MCQ (2010)

(i) A signs promissory instrument in the following terms:
(a) Mr. B I.O.U. Rs.1000
(b) I promise to pay Rs. 500 seven days after my marriage with C
(c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received
(d) I promise to pay Rs. 500 to B and to deliver my black horse on 1st January next
(e) None of these

(ii) How many parties are there to a “Promissory note” and a “bill of exchange”?
(a) There are three parties to a “Promissory note” and four to a “bill of exchange”
(b) There are four parties to a “Promissory note” and three to a “bill of exchange
(c) There is one party to a “Promissory note” and two to a “bill of exchange”
(d) There are two parties to a “Promissory note and three to a bill of exchange”
(e) None of these

(iii) In a cheque issued by A to B, amount is stated differently in figures and in words:
(a) the amount stated in words shall be the amount ordered to be paid
(b) the amount stated in figures shall be the amount ordered to be paid
(c) the cheque will be returned to the bearer by the banker for correction by the drawer
(d) None of these

(iv) When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is:
(a) Valid (b) void
(c) Voidable at the option of a party whose consent was so caused
(d) Partially void
(e) None of these

(v) A Voidable contract is:
(a) An illegal agreement (b) Partly valid agreement
(c) Void ab initio (d) None of these

(vi) A minor in a firm enjoys the following rights:
(a) He may be admitted to the benefits of partnership
(b) He cannot have access to and inspect and copy any of the accounts of the firm
(c) None of these

(vii) A fully paid share-warrant of a company limited by shares is to be treated like a:
(a) Cheque (b) negotiable instrument (c) Bill of Exchange
(d) None of these

(viii) A private company can be incorporated by:
(a) 2 persons (b) 3 persons (c) 7 persons (d) None of these

(ix) A public company must have at least:
(a) 5 persons (b) 7 persons (c) 9 persons (d) None of these

(x) A private company cannot have more than:
(a) 20 members (b) 30 members (c) 50 members
(d) None of these

(xi) Eliason V. Hamshaw (1819) Sup Ct US 4 wheat on 225 deals with:
(a) Counter proposed (b) Implied acceptance (c) Manner of acceptance
(d) None of these

(xii) A and B contract to marry each other. Before the time fixed for the marriage A goes mad. In such a case the contract is:
(a) Void (b) Voidable (c) Valid (d) None of these

(xiii) The maxim of Caveat Emptor in a contract of sale means:
(a) The seller guarantees the quality or fitness for any particular purpose supplied
(b) The buyer himself takes the risk as to the quality and condition of the goods
(c) There is an implied condition that the buyer can repudiate the contract at his option
(d) None of these

(xiv) A agrees to sell to B “”a hundred tons of oil” –the agreement is:
(a) Valid (b) Void (c) Voidable
(d) Partially valid (e) None of these

(xv) An agreement entered into before marriage between a Muslim wife and husband that the wife shall be at liberty to live with her parents after marriage is:
(a) Valid
(b) Void
(c) Voidable at the option of husband
(d) None of these

(xvi) A promises to obtain for B an employment in the Public Service and promises to pay rupees 1000 to A. The agreement is:
(a) Valid (b) Void (c) Voidable (d) None of these

(xvii) A void contract is:
(a) An illegal agreement (b) Partly valid agreement
(c) Ceased to be a valid agreement (d) None of these

(xviii) An agreement to pay one hundred rupees to a holy man for prayers for the success of a suit in a court is:
(a) Valid (b) Void (c) Voidable
(d) Partially Valid (e) None of these

(xix) A, for natural love and affection, promises to give his son B, Rs.100,000, and puts his promise to B into writing and registers it. Will the contract be:
(a) Valid (b) Void (c) Partially Valid (d) None of these

(xx) A contract B to sell his horse for Rs.500 by 10th January 2010. The horse so contracted dies on 8th January 2010. The contract is:
(a) Valid (b) Void (c) B can sue A for compensation
(d) A is liable for damages (e) None of these

Corrections are most Welcome...

