ch:6 joint stock 3 + Ch:7 Co-operative society

Question 1

What is meant by a director of company.

Answer 1

The shareholders who are the owners of the company do not participate in the affairs of management directly, but they elect their representatives to run the business. These elected representatives are called “Directors of the company” and elected directors are collectively known as “Board of Directors”.

Question 2

How many directors are in a company.

Answer 2

Ans. According to section 154 of Companies Act 2017, a multi-members private company shall not have less than two directors and a listed public company shall not have less than seven directors

Question 3

Who can select the directors of company.

Answer 3

(i)Promoters
(iii) Board of Directors
(ii) Shareholders
(iv) Creditors of Company
v) subscribers

Question 4

Which people cannot become the directors of company.

Answer 4

(i) a minor
(ii) a person who refuses to buy qualifying shares fixed in articles of association
(iii) person of unsound mind;
(iv) a person convicted by a court of law for an offence involving moral turpitude;
(v) a person who does not give a written declaration of becoming a director.
(vi) a person who is not a member of the company

Question 5

What are the duties of company’s director.

Answer 5

(i) Directors make the arrangements to conduct the company’s meetings.
(ii) They should prevent the misuse of capital.
(iii) They keep checking to stop the wrong payments.
(iv) The directors should frame and implement the policies of business.
(v) They submit the various reports to registrar

Question 6

What is meant by company’s meeting and gives its types.

Answer 6

When the members of the company, gather at certain time and place to discuss the business and managing affairs it is called meeting of the company.
(TYPES)
(i)Directors meeting.
(ii) Shareholders meeting.
-Annual general meeting
-Extra ordinary meeting
-Statutory meeting

Question 7

What is meant by the statutory meeting and explain its main objectives.

Answer 7

A Statutory meeting is the first meeting of the company’s shareholders. The object of
the statutory meeting is to inform the shareholders about the affairs of the
company. At least 21 days before, a notice is issued by the secretary of company to all shareholders.

OBJECTS

(i) The detail about the formation of company.
(ii) To provide exact information regarding the affairs of company.
(iii) To win the confidence of shareholders of the company.

Question 8

Write down the contents of statutory report of a company.

Answer 8

Statutory report provides the following information:
(i)Total number of allotted shares.
(ii) Total amount of cash received in respect of the allotted shares
(iii) Detail of company’s receipts and payments.
(iv) The names & addresses of the directors, chief executive, secretary, auditors etc.
(v) Particulars of any business contract etc.

Question 9

Define of statutory report of a company.

Answer 9

A report, which provides complete detail / information of company’s affairs to the shareholders, called “statutory report”. It is sent to the shareholders along with the
notice of statutory meeting.

Question 10

What is meant by extra ordinary meeting and its objectives.

Answer 10

According to section 133 of Companies Act 2017, all general meetings other than the statutory meeting and annual general meeting are called extra-ordinary general meetings. These meetings are to be called in following circumstances.

-To solve important issues.
-To issue debenture.
-To alter company’s capital.

Question 11

What is resolution and give its kinds.

Answer 11

The formal expression of opinion or desire of any meeting or assembly obtained by the majority votes of members is called “Resolution”. There are two parts of resolution, first part explains the causes of resolution whereas second part explains the decided matters of the meeting.

KINDS OF RESOLUTION

There are following three kinds of resolution.
(i) Ordinary resolution
(ii) special resolution
(iii) Extraordinary resolution

Question 12

ordinary resolution

Answer 12

A resolution which is passed by the simple majority of members in any kind of general meeting of the company. For this resolution a 21 days notice must be sent to each member.

Question 13

What is meant by special resolution.

Answer 13

The resolution which is passed by 3/4 three fourth majority of the shareholders is called special resolution. A 21 days notice along with a copy of resolution must be sent to each member.

Question 14

What methods can be used to wind up a company.

Answer 14

(i) By court
(ii) Under the supervision of court
(iii)Voluntary winding up

Question 15

Explain the steps involved in the winding up of company by the consent of creditors.

