MEPL CLASSES

CA/CMA INTERMEDIATE
LAW (THE COMPANIES ACT, 2013)
Website- www.meplclasses.com
Mail Id: - d2hclasses@mohitsir.com
Main Centre- 59, Jatindra Mohan Avenue Shobhabazar Kolkata-700005.

(TIME ALLOWED: 90 MINUTES) (TOTAL MARKS: 50 MARKS)

Question 1.
Alfa school started imparting education on 1st April, 2010, with the sole objective
of providing education to children of weaker society either free of cost or at a very
nominal fee depending upon the financial condition of their parents. However, on
30th March 2020, it came to the knowledge of the Central Government that the
said school was operating by violating the objects of its objective clause due to
which it was granted the status of a section 8 company under the Companies Act,
2013. Describe what powers can be exercised by the Central Government against
the Alfa School, in such a case?
Question 2.
Ashok, a director of Gama Electricals Ltd. gave in writing to the company that the
notice for any general meeting and of the Board of Directors' meeting be sent to
him only by registered post at his residential address at Kanpur for which he
deposited sufficient money. The company sent notice to him by ordinary mail
under certificate of posting. Ashok did not receive this notice and could not attend
the meeting and contended that the notice was improper.
Question 3.
ABC Limited having a net worth of ₹ 120 crore wants to accept deposit from its
members. The directors of the company have approached you to advise them as
to what special care has to be taken while accepting such deposit from the
members in case their company falls within the category of an ‘eligible company’.
Question 4.
Shubhra Chemicals Private Limited (not a start-up company) is desirous of
accepting ‘deposits’ from its members amounting to two hundred percent of
aggregate of its paid-up share capital, free reserves and securities premium
account. What are the conditions it must fulfil before such acceptance?
Question 5.
A General Meeting was scheduled to be held on Friday, 15th April, 2022 at 3.00
P.M. As per the notice the members who are unable to attend a meeting in person
can appoint a proxy and the proxy forms duly filled should be sent to the company
so as to reach at least 48 hours before the meeting. Mr. X, a member of the
company appoints Mr. Y as his proxy and the proxy form dated 09-04-2022 was
deposited by Mr. Y with the company at its registered Office on 11-04-2022.
Similarly, another member Mr. W also gives two separate proxies to two
individuals named Mr. M and Mr. N. In the case of Mr. M, the proxy dated 12-04-
2022 was deposited with the company on the same day and the proxy form in
favour of Mr. N was deposited on 14-04-2022. All the proxies viz., Y, M and N
were present before the meeting. According to the provisions of the Companies
Act, 2013, who would be the persons allowed to represent as proxies for
members X and W respectively?
Question 6.
Surya, a shareholder, gives a notice for inspecting proxies, five days before the
meeting is scheduled and approaches the company two days before the scheduled
meeting for inspecting the same. What is the legal position in respect of demand
for inspection of proxies by Surya as per the provisions of the Companies Act,
2013
Question 7.
One-fourth of the subscribed capital of AMC Limited was held by the Government
of Rajasthan. Mr. Neeraj, a Chartered Accountant, was appointed as an auditor of
the Company at the Annual General Meeting held on 30 April, 2018 by an ordinary
resolution. Mr. Sanjay, a shareholder of the Company, objects to the manner of
appointment of Mr. Neeraj on the ground of violation of the Companies Act, 2013.
Decide whether the objection of Mr. Sanjay is tenable? Also examine the
consequences of the above appointment under the said Act
Question 8.
Explain how the auditor will be appointed in the following cases: (i) A Government
company within the meaning of section 394 of the Companies Act, 2013. (ii) A
public company whose shareholders include XYZ Bank (a nationalized bank)
holding 18% of the subscribed capital of the company.
Question 9.
YZ Medical Instruments Limited is a manufacturing company & has proposed a
dividend @ 10% for the year 2022-2023 out of the profits of current year. The
company has earned a profit of ₹ 910 crores during 2022-2023. The company does
not intend to transfer any amount to the general reserves out of the profits. Is YZ
Medical Instruments Limited allowed to do so? Comment.
Question 10.
MNP Private Ltd. is a company registered under the Companies Act, 2013 with a
paid-up share capital of ₹ 2 crore and turnover of ₹ 60 crore. Explain the meaning
of the “Small Company” and examine the following in accordance with the
provisions of the Companies Act, 2013: (i) Whether the MNP Private Ltd. can avail
the status of small company? (ii) What will be your answer if the turnover of the
company is ₹ 30 crore?
 MEPL CLASSES
CMA INTERMEDIATE

