Legal Aspects of Business MCQ Quiz - Objective Question with Answer for Legal Aspects of Business - Download Free PDF

The correct answer is 10.

Key PointsAccording to Section 1 (zb) of Trademark Act, 1999; “The term “trademark” refers to a visual mark that can be used to distinguish one person’s goods or services from those of another and can include the shape of the goods, their packing, and colour schemes.

Important PointsHow are Trademarks denoted As Per Trademark law in India?

• ™: The symbol ™ denotes an unregistered trademark. It gets used to market or brand products.
• ℠: It is used for a service mark that isn’t registered. It gets accustomed to market or brand services.
• ®: Letter R gets enclosed by a circle and is used for trademark registration.

Procedure and Term for registration of Trademark in India under Trademark Act, 1999

• Ten years are allotted for trademark registration. A trademark renewal is valid for ten years following the expiration of the most recent renewal or the initial registration.
• The notice must be delivered in an essential manner to the registered proprietor before the prior registration expires, according to the registrar.
• The notice details the expiration date of the registration, the fees that must be paid, and the requirements that must be met in order to obtain a renewal.
• If certain requirements are not met within the allotted time, the registrar may remove the trademark from the register.

Hence, it can be concluded that a trademark can be renewed after 10 years.

The correct answer is - Copyright

Key Points

• Copyright
  • Protects original artistic works such as musical compositions, films, poems, and other forms of creative expression.
  • Grants the creator exclusive rights to reproduce, distribute, perform, and display their work.
  • Ensures that the creator is recognized and compensated for their intellectual property.
  • Typically lasts for the creator's lifetime plus a specified number of years (e.g., 60 or 70 years after death, depending on jurisdiction).

Additional Information

• Other Types of Intellectual Property Rights
  • Patent
    • Protects inventions or processes that offer new and useful solutions.
    • Grants the inventor exclusive rights to use and commercialize the invention for a specific period (e.g., 20 years).
  • Trademark
    • Protects brand identifiers such as names, logos, slogans, and symbols.
    • Helps distinguish the goods or services of one entity from another in the marketplace.
  • Intangible Rights
    • A broader category encompassing various non-physical property rights, including goodwill, trade secrets, and other proprietary knowledge.
• Examples of Copyrighted Works
  • Novels, short stories, and essays.
  • Musical scores and recordings.
  • Films, documentaries, and animations.
  • Paintings, sculptures, and photographs.
• Importance of Copyright
  • Encourages innovation and creativity by providing incentives for creators.
  • Prevents unauthorized use or duplication of creative works.
  • Supports the economic rights of creators and the cultural development of society.

The correct answer is - Section 2 (j)

Key Points

• Section 2 (j) of the Right to Information (RTI) Act, 2005
  • Defines the term "right to information".
  • It includes the right to:
    • Inspect works, documents, and records of public authorities.
    • Take notes, extracts, or certified copies of documents or records.
    • Obtain information in the form of printouts, diskettes, tapes, or other electronic means.
  • This section ensures citizens have access to information, fostering transparency and accountability.
  • It emphasizes that the right to information is not just about asking questions but also about accessing documents and records.

Additional Information

• Other Important Sections of the RTI Act, 2005
  • Section 3
    • States that all citizens shall have the right to information, subject to the provisions of the RTI Act.
  • Section 2 (h)
    • Defines "public authority" as any authority or body established by the Constitution, law, or government notification.
    • Includes bodies owned, controlled, or substantially financed by the government.
  • Section 2 (n)
    • Defines the term "third party" as a person or entity other than the citizen requesting information and the public authority.
• Purpose of the RTI Act
  • Promotes transparency and accountability in public authorities.
  • Empowers citizens to hold the government accountable.
  • Enables informed participation in democratic processes.

The correct answer is - Section 66

Key Points

• Section 66 of the Information Technology Act, 2000 (amended in 2008) deals specifically with hacking and its penalties.
  • Hacking refers to the act of dishonestly or fraudulently accessing or modifying a computer system or network.
  • Penalties under Section 66 include:
    • Imprisonment for up to 3 years.
    • A fine of up to ₹5 lakh.
  • This section covers actions that involve intent to cause harm or damage to data and information.
• Hacking is categorized under cybercrimes and is considered a severe offense under Indian law.

Additional Information

• Information Technology Act, 2000
  • This act was enacted to provide a legal framework for electronic governance and address various cybercrimes.
  • It was amended in 2008 to strengthen provisions related to data protection, cybercrimes, and penalties.
• Other Relevant Sections
  • Section 65: Deals with tampering of computer source documents.
  • Section 67: Addresses publishing or transmitting obscene material in electronic form.
  • Section 62: Not directly related to hacking; it pertains to other aspects of IT governance.
• Importance of Cybersecurity
  • Sections like 66 highlight the need for individuals and organizations to adopt robust cybersecurity practices.
  • Awareness and implementation of IT laws help mitigate risks associated with hacking and data breaches.

