liability will be limited or unlimited.
B. The names of the company’s proposed officers.
C. The intended address of the company’s registered office.
D. The proposed objects of the company.
ANSWER: D
98. Concerning a company’s liability, which ONE of the following statements is true?
A. A company cannot be convicted of a crime that requires proof of mens rea.
B. A company will not be found liable for the acts of its directors – the directors will be personally liable instead.
C. A company will only be vicariously liable for the acts of its employees if the employee was sufficiently senior within the company.
D. Where liability requires a level of knowledge, the liability of employees and directors can be attributed to the company.
ANSWER: D
99. In a sale, if the goods are destroyed, the loss falls on________________
A. The buyer.
B. The seller.
C. Partly on the buyer and partly on the seller.
D. The seller if price has not been paid.
ANSWER: A
100. What is ‘corporate personality?’
A. Corporate personality means that the members in general meeting are regarded by the law as a person.
B. Corporate personality means that the board of directors is regarded by the law as a person.
C. Corporate personality means that the company as an entity is regarded by the law as a person.
D. Corporate personality means that all of the companies within a corporate group are regarded by the law
as one person.
ANSWER: C