BUSINESS LAW & ETHICS

Website – www.meplclasses.com
Mail-id d2hclasses@mohitsir.com
Address – 59, JATINDRA MOHAN AVENUE, SOVABAZAR, KOLKATA – 700005
(Time Allowed – 3 hours) (Full Marks – 100 Marks)

Answer Question No.1 and any five from Question No.2, 3, 4, 5, 6, 7 & 8
Section -A
Question 1. (a) Multiple choice questions: [1 × 12 = 12]
(i) Contribution of the employer to employees’ provident fund is
a. 8.33%

b. 10%
c. 12%
d. None of the above

(ii) The minimum age prescribed for the appointment of a Managing Director is
.
a. 18 years
b. 21 years
c. 30 years
d. 70 years

(iii) Competency to contract relates to

a. Age of parties
b. Soundness of mind of the parties
c. Both age and soundness of mind
d. Intelligence of the parties
(iv) The appointment of an independent director shall be approved by the -
a. Board Meeting
b. General Meeting
c. Registrar of Companies
d. Central Government

(v) Many laws are to ethics of time.

a. Complimentary
b. Supplementary
c. Representative
d. None of the above

(vi) A proposal for a commercial transaction can be accepted

a. By notice of acceptance
b. By performance of the condition of proposal
c. By acceptance of consideration for a reciprocal promise
d. All of the above

(vii) At every AGM, not less than of the total number of directors shall retire by
rotation.
a. One third
b. Two third
c. Three fourths
d. Half

(viii) The employer’s and employee’s share of contribution of ESI fund is-
a. 1.75% and 4.75% of wages respectively
b. 3.25% and 0.75% of wages respectively
c. 10% and 3.75% of wages respectively
 d. 11% and 3.75% of wages respectively

(ix) Certificate of fitness to be a young worker is to be granted by –

a. Occupier of the factory
b. Inspector of the factory
c. Certifying surgeon
d. None of the above

(x) Law gives us a certain right because all humans are born .
a. Equal
b. Unequal
c. Subordinate
d. None of the above

(xi) Ethics are the set of moral principles that guide a person’s .
a. Behaviour
b. Philosophy
c. Religion
d. Profession

(xii) The following is the disadvantage of business ethics:

a) Through increasing morale and trust business can increase their market share
b) Publicity due to well and ethical performance
c) Acceptance of products of the company by the public
d) Diversity in achievements
(b) State whether the following statements are true or False : [1 × 7 = 7]
(i) Whole Time Director is not the employee of the company.
(ii) Ethics, in practical sense, is also known as moral action and is an applied discipline.
(iii) For the purpose of calculation of gratuity amount 26 days are taken as a month.
(iv) Silence on the part offeree amounts to acceptance.
(v)If an employee is transferred from one employment to another, the balance on his credit
in his PF Account cannot be transferred to the new establishment.
(vi) Meta ethics deal with the nature of Moral Judgement
(vii)The concept of Producer Company of India was introduced to allow cooperatives to
function as a corporate entity.

(c) Fill in the blanks : [1 × 6 = 6]

(i) A share capital of the company includes .
(ii) Integrity means that the holders of must avoid placing themselves under any
obligation to people.
(iii) Selflessness means that the holders of public office should act solely in terms of the
_.

(iv) An individual shall not be capable of becoming a partner of a Limited Liability

Partnership, if he has been found to be of by a court of competent
jurisdiction and the finding is in force.
(v) The tenure of the director appointed by the small shareholders shall be
years.