The correct answer is - Partnership firm and Private Co.

Key Points

• The Limited Liability Partnership (LLP) Act, 2008 incorporates the advantages of both:
  • Partnership firms - Flexibility in management and operations.
  • Private Companies - Limited liability for partners, ensuring protection of personal assets.
• The LLP structure allows partners to operate with the flexibility of a partnership while enjoying the benefit of limited liability, which is a feature of companies.
• Unlike traditional partnerships, the liability of partners in an LLP is limited to their agreed contribution, reducing the risk to personal assets.
• LLPs ensure a clear distinction between management and ownership, similar to private companies, enabling efficient operations.

Additional Information

• Key features of Limited Liability Partnership (LLP):
  • Separate Legal Entity - An LLP is treated as a separate legal entity, distinct from its partners.
  • Perpetual Succession - The LLP continues to exist irrespective of changes in its partners.
  • Flexibility - LLPs offer operational flexibility without the strict compliance requirements of private or public limited companies.
  • No Minimum Capital Requirement - There is no mandatory minimum capital for forming an LLP.
• Difference between Partnership and LLP:
  • In a traditional partnership, partners have unlimited liability, whereas LLP partners have limited liability.
  • LLPs are governed by the LLP Act, 2008, while partnerships are governed by the Indian Partnership Act, 1932.
• Examples of LLP Usage: LLPs are commonly used for professional services such as legal firms, accounting firms, and consulting services due to their flexibility and liability protection.

The correct answer is Service Tax.

Goods and Service Tax (GST) has abolished the following taxes:  

1. Central Excise duty
2. Duties of Excise
3. Additional Duties of Excise 
4. Additional Duties of Customs 
5. Special Additional Duty of Customs 
6. Service Tax
7. Central Surcharges

Key Points

• GST is a value-added tax levied on most goods and services sold for domestic consumption.
• In India, GST Bill was first introduced in 2014 as The Constitution (122nd Amendment) Bill.
• This got approval in 2016 and was renumbered in the statute by Rajya Sabha as The Constitution (101st Amendment) Act, 2016.

Additional Information

• Wealth Tax, according to the Wealth Tax Act, 1957, is a form of direct tax levied on an individual's personal properties.
• Income tax is a direct tax that is paid to the government on the income of persons or corporations that are expected to pay taxes.
• Corporation tax is a direct tax levied on the net profits or profit made by corporations from their businesses.

The correct answer is Goods and Services Tax.

Key Points

• The Goods and Services Tax (GST) is a tax on goods and services.
• It is an indirect tax that was implemented to replace a variety of other indirect taxes such as VAT, service tax, purchase tax, excise duty, and so on.
• GST is a tax applied in India on the supply of certain goods and services.
• GST is a multi-stage, all-encompassing tax system that applies to the sale of goods and services.
• The fundamental goal of this taxing scheme, which is applicable throughout India, is to reduce the cascading effect of other indirect taxes.​

Important Points

• The tax on the consumption of goods and services is known as indirect tax. It isn't based on a person's earnings. Instead, he or she must pay the tax in addition to the cost of the products or services purchased from the seller.
• Corporation tax is a direct tax levied on corporations' net revenue or profit.
• An income tax is a type of tax that is levied on individuals or businesses based on their earnings or profits.
• If most investments are kept for at least one year, capital gains taxes must be paid on the earnings from their sale. 

The correct answer is Indirect Tax.

Key Points

• Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services. 
• It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes.
• Multi-staged as it is imposed at every step in the production process but is meant to be refunded to all parties in the various stages of production other than the final consumer and as a destination-based tax.
• It is collected from point of consumption.

Important Points

• About GST:
  • The tax came into effect on 1 July 2017.
  • It is One Hundred and the first Amendment of the Constitution of India.

The correct answer is 1 July 2017.

Key Points

• GST stands for Goods and Services Tax.
• ​GST was passed as the 101st amendment act.
• It came into force on 1st July 2017.
• GST is a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India.
• It will replace existing multiple taxes levied by the central and state governments.
• The concept of GST was first introduced in the Parliament by P. Chidambaram in 2005.
• France is the first country to introduce GST.
• The different tax slabs under the GST are 0%, 5%, 12%, 18%, and 28%.
• "One nation, one tax, and one market" is the motto of the GST.

The correct answer is Assam.

• The GST Bill (Goods and Services Tax Bill), officially known as the Constitution (101nd Amendment) Bill, 2016 is a comprehensive indirect tax on manufacture, sale and consumption of goods and services in India.
• The single pan-India tax will replace the excise duty, countervailing duty and service tax, as also state taxes such as value-added tax, entry tax and luxury tax.
• Assam is the first state of India to pass GST Bill.