(PART-I MCQs) 2011

(i) Which of the following contracts is Voidable, where:
(a) A party is induced by undue influence
(b) One party under mistake of fact
(c) Both parties under mistake of fact (d) None of these

(ii) In case of willful wrong a sub-agent is responsible to:
(a) Agent (b) Principal (c) Sole agent

(iii) A tender notice amounts to:
(a) Proposal (b) Offer (c) Invitation

(iv) A contract to sell the property by a minor through guardian is:
(a) Void (b) Voidable (c) Valid

(v) How many parties are there in a contract of guarantee?
(a) 5 (b) 4 (c) 3 (d) None of these

(vi) Which of the following is eligible to become director of a company?
(a) Minor (b) Un-discharged insolvent
(c) Person representing a creditor (d) None of these

(vii) Extra-ordinary general meeting of a company includes:
(a) Annual general meeting (b) Statutory meeting
(c) Plenary meeting (d) None of these

(viii) Petition for winding up of a company may be moved by:
(a) Auditor General (b) Advocate General
(c) Company Judge (d) None of these

(ix) The Companies Act repealed by the Companies Ordinance, 1984 pertained to the year:
(a) 1930 (b) 1933 (c) 1935 (d) None of these

(x) Penalty for improper use of word “Limited” is:
(a) Fine (b) Imprisonment (c) Imprisonment with fine (d) None of these

(xi) In which of the following an arbitration agreement is not discharged by the death of party:
(a) Voluntary (b) Statutory (c) Contractual (d) None of these

(xii) The assent of arbitrator appointed by court is:
(a) Optional (b) Not required (c) Necessary (d) None of these

(xiii) The number of Arbitration Act, 1940 is:
(a) XI (b) XV (c) XX (d) None of these(X of 1940)

(xiv) Nature of misconduct justifying removal of arbitrator should be:
(a) Legal (b) Moral (c) Procedural (d) None of these

(xv) Suit by unregistered firm against third party is:
(a) Maintainable (b) Barred (c) Permissible (d) None of these

(xvi) The firm and firm-name are:
(a) Synonymous (b) Interchangeable (c) Different terms (d) None of these

(xvii) The partnership is:
(a) Juristic person (b) Juridical person (c) Natural person
(d) None of these

(xviii The maker of a promissory note is liable as:
(a) Principal debtor (b) Principal Creditor
(c) Undercharged surety (d) None of these

(xix) Valid presentation of a cheque is within six months from:
(a) The date it is drawn (b) Date of last correction
(c) Date of delivery (d) None of these

(xx) An exception to “No one can transfer what he does not have” is:
(a) Registered gift (b) Will (c) Estoppels by owner (d) None of these

Corrections are most Welcome...

__________________
"Our Lord, give us the good in this world and the good in the hereafter." (Al-Qur'an, 2:201).

MCQs 2013


1. Jurisdiction in company matters is to be exercised by:
(a) Civil Court (b) Any Judge of High Court
(c) Company Bench of High Court (d) None of these

2. Any alteration in Article of Association affecting the substantive right or liabilities of members of the company can be made:
(a) If Board of Director pass such alteration (b) By vote of simple majority of members (c) By a vote ¾ majority of members (d) None of these

3. A special audit of a company can be ordered by a commission on an application made by members holding not less than:
(a) 20% Voting Rights (b) 25% Voting Rights
(c) 51% Voting Rights (d) None of these

4. A listed company in accordance with companies ordinance is required to have at least:
(a) Two Director (b) Seven Director (c) Three Directors (d) None of These

5. When a negotiable instrument may be construed either as a promissory note or bill of exchange, law recognizes it as:
(a) Promissory note (b) Bill of Exchange (c) Ambiguous Instrument (d) None of these

6. When a bill of exchange has been dishonoured, the holder can cause such dishonour to be certified by a notary public, such certificate is a:
(a) Claiming (b) Presentment (c) Protest (d) None of these(Noting)

7. If a cheque is transferred to any person to constitute him as a holder, the instrument is said to be:
(a) Delivered (b) Negotiated (c) Presented (d) None of these

