Thursday, September 03, 2009
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Join Date: Sep 2007
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CE-2005
MERCANTILE LAW
COMPULSORY QUESTION
8. Write the correct answer in the Answer Book. Do not reproduce the question.
(1) Talal is forming a business which he wants to control completely. He knows nobody else with whom he wishes to work, he values his privacy, and he dislikes formality, paper work, state filing requirements, and lawyers. What type of business organization should he prefer?
(b) Sole Proprietorship
(2) The Articles of Association of a company contain:
(c) Information about the corporation, including its organization and functions.
(3) A partnership involves three essential elements. Which of the following is not one of those elements?
(b) Limited liability for the liabilities of the firm
(4) Rashid, Shahid and Talal agree to form a computer business. Rashid agrees to manage the business and to assume full persona; liability. Shahid and Talal agree to invest in the firm but to be liable only to that extent. These three have formed :
(b) a limited liability partnership
(5) The members of a limited partnership include:
(a) general and limited partners
(6) A bearer cheque may be negotiated by:
(a) Mere delivery
(7) The responsibility for overall management of a company belongs to:
(c)the board of directors
(8) The best definition of a quorum is which of the following?
(b) It is the number of members of a company that must be present before business may be transacted.
(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?
(c)Partnership assets
(10)The board of directors does not have responsibility over which of the following areas?
(d) None of these
(11)A found a wallet full of money on a roadside and upon finding the address of the owner in the wallet he returned it to its owner. When he came back he read the announcement of a reward for the return of such wallet in the newspaper:
(b) The owner is not liable to pay him the reward
(12) Muhsin is considering forms of business organization for his law firm. One advantage of the limited liability partnership form is that it allows the limited partners to avoid personal liability for:
(c) the obligations of the firm within the limit their contributions to the capital
(13) A’s son has forged B’s name to a pronote. B under threat of prosecuting A’s son demanded that A should sell him his house that is worth Rs. 1000,000/- for 300,000/-. A agrees with the proposal; The contract is:
(b) Voidable
(14) The best, simple definition of a contract is:
(b) a legally enforceable agreement
(15) Salman signs a written contract with Khalid giving him the right to cast his votes in the election for the directors of Hashiya Limited, whose shares Salman holds. This agreement between Salman and Khalid is known as:
(b) a proxy
(16) A sent a proposal to B by post for the sale of his house. B accepted the offer by post. A may revoke his proposal at any time before :
(b) B posts the letter of acceptance
(17) Danish offers to sell to Sadiq a mobile phone for Rs. 550. Sadiq tells Danish that he will take the phone for Rs. 450. Nothing further is said and the next day, Danish demands Rs. 450 from Sadiq in exchange for the phone. Choose the correct statement:
(c) Sadiq is not bound to pay as there is no contract
(18) If you want to start a partnership what formal requirements do you have to meet?
(b) You do not need to satisfy any formal requirements
(19) The relation between the partners of a firm is of:
(c) Principal and Agent
(20) A bearer of instrument may be negotiated by:
(a) Mere delivery
Regards
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