(vi) Negotiable instruments are those documents which are used to transfer money
between persons.
 Section – B
Question 2.
(a) Demonstrate the procedure for alteration of Memorandum of Association.

(b) Emotional intelligence is commonly defined by the four attributes. [10 + 5 =15]

Question 3.

(a) Demonstrate the procedure for rotation and re-appointment of a member of Board of
Directors of limited Company.

(b) Demonstrate the procedure for conducting a poll in a meeting in the light of the
Companies Act, 2013. [8+7 = 15]

Question 4.

(a) Reconcile the time limit for payment of wages keeping in view the provision of The Code
of Wages, 2019

(b) “An employee can be dismissed or punished during sickness”? Apply the related
provisions of the ESI Act with examples to substantiate your answer. [10+5=15]

Question 5.

(a) Analyse seven principles of public life in contemporary business world with examples.

(b) Critically examine the provisions for payment of commission in connection with
subscription to the securities, by a public limited company. [9+6 = 15]

Question 6.

(a) Analyse the standards of ethical conduct for a practicing Cost and Management
Accountant fixed by the Institute of Cost Accountant of India.

(b)Critically assess the conditions for Buy back of Shares by listed company in India with
an example. [5 + 10 = 15]
Question 7.

(a) Prepare a list of the provisions relating to protection of gratuity as discussed in Payment
of Gratuity Act, 1972.

(b)Demonstrate the methods of alternate dispute resolution processes in India.[5 +10 =15]

Question 8.

(a) Critically assess how the fundamental rights guarantee equality of citizens.

(b) Recommend the provisions that should be complied with by a liquidator in a case where
the Tribunal has made a winding up order for LLP. Refer to the related the legal and
regulatory provisions wherever necessary. [10+5= 15]
 MEPL CLASSES
CMA INTERMEDIATE
BUSINESS LAW & ETHICS
Website – www.meplclasses.com
Mail-id d2hclasses@mohitsir.com

Address – 59, JATINDRA MOHAN AVENUE, SOVABAZAR, KOLKATA – 700005

(Time Allowed – 3 hours) (Full Marks – 100 Marks)

Answer Question No.1 and any five from Question No.2, 3, 4, 5, 6, 7 & 8
Section -A

Question 1. (a) Multiple choice questions: [1 × 12 = 12]

(i) Contribution of the employer to employees’ provident fund is
a. 8.33%
b. 10%
c. 12%
d. None of the above
Answer (b)

(ii) The minimum age prescribed for the appointment of a Managing Director is
.
a. 18 years
b. 21 years
c. 30 years
d. 70 years
Answer (b)

(iii) Competency to contract relates to

a. Age of parties
b. Soundness of mind of the parties
c. Both age and soundness of mind
 d. Intelligence of the parties
Answer (c)
(iv) The appointment of an independent director shall be approved by the -
a. Board Meeting
b. General Meeting
c. Registrar of Companies
d. Central Government
Answer (b)

(v) Many laws are to ethics of time.

a. Complimentary
b. Supplementary
c. Representative
d. None of the above
Answer (c)

(vi) A proposal for a commercial transaction can be accepted

a. By notice of acceptance
b. By performance of the condition of proposal
c. By acceptance of consideration for a reciprocal promise
d. All of the above
Answer (d)

(vii) At every AGM, not less than of the total number of directors shall retire by
rotation.
a. One third
b. Two third
c. Three fourths
d. Half
 Answer (b)
(viii) The employer’s and employee’s share of contribution of ESI fund is-
a. 1.75% and 4.75% of wages respectively
b. 3.25% and 0.75% of wages respectively
c. 10% and 3.75% of wages respectively
d. 11% and 3.75% of wages respectively
Answer (b)

(ix) Certificate of fitness to be a young worker is to be granted by –

a. Occupier of the factory
b. Inspector of the factory
c. Certifying surgeon
d. None of the above
Answer (c)

(x) Law gives us a certain right because all humans are born .
a. Equal
b. Unequal
c. Subordinate
d.None of the above
Answer (a)