8. A partner can be expelled from a Firm:
(a) By simple majority of partners (b) If all partner consent to it
(c) Only by exercise of powers conferred by the Contract
(d) None of these

9. A new partner can be inducted in an existing partnership:
(a) By recommendation of any partner (b) By the consent of all partners
(c) By the consent of half of the partners (d) None of these

10. Any admission made by a partner regarding the affairs of the firm in ordinary course of business:
(a) Is evidence against the firm (b) Has no validity against the firm (c) Ordinary statement (d) None of these

11. An agreement between partners imposing reasonable restriction on a partner for not carrying on any business within a specified time or local limits on ceasing to be a partner is:
(a) Void (b) Valid (c) Illegal (d) None of these

12. The goods which form the subject of a Sale can be:
(a) Existing Goods (b) Existing and Future Goods
(c) Existing, Future and Contingent Goods (d) None of these

13. If the seller make use of Pretended bidding to raise the price the sale is:
(a) Voidable (b) Void (c) Illegal (d) None of these

14. The principle of indemnity does not apply in the case of:
(a) Life Insurance (b) Marine Insurance (c) Fire Insurance
(d) None of these

15. Promise which form the consideration or part of the consideration for each other are called:
(a) Agreement (b) Contract (c) Reciprocal Agreement (d) None of these

16. Mr. Aslam applied to a bank for a loan at a time when there is stringency in the money market, the banker declines to make the loan except at an unusually high rate of interest, this is called:
(a) Undue influence (b) Transaction in the ordinary course of business (c) Free consent (d) None of these

17. When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is:
(a) Valid (b) Void (c) Voidable (d) None of these

18. A person who finds goods belonging to another and takes them into his custody; is subject to the same responsibilities as:
(a) Trustee (b) Owner (c) Bailee (d) None of these

19. An agreement in restraint of the marriage of any person other than a minor is called :
(a) Valid (b) Invalid (c) Illogical (d) None of these(Void)

20. Authority of an appointed arbitrator or umpire can be revoked:
(a) At the discretion of either party (b) With the leave of the Court (c) Irrevocable (d) None of these

Corrections are Welcome...

__________________
"Our Lord, give us the good in this world and the good in the hereafter." (Al-Qur'an, 2:201).

[QUOTE=Ahmed Faisal;676680]MCQs 2013

8. A partner can be expelled from a Firm:
(a) By simple majority of partners (b) If all partner consent to it
(c) Only by exercise of powers conferred by the Contract
(d) None of these



Not (a):Because, a partner can't be expelled by "majority" if contract between them don't give them power to expel.
Not (b): Because, a partner can't be expelled by "consent of all" if contract between them don't give them power to expel.
Not (c): Because, a partner can't be expelled by "only the exercise of powers conferred by the Contract" but it also require the "Good faith" in expel by "majority", in favor of business (court will decide good faith).

Hence Ans is option D (none of these)


Indian Partnership Act, 1932

33. Expulsion of a partner
A partner may not be expelled from a firm by any majority of the partners, save in the exercise in good faith of powers conferred by contract between the partners.
The provisions of sub-sections (2), (3) and (4) of section 32 shall apply to an expelled partner as if he were a retired partner.

Ans is (b) that is Valid.

See Section 36 (2) of Partnership Act 1932.

Third Party Motor Vehicle Insurance is mandatory. It refers to the situation when you cause injury to a third party in a motor accident.

Hence the answer should be: Motor Vehicles

Some corrections:

(vi) The minimum number of members required for forming private company is:
(a) 1
(b) 3
(c) 5
(d) None of these

Explanation: Because Companies Ordinance 1984 allows a Single-Member Private Limited Company


(viii) After its incorporation, the ordinary General Meeting of a company must be held within:
(a) One year
(b) the year of incorporation
(c) Eighteen months from the date of incorporation
(d) None of these

Explanation: U/S 158 of Companies Ordinance, 1984: "Every company shall hold, in addition to any other meeting, a general meeting, as its annual general meeting, within eighteen months from the date of its incorporation and thereafter once at least in every calendar year within a period"


(xi) For how much days, a promissory note is entitled to days of grace to be at maturity when it is not
expressed to be either payable on demand or otherwise?
(a) 30 days
(b) 15 days
(c) 3 days
(d) None of these

Explanation: U/S 22 of Negotiable Instruments Act, 1884: "Every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable."