Answer 15

Ans. The method of creditor’s voluntary winding up for joint stock company is givenbelow.
(a) Statutory declaration
(c) Creditor’s meeting
(b)General meeting
(d)Statement of company’s affairs
(e) Intimation to registrar.
(f)Appointment of liquidator
(g) Inspection committee
(h) Duties of the liquidators
(i) Final meeting

Question 16

Define cooperative society.

Answer 16

Cooperative society is formed for the promotion of thrift, self help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate sources.

Question 17

What are the objectives of co-operative society.

Answer 17

(i) Sale of goods at reasonable price
(ii) Elimination of middlemen
(iii) Welfare of low income people
(iv) Increase in saving and capital
(v) Mutual cooperation
(vi) Issuance of loan at low rate of interest

Question 18

State the important features of cooperative society.

Answer 18

i) Voluntary membership
(ii) Voluntary registration
(iii) Elected management
(iv) One vote right
(v) Specific objectives:
(vi) Cash transactions

Question 19

Write down the merits of co-operative society.

Answer 19

(i)Elimination of middlemen
(ii) Promotion in savings.
(iii) Better standard of living
(iv) Equal distribution of wealth
(v) Less prices for members
(vi) More employment

Question 20

Write down the demerits co-operative society.

Answer 20

(i)Less finance
(ii) Inefficient management
(iii) Absence of discipline.
(iv) Unlimited liability
(v) Lack of legal governance
(vi) Lack of secrecy

Question 21

List down any five kinds of co-operative society.

Answer 21

(i) Producer’s cooperative society
(ii) Consumer’s cooperative society
(iii) Marketing cooperative society
(iv) Insurance cooperative society
(v) Housing cooperative society

Question 22

How does the membership of a co-operative society attained.

Answer 22

The membership of society is open for all ‘adult persons. For this purpose, the purchase of one share is sufficient.

Question 23

What are the sources of capital of a cooperative society.

Answer 23

The capital of the society is contributed by the members through purchase of shares and paying membership fee. In a cooperative society one member can buy shares only upto one-fifth of share capital.

Question 24

How does the co-operative society run/handle its business affairs/matters.

Answer 24

The members elect the managing committee to carry on day to day affairs of the society. The managing committee carries out the policies as laid down in the general meeting of the society, but every important matter is always decided by the majority of members.

Question 25

What is the basic/main objective of forming co-operative society.

Answer 25

The main objective of the formation of cooperative society is the welfare of
members and is to work on the principle “All for each and each for all”.

Question 26

How is the profit of a co-operative society distributed.

Answer 26

The objective of cooperative organization is the provision of service to its members. Whatever a little profit it earns is also spent for the welfare of its members after distributing not more than 10% among members and keeping at least 1/10th of the profit (1/4th in case of producer’s society) as reserve.

Question 27

What is the number of members in a cooperative society.

Answer 27

In Pakistan, the minimum number of members required for the establishment of a cooperative society is 30 (for producers or housing society) and 50 for other societies.
However, there is no restriction of maximum number of members.

Question 28

State the liability of members in a cooperative society.

Answer 28

The liability of the members in a cooperative society is generally limited but in case of agricultural cooperative credit societies, the liability of the members is unlimited

Note: When a question arises that the liability of a society is limited or unlimited. the registrar’s decision at the time of registration shall be final in this regard.

Question 29

How does co-operative society play its role in the economic development of a
country.

Answer 29

A cooperative society is one type of business unit. It also contributes towards economic development by increasing output and providing employment etc. In the presence of cooperative societies, the balanced growth of the country is possible.

Question 30

Define credit co-operative society.

Answer 30

This society is formed to provide the facility of loans on favourable terms to themembers in rural areas. The sources of funds of the society are as under:
(a) Deposits of members.
(b) Membership fee.
(c) Govt. loans.

[OBJECTS]

(i) To protect from the private moneylenders.
(ii) To charge low interest.
(iii) To encourage the habit of mutual aid or help.

Question 31

What is meant by producers co-operative society.

Answer 31

This society is formed by small workers, industrialists and crafts men. The membership is limited to the producers of specific goods. All the necessary activities like production, management and marketing are performed by membersthemselves.