(xi) Ethics are the set of moral principles that guide a person’s .
a. Behaviour
b. Philosophy
c. Religion
d.Profession
Answer (a)
 (xii) The following is the disadvantage of business ethics:
a) Through increasing morale and trust business can increase their market share
b) Publicity due to well and ethical performance
c) Acceptance of products of the company by the public
d) Diversity in achievements
Answer (d)

(b) State whether the following statements are true or False : [1 × 7 = 7]

(i) Whole Time Director is not the employee of the company.
(ii) Ethics, in practical sense, is also known as moral action and is an applied discipline.
(iii) For the purpose of calculation of gratuity amount 26 days are taken as a month.
(iv) Silence on the part offeree amounts to acceptance.
(v)If an employee is transferred from one employment to another, the balance on his credit
in his PF Account cannot be transferred to the new establishment.
(vi) Meta ethics deal with the nature of Moral Judgement
(vii)The concept of Producer Company of India was introduced to allow cooperatives to
function as a corporate entity.

(c) Fill in the blanks : [1 × 6 = 6]

(i) A share capital of the company includes Stock.
(ii) Integrity means that the holders of public office must avoid placing themselves under
any obligation to people.

(iii)Selflessness means that the holders of public office should act solely in terms of the
public interest.

(iv) An individual shall not be capable of becoming a partner of a Limited Liability

Partnership, if he has been found to be of unsound mind by a court of competent
jurisdiction and the finding is in force.
(v) The tenure of the director appointed by the small shareholders shall be 3 consecutive
years.
(vi) A negotiable instrument endorsed in blank is payable to the bearer.
 Answers
1. (b) State TRUE or FALSE –
(i) False
(ii) True
(iii) True
(iv) False
(v) False
(vi) True
(vii) True
 Section – B
Question 2.
(a) Demonstrate the procedure for alteration of Memorandum of Association.

Answer:
Section 13 of the Companies Act, 2013 provides the provisions that deal with the alteration
of the memorandum. These provisions are: -
1.Alteration by special resolution: Company may alter the provisions of its memorandum
with the approval of the members by a special resolution.
2.Name Change of the company: Any change in the name of a company shall be effected
only with the approval of Central Government in writing. However, no such approval shall
be necessary where the change in the name of the company is only the deletion there from,
or addition thereto, of the word “Private”, consequent on the conversion of any one class
of companies to another class.
3.Entry in register of companies: On any change in the name of a company, the Registrar
shall enter the new name in the register of companies in place of the old name and issue a
fresh certificate of incorporation with the newname and the change in the name shall be
complete and effective only on the issue of such a certificate.
4.Change in the registered office: The alteration of the memorandum relating to the place
of the registered office from one State to another shall not have any effect unless it is
approved by the Central Government on an application in such form and manner as may be
prescribed.
5.Disposal of the application of change of place of the registered office: The Central
Government shall dispose of the application of change of place of the registered office
within a period of sixty days. Before passing of order, the Central Government may satisfy
itself that-
• The alteration has the consent of the creditors, debenture-holders and other persons
concerned with the company, or
• that the sufficient provision has been made by the company either for the due
discharge of all its debts and obligations, or adequate security has been provided for
such discharge.
6. Filing with Registrar: A company shall, in relation to any alteration of its memorandum,
file with the Registrar–
• the special resolution passed by the company under sub-section (1) of Section 13;
• the approval of the Central Government under sub-section (2), if the alteration
involves any change in the name of the company.
 7. Filing of the certified copy of the order with the registrar of the states: Where an
alteration of the memorandum results in the transfer of the registered office of a
company from one State to another, a certified copy of the order of the Central
Government approving the alteration shall be filed by the company with the Registrar
of each of the States within such time and in such manner as may be prescribed, who
shall register the same.
8. Issue of fresh certificate of incorporation: The Registrar of the State where the registered
office is being shifted to, shall issue afresh certificate of incorporation indicating the
alteration.
9. Change in the object of the company: A company, which has raised money from public
through prospectus and still has any unutilised amount out of the money so raised, shall
not change its objects for which it raised the money through prospectus unless a special
resolution through postal ballot is passed by the company and—
• the details, in respect to of such resolution shall also be published in the newspapers
(one in English and one in vernacular language) which is in circulation at the place
where the registered office of the company is situated and shall also be placed on
the website of the company, if any, indicating there in the justification for such
change;
• he dissenting shareholders shall be given an opportunity to exit by the promoters
and shareholders having control in accordance with regulations to be specified by
the Securities and Exchange Board.
10.Registrar to certify the registration on the alteration of the objects: The Registrar shall
register any alteration of the memorandum with respect to the objects of the company
and certify the registration within a period of thirty days from the date of filing of the
special resolution.
11.Alteration to be registered: No alteration made under this section shall have any effect
until it has been registered in accordance with the provisions of this section.