General Public are subscribers of shares in a Public Company. Hence the answer is:
(d) None of these

2007 Paper

The correct answer is
(b) The ignoring by courts of the corporate entity in order to do justice


Explanation:

Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may "pierce" or "lift" the corporate veil.

A simple example would be where a businessman has left his job as a director and has signed a contract to not compete with the company he has just left for a period of time. If he sets up a company which competed with his former company, technically it would be the company and not the person competing. But it is likely a court would say that the new company was just a "sham", a "fraud" or some other phrase, and would still allow the old company to sue the man for breach of contract. A court would look beyond the legal fiction to the reality of the situation.

Source
http://en.wikipedia.org/wiki/Piercin...corporate_veil

Originally posted by Mr Ahmed Bilal

MCQs 2010

(i) A signs promissory instrument in the following terms:
(a) Mr. B I.O.U. Rs.1000
(b) I promise to pay Rs. 500 seven days after my marriage with C
(c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received
(d) I promise to pay Rs. 500 to B and to deliver my black horse on 1st January next
(e) None of these

The answer should be (c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received

According to Negotiable Instrument Act 1881, Chapter II, Section 4

"Illustrations
A signs instruments in the following terms:
(a) "I promise to pay B or order Rs. 500."
(b) "I acknowledge myself to be indebted to B in Rs. 1,000 to be paid on demand, for value received.
(c) "Mr B, I O U Rs. 1,000."
(d) "I promise to pay B Rs. 500 and all other sums which shall be due to him"
(e) "I promise to pay B Rs. 500, first deducting there out any money which he may owe me."
(f) "I promise to pay B Rs. 500 seven days after my marriage with C."
(g) "I promise to pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum."
(h) "I promise to pay B. Rs. 500 and to deliver to him my black horse on 1st January next.

The instruments respectively marked (a) and (b) are promissory notes. The instruments respectively marked (c), (d), (e), (f), (g) and (h) are not promissory notes."

(ii) How many parties are there to a “Promissory note” and a “bill of exchange”?
(a) There are three parties to a “Promissory note” and four to a “bill of exchange”
(b) There are four parties to a “Promissory note” and three to a “bill of exchange
(c) There is one party to a “Promissory note” and two to a “bill of exchange”
(d) There are two parties to a “Promissory note and three to a bill of exchange”
(e) None of these

The answer should be (d) There are two parties to a “Promissory note and three to a bill of exchange”

(v) A Voidable contract is:
(a) An illegal agreement (b) Partly valid agreement
(c) Void ab initio (d) None of these

The answer should be (b) Partly valid agreement

Originally posted by Mr Ahmed Bilal

MCQs 2011

(vii) Extra-ordinary general meeting of a company includes:
(a) Annual general meeting (b) Statutory meeting
(c) Plenary meeting (d) None of these

The answer should be (c) Plenary meeting (doubt)

Plenary definition as adjective according to google is

2. (of a meeting) to be attended by all participants at a conference or assembly, who otherwise meet in smaller groups.

According to Companies Ordinance 1984 Section 154

159. Calling of extraordinary general meeting. - (1) All general meetings of a company, other than the annual general meeting referred to in section 158 and the statutory meeting mentioned in section 157, shall be called extraordinary general meetings.


(viii) Petition for winding up of a company may be moved by:
(a) Auditor General (b) Advocate General
(c) Company Judge (d) None of these

the answer should be (a) Auditor General

I dont think there is such a position called Company Judge


(ix) The Companies Act repealed by the Companies Ordinance, 1984 pertained to the year:
(a) 1930 (b) 1933 (c) 1935 (d) None of these

the answer could be (a) 1930 or (d) None of these

According to CO 1984 page 398 (or 418 out 420 in PDF version)under title ENACTMENTS REPEALED