ICCSSL Business Law Practice Questions - ICCSSL Business Law Module (Subject 2306) Exam - ICCSSL Business Law Practice Questions - ICCSSL Business Law Module (Subject 2306) Exam

Question 1

Under Section 3 of the Sri Lankan Companies Act No. 7 of 2007, which of the following is NOT a recognized category of company that may be incorporated?

A company limited by shares A company limited by guarantee An unlimited company A partnership company with limited liability

Correct Answer:

A partnership company with limited liability

Question 2

Which of the following describes a major reform introduced by the Sri Lankan Companies Act No. 7 of 2007 regarding share capital?

It mandated a minimum par value of Rs. 10 for all shares. It completely abolished the concept of par value or nominal value for shares. It prohibited companies from issuing ordinary shares without voting rights. It required all companies to maintain a capital redemption reserve.

Correct Answer:

It completely abolished the concept of par value or nominal value for shares.

Question 3

Under the Sri Lankan Companies Act No. 7 of 2007, what two tests must be satisfied for a company to meet the 'solvency test'?

The current ratio test and the quick ratio test The asset coverage test and the debt service coverage test The liquidity (cash flow) test and the balance sheet (net assets) test The working capital test and the capital adequacy test

Correct Answer:

The liquidity (cash flow) test and the balance sheet (net assets) test

Question 4

What is the statutory requirement for the board of directors immediately after a company makes a distribution (such as a dividend) under Section 56 of the Companies Act No. 7 of 2007?

They must obtain approval from the Registrar of Companies within 7 days. The directors who voted in favor must sign a certificate stating that in their opinion, the company will satisfy the solvency test immediately after the distribution. They must publish the distribution in at least three national daily newspapers. They must file a declaration of solvency with the Commercial High Court of Colombo.

Correct Answer:

The directors who voted in favor must sign a certificate stating that in their opinion, the company will satisfy the solvency test immediately after the distribution.

Question 5

If a company makes a distribution to shareholders when it does not satisfy the solvency test, who may be held personally liable to restore the distribution under the Sri Lankan Companies Act No. 7 of 2007?

Only the majority shareholders who received the distribution The company secretary and the external auditors The directors who authorized the distribution and signed the solvency certificate The Registrar of Companies

Correct Answer:

The directors who authorized the distribution and signed the solvency certificate

Question 1

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Prepare with the ICCSSL Business Law Practice Questions - ICCSSL Business Law Module (Subject 2306) Exam practice quiz. This question bank includes 100 questions covering lankan, companies, contract, company, and section. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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ICCSSL Business Law Practice Questions - ICCSSL Business Law Module (Subject 2306) Exam

This practice set contains 100 questions from the matching question bank and focuses on lankan, companies, contract, company, and section. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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ICCSSL Business Law Practice Questions - ICCSSL Business Law Module (Subject 2306) Exam

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