12.Only member have a right to participate in the divisible profits of the company: Any
alteration of the memorandum, in the case of a company limited by guarantee and not
having a share capital, intending to give any person a right to participate in the divisible
profits of the company otherwise than as a member, shall be void.

(b) Emotional intelligence is commonly defined by the four attributes. Explain.

[10 + 5 =15]
Answer:

Emotional intelligence is commonly defined by four attributes-

 ➢ Self-management – You’re able to control impulsive feelings and behaviors, manage
your emotions in healthy ways, take initiative, follow through on commitments, and
adapt to changing circumstances.

➢ Self-awareness – You recognize your own emotions and how they affect your thoughts
and behavior. You know your strengths and weaknesses, and have self-confidence.

➢ Social awareness – You have empathy. You can understand the emotions, needs, and
concerns of other people, pick up on emotional cues, feel comfortable socially, and
recognize the power dynamics in a group or organization.

➢ Relationship management – You know how to develop and maintain good relationships,
communicate clearly, inspire and influence others, work well in a team, and manage
conflict.

Question 3.

(a) Demonstrate the procedure for rotation and re-appointment of a member of Board of
Directors of limited Company.

Answer:
If the articles of association provided for retirement of all directors in the annual general
meeting, then all the directors are liable to directors. According to sec 152(6) of the
Companies Act, 2013, 2/3rd of the total number of directors is liable to retire by rotation
and those directors are called as retiring directors. Out of the retiring directors (2/3rd of
total number of directors) 1/3rd of directors is liable to vacate the office. The directors who
were in the office for the longer period, is liable to retire first. However, if the two or more
directors have been appointed on the same day then directors will retire based on the
mutual understanding between them and when mutual understanding is not available then
they retire based on draw by lots. Section 152(6) provides that unless the articles provides
otherwise for the retirement of all directors at every annual general meeting, not less the
two third (2/3rd) of the total number of directors (excluding independent directors,
whether appointed under this act or under any other law) of a public company shall:

1) be persons whose period of office is liable to determination by retirement of directors by

rotation; and

2) have as otherwise expressly provided in this Act, be appointed by the company in general
meeting. The remaining directors (i.e. non-rotational/non-retiring/permanent directors)
in the case of public company shall be appointed as per provisions contained in the articles
 of the company. Where a director retires by rotation at the annual general meeting of a
company.

(b) Demonstrate the procedure for conducting a poll in a meeting in the light of the
Companies Act, 2013. [8+7 = 15]

Answer:
Following are the procedure for conducting a poll in a meeting in light of the Companies
Act, 2013:
Section 109 (5) provides that where a poll is to be taken, the Chairman of the meeting shall
appoint such number of persons, as he deems necessary, to scrutinize the poll process and
votes given on the poll and to report thereon to him. Section 108(6) provides that the
Chairman of the meeting shall have power to regulate the manner in which the poll shall
be taken.
Rule 21 provides that Chairman of a meeting shall, in the poll process, ensure that-