Important Points

• 42% of the Central Government GST portion will be given back to the State.
• The GST will cater for a special concession offer in case the NE & Himalayan states request a reduction in tax for a valid reason.
• In case of requirement of additional revenue in emergency situations of natural calamity like floods and earthquakes, GST will allow the State Government to collect special taxes as long as it is approved by GSTC. 

The correct answer is the Gift tax.

Key Points

• The gift tax was first introduced in 1958.
• The gift tax was levied on all donations except the one given by the charitable institution’s government companies and private companies. 
• Gifts up to Rs 50,000 per annum were exempt from tax in India.
• In addition, gifts from specific relatives like parents, spouses, and siblings are also exempt from tax. 
• Gifts in other cases are taxable. 
• Tax on gifts in India falls under the purview of the Income Tax Act as there is no specific gift tax after the Gift Tax Act, 1958 was repealed in 1998.

Additional Information Sin Tax- A sin tax is a tax levied on goods or services that are considered to be harmful or costly to society. The goods and services commonly include tobacco, alcohol, sugar-added drinks, and gambling. The main purposes of imposing sin taxes are to reduce the consumption of harmful goods and to increase government revenue.

The correct answer is ​1st July 2017.

• The Goods and Services Tax (GST) was implemented on 1 July 2017.
  • To implement GST, the Constitutional (122nd Amendment) Bill (abbreviated CAB) was introduced in the Parliament and passed by Rajya Sabha on 03 August 2016 and Lok Sabha on 08 August 2016.

Key Points

• Goods and Services Tax (GST) is a uniform indirect tax levied on goods and services across India.
• It has replaced central taxes like central excise, service tax, additional duties of excise & customs, special additional duties of customs, besides cesses and surcharges, on supply of goods and services. 
• The objectives of GST-
  • To achieve the ideology of ‘One Nation, One Tax’.
  • To subsume a majority of the indirect taxes in India.
  • To eliminate the cascading effect of taxes.
  • To curb tax evasion.
  • To increase the taxpayer base.
  • Online procedures for ease of doing business.
  • To promote competitive pricing and increase consumption.

Important Points

• There are three taxes applicable under this system:
  • CGST: It is the tax collected by the Central Government on an intra-state sale.
  • SGST: It is the tax collected by the State government on an intra-state sale. 
  • IGST: It is the tax collected by the Central Government for an inter-state sale. 

The correct answer is Gold Jewellery.

Key Points

• GST is known as the Goods and Services Tax.
• It is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
• The Goods and Service Tax Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. 
• Products that are exempted from GST are:
  • Alcohol
  • Petroleum products 
  • Vegetables
  • Honey, etc

Additional Information

• GST was introduced by the 101^st Constitutional Amendment Act.
• GST was the 122^th Constitutional Bill.
• GST was introduced by then Finance Minister Arun Jaitley.
• The present Finance Minister of India is Nirmala Sitharaman.

The correct answer is On July 1, 2017.

Key Points

• Goods and Service Tax (GST) was implemented in India on 1st July 2017 by the then Finance Minister Arun Jaitely. 
• Goods and Service Tax(GST):
  • ​GST is an indirect tax used in India on the supply of goods and services.
  • It is a destination-based tax.
  • Goods and services are divided into five different tax slabs for collection of tax- 0%, 5%, 12%, 18%, and 28%.
  • GST Council is the governing body of GST having 33 numbers.
  • The council is headed by the union finance minister assisted by the finance minister of all the states of India.

Additional Information

• The 101st Constitutional (One Hundred and First Amendment) Act, 2016  introduced a national Goods and Services Tax (GST) in India on 1 July 2017.
• The Goods and Services Tax (GST) is a Value Added Tax (VAT) intended to establish a systematic indirect tax levy on the production, sale, and use of products and services at the national level.
• CGST, IGST, UTGS, and SGST Compensation Act passed at Lok Sabha on 29 March 2017.
• The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 was introduced on 19 December 2014 by Finance Minister Arun Jaitley in the Lok Sabha and passed on 6 May 2015 by the House.

The correct answer is The Kelkar Task Force. 

Key Points

• The idea of a nationwide GST in India was first proposed by the Kelkar Task Force on Indirect Taxes in 2000.
• The objective was to replace the prevailing complex and fragmented tax structure with a unified system that would simplify compliance, reduce tax cascading, and promote economic integration.
• The Empowered Committee of State Finance Ministers prepared a design and roadmap, releasing the first discussion paper in 2009.
• The Constitution Amendment Bill was introduced in 2011 but faced challenges regarding compensation to states and other issues.
• After years of deliberation and negotiations between the Central and State Governments, the Constitution (122nd Amendment) Bill, 2014, was introduced in Parliament.
• The bill aimed to amend the Constitution to enable the implementation of GST.