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225
Roll No..........................
Time allowed : 3 hours Maximum marks : 100
Total number of questions : 8Total number of printed pages
: 6
NOTE : 1. Answer SIX questions including Question No.1
which is compulsory.
2. All references to sections relate to the
Companies Act, 1956 unless stated otherwise.
1. Comment on any four of the following :
(i) “A promoter is not a trustee or agent for the
company, but he stands in a fiduciary position
towards it.”
(ii) “Members of a limited company may nevertheless
have unlimited liability.”
(iii) “A company does not have unlimited powers to
alter its articles of association.”
(iv) “The directors have uncontrolled and unfettered
powers to refuse registration of transfer of shares.”
(v) “Every company must have a whole-time
Secretary.”
(vi) “A company can accept deposits without issuing
advertisement.”
(5 marks each)
2. (a) State with reasons and relevant legal provisions/
case law, if any, whether the following statements
are correct or incorrect. Attempt any five :
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(i) A public limited company can commence
business immediately on incorporation.
(ii) Hire-purchase and leasing transactions lead
to ‘borrowing’.
(iii) Share certificate is an official publication.
(iv) The place from which a representative of a
foreign company in India conducts meetings
of shareholders or even directors, and
procures orders from customers is a ‘place
of business’ of the foreign company.
(v) Modification of charge in the event of change
in law requires registration.
(vi) Raja, a director of Empire Ltd., resigned his
directorship. He is liable to file Form No.32
with the Registrar of Companies.
(2 marks each)
(b) Write short notes on any two of the following :
(i) Shelf prospectus
(ii) Modes of acquiring membership
(iii) Director’s identity number (DIN).
(3 marks each)
3. (a) What are the consequences of non-registration
of a charge ?
(b) Whether a member of a company can be expelled
? Discuss with reference to a case law.
(c) A listed company is having an executive chairman.
Explain the provisions regarding composition of
the Board of directors in terms of the listing
agreement.
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225
(d) Define ‘small depositors’ and state how their
interest is safeguarded.
(4 marks each)
4. (a) What is ‘forfeiture of shares’ ? State the procedure
for forfeiture of shares.
(10 marks)
(b) Re-write the following sentences after filling-up
the blank space with appropriate word(s) so as
to convey the correct meaning :
(i) An incorporated company has
______________ succession.
(ii) The statutory report shall be forwarded to
every member of the company at least
_________ days before the day on which
the meeting is to be held.
(iii) The maximum amount of fine under section
193 for not recording the minutes of the
Board of directors and general meetings is
Rs._____________.
(iv) An explanatory statement must be annexed
to the notice for the general meeting
according to section 173 for consideration
of _____________ business at a general
meeting.
(v) A dividend once declared cannot be revoked
except with the consent of the ___________.
(vi) In terms of Clause 47 of the listing agreement,
Compliance Officer shall be _____________
of the company.
(1 mark each)
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5. Distinguish between any four of the following :
(i) ‘Reserve capital’ and ‘capital reserve’.
(ii) ‘Interim dividend’ and ‘final dividend’.
(iii) ‘Motion’ and ‘resolution’.
(iv) ‘Revocable trust’ and ‘irrevocable trust’.
(v) ‘Debenture’ and ‘loan’.
(4 marks each)
6. (a) State the provisions of the Companies Act, 1956
regarding issue of shares at a premium. For
what purpose the share premium may be applied
?
(5 marks)
(b) Gomez, the chairman of a company, borrowed
Rs.5 lakh from the State Bank of India, Patna
under a promissory note. A suit was filed for
the recovery of debts on the basis of the pronote
executed by the chairman. The company refused
to accept the liability on the plea that the chairman
had borrowed funds without authorisation from
the company. Will the company succeed ?
Explain.
(5 marks)
(c) Garima Ltd., a public company in which 32% of
the subscribed capital is held by the Central
Government, wishes to reappoint Lal Pal & Co.
as its auditors in the annual general meeting
proposed to be held on 30th June, 2007. Advise
Garima Ltd. about the procedure to be followed
in this regard.
(6 marks)
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7. (a) The name of Piyush is found entered in the
register of members of a company. But, Piyush
contends that he is not a member of the company.
The company maintains that Piyush had orally
agreed to become a member of the company,
and hence, his name was entered in the register
and so he is a member. Is the contention of
Piyush valid ?
(5 marks)
(b) An annual general meeting of Hum Log Ltd.
called on 30th December, 2004 was adjourned
to 31st March, 2005, and was held on that date.
The next meeting was held in February, 2006.
Can the company be held liable for not holding
any meeting in 2005 ?
(5 marks)
(c) A proxy was appointed by a member on an
instrument duly executed. Will the vote cast by
the proxy be valid in the following cases :
(i) When the member himself attended and cast
his vote at the meeting without revoking
the authority of the proxy; and
(ii) When the member died in the meantime ?
(3 marks each)
8. (a) Explain the provisions relating to ‘no compensation
to sole-selling agent for loss of office’ under
section 294A.
(5 marks)
(b) A company was in dire need of further capital.
The majority representing 98% of the shares
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were willing to provide the capital if they could
buy-up the 2% minority shares. The majority
passed a resolution altering the articles and
enabling them to purchase the minority shares.
The minority shareholders refused to surrender
their shares and challenged the validity of the
majority resolution. Decide.
(5 marks)
(c) 40 out of 100 members of a company submitted
a requisition for holding of an extraordinary
general meeting in order to remove the managing
director from the office. On the failure of the
company to call the meeting, the requisitionists
themselves called the meeting at the registered
office of the company. On the appointed date,
they could not hold the meeting at the registered
office, as it was kept under lock and key by the
managing director himself. The members held
the meeting elsewhere and adopted a resolution
removing the managing director from office. Is
the resolution valid ? Give reason.
(6 marks)
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