• The Scrutinizers are provided with the Register of Members, specimen signatures of the
Members, Attendance Register and Register of proxies;
• The Scrutinizers are provided with all documents received by the company;
• The Scrutinizers shall arrange for polling papers and distribute them to the members and
proxies present at the meeting;
• In case of joint shareholders, the polling paper shall be given to the first named holder or
in his absence to the joint holder attending the meeting as appearing in the chronological
order in the folio;
• The polling shall be in Form No. MGT-12;
• The Scrutinizers shall keep a record of the polling papers received in response to poll by
initializing it;
• The Scrutinizers shall lock and seal and empty polling box in the presence of members and
proxies;
• The Scrutinizers shall open the polling box in the presence of two persons as witnesses
after the voting process is over;
• In case of ambiguity about the validity of a proxy, the Scrutinizer shall decide the validity
in consultation with the Chairman;
• The Scrutinizers shall ensure that if a member who has appointed in a proxy, has voted in
person, the proxy’s vote shall be disregarded;
• The Scrutinizers shall count the votes cast on poll and prepare a report thereon addressed
to Chairman;
• The Scrutinizer shall submit the report to the Chairman who shall countersign the same;
• The Chairman shall declare the result of voting on poll. The result may either be
announced by him or a person authorized by him in writing.
The Scrutinizers shall submit a report to the Chairman of the meeting in Form No. MGT-13.
The report shall be signed by the scrutinizer(s) and the same shall be submitted by them to
the Chairman within 7 days from the date of the poll is taken.

Question 4.

(a) Reconcile the time limit for payment of wages keeping in view the provision of The Code
of Wages, 2019.

Answer:
Time limit for payment of wages Section 17 of the Code of Wages, 2019-

1. The employer shall pay or cause to be paid wages to the employees, engaged on:
a) daily basis, at the end of the shift;
b) weekly basis, on the last working day of the week, that is to say, before the weekly
holiday;
c) fortnightly basis, before the end of the second day after the end of the fortnight;
d) monthly basis, before the expiry of the seventh day of the succeeding month.

2. Where an employee has been:

a) removed or dismissed from service; or
b) retrenched or has resigned from service, or became unemployed due to closure of
the establishment, the wages payable to him shall be paid within two working days
of his removal, dismissal, retrenchment or, as the case may be, his resignation.

3. Notwithstanding anything contained in sub-section (1) or sub-section (2), the

appropriate Government may, provide any other time limit for payment of wages where
it considers reasonable having regard to the circumstances under which the wages are
to be paid.

4. Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit for
payment of wages provided in any other law for the time being in force.

(b) “An employee can be dismissed or punished during sickness”? Apply the related
provisions of the ESI Act with examples to substantiate your answer. [7 + 8 =15]

Answer:
Section 73 provides that no employee shall dismiss, discharge or reduce or otherwise
punish an employee during the period the employee is in receipt of sickness benefit or
maternity benefit, nor shall be, except as provided under the regulations, dismiss, discharge
or reduce or otherwise punish an employee during the period which he is in receipt of
disablement benefit for temporary disablement or is under medical treatment for sickness
or is absent from work as a result of illness duly certified in accordance with the regulars to
arise out of the pregnancy or confinement rendering the employee unfit for work.

Jurisdiction of Civil Court

Section 75(3) provides that no Civil Court have jurisdiction to decide or deal with any
question or dispute as aforesaid or to adjudicate on any liability which is to be decided by
a medical board or a medical appeal tribunal or ESI Court. In ‘ESI Corporation V. Jalandhar
Gymkhana Club’- 1972 LLR 733 (P&H) it was held that a civil court cannot determine
whether this Act is applicable to an establishment or not.

Question 5.
(a) Analyse seven principles of public life in contemporary business world with examples.

Answer:
The seven principles of public life in contemporary business world:

➢ Selflessness - Holders of public office should act solely in terms of the public interest.

➢ Integrity - Holders of public office must avoid placing themselves under any obligation to
people or organizations that might try inappropriately to influence them in their work.
They should not act or take decisions in order to gain financial or other material benefits
for themselves, their family, or their friends. They must declare and resolve any interests
and relationships.

➢ Objectivity - Holders of public office must act and take decisions impartially, fairly and on
merit, using the best evidence and without discrimination or bias.

➢ Accountability - Holders of public office are accountable to the public for their decisions
and actions and must submit themselves to the scrutiny necessary to ensure this.

