Skip to content

CA Foundation · Business Laws · The Companies Act, 2013

Hindustan Craft Society wants to promote art and charity, intends to apply its profits only to these objects and to pay no dividend to members. It wishes to be registered as a company without adding the word Limited to its name. Under which provision can it get this licence?

Hindustan Craft Society should register as a section 8 company with a licence from the Central Government. Such a company promotes objects like art and charity, applies profits to them, pays no dividend, and may omit Limited from its name.

  1. ASection 8 company, by obtaining a licence from the Central GovernmentCorrect
  2. BProducer company, by obtaining approval from SEBI
  3. CNidhi company, by approval of the Registrar of Companies
  4. DGovernment company, by a resolution of the board

Explanation

A section 8 company is formed for promoting commerce, art, science, charity and similar objects, applies profits to those objects, and pays no dividend. It is registered under a licence issued by the Central Government, which permits it to omit Limited or Private Limited from its name. The other options are unrelated kinds of company or authorities.

Did you get it right without looking?

One question tells you little. A timed set on The Companies Act, 2013 shows your real accuracy, how long you take and where you lose marks.

Practise The Companies Act, 2013Free diagnostic mock

More The Companies Act, 2013 questions