All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

Practice Mode:
97.

ABC Limited is a company that was incorporated on January 1, 2011. Which of the following statements is the most accurate application of the Principal set out below ?


Principal :

A private company can commence business from the date its incorporation.

A: ABC Limited can Commence, business from the date of its incorporation.
B: ABC Limited can commence business from the date of its incorporation only in certain circumstances.
C: ABC Limited can commence business before the date of its incorporation.
D: ABC Limited can business before the commence date of its incorporation only in certain circumstances.
E: The principal does not apply to the fact situation.

The answer is: A

<< Previous Question
Next Question >>

Explanation

The correct option is:

A: ABC Limited can commence business from the date of its incorporation.

Explanation:

In most jurisdictions, including many common corporate laws, a private company can indeed commence its business activities from the date of its incorporation. This means that as soon as ABC Limited was incorporated on January 1, 2011, it can start conducting its business operations without any specific restrictions or conditions mentioned in the principal.

Option B suggests that ABC Limited can commence business from the date of its incorporation only in certain circumstances, which is not typically the case for private companies. Similarly, options C and D mention commencing business before the incorporation date, which is not a common practice and is generally not allowed. Option E is incorrect as well because the principal does apply to the fact situation, and private companies can usually start their business activities from the date of incorporation.