➢ Openness - Holders of public office should act and take decisions in an open and
transparent manner. Information should not be withheld from the public unless there are
clear and lawful reasons for so doing.

➢ Honesty - Holders of public office should be truthful

➢ Leadership - Holders of public office should exhibit these principles in their own behavior.
They should actively promote and robustly support the principles and be willing to
challenge poor behavior wherever it occurs.

(b) Critically examine the provisions for payment of commission in connection with
subscription to the securities, by a public limited company. [8 + 7 = 15]

Answer:
Section 8(6) provides that the Central Government may, by order, revoke the licence granted
to the company registered under this section-

• if the company contravenes any of the requirements of this section; or

• any of the conditions subject to which a licence is issued; or

• the affairs of the company are conducted fraudulently or in a manner violative of the
objects of the company or prejudicial to public interest.

The Central Government shall direct the company to convert its status and change its name
to add the words ‘Limited’ or ‘Private Limited’ to its name. No such order will not be passed
without giving opportunity to the company of being heard. A copy of such order shall be
given to the Registrar. The Registrar shall, without prejudice to any action taken, on
application, in the prescribed form, register the company accordingly.

Question 6.

(a) Analyse the standards of ethical conduct for a practicing Cost and Management
Accountant fixed by the Institute of Cost Accountant of India.

Answer:
The Institute has promulgated the following standards of ethical conduct for practitioners-

• maintain at all times independence of thought and action;

• not to express an opinion on cost / financial reports or statements without first assessing
her or his relationship with her or his client to determine whether such Member might
expect her or his opinion to be considered independent, objective and unbiased by one
who has knowledge of all the facts; and

• when preparing cost / financial reports or statements or expressing an opinion on cost /

financial reports or statements, disclose all material facts known to such Member in
 order not to make such cost / financial reports or statements misleading, acquire
sufficient information to warrant an expression of opinion and report all material
misstatements or departures from generally accepted accounting principles.

• not to disclose or use any confidential information concerning the affairs of such
Member’s employer or client unless acting in the course of his or her not to disclose or
use any confidential information concerning the affairs of such Member’s employer or
client unless acting in the course of his or her

• inform his or her employer or client of any business connections or interests of which
such Member’s employer or client would reasonably expect to be informed;

• not, in the course of exercising his or her duties on behalf of such Member’s employer or
client, hold, receive, bargain for or acquire any fee, remuneration or benefit without such
employer’s or client’s knowledge and consent; and

• take all reasonable steps, in arranging any engagement as a consultant, to establish a

clear understanding of the scope and objectives of the work before it is commenced and
will furnish the client with an estimate of cost, preferably before the engagement is
commenced, but in any event as soon as possible thereafter.

• conduct himself or herself toward other Members with courtesy and good faith;

• not to accept any engagement to review the work of another Member for the same
employer except with the knowledge of that Member, or except where the connection
of that Member with the work has been terminated, unless the Member reviews the
work of others as a normal part of his or her responsibilities

• not to attempt to gain an advantage over other Members by paying or accepting a

commission in securing management accounting work;
• not to act maliciously or in any other way which may adversely reflect on the public or
professional reputation or business of another Member;

• at all times maintain the standards of competence expressed by the Institute from time
to time;

• undertake only such work as he or she is competent to perform by virtue of his or her
training and experience and will, where it would be in the best interests of an employer
or client, engage, or advise the employer or client to engage, other specialists;
(b) Critically assess the conditions for Buy back of Shares by listed company in India with an
example. [5 + 10 = 15]

Answer:
Section 68(2) of Companies Act 2013 provides that a company shall purchase is own shares
or other specified securities if-

➢ the buy-back is authorized by its articles;

➢ a special resolution has been passed at a general meeting of the company authorizing
the buy back. This shall not apply to a case where-

• the buy-back is, 10% or less of the total paid up equity capital and free reserves of
the company; and
• such buy-back has been authorized by the Board by means of a resolution passed
at its meeting.

➢ the buy-back is 25% or less of the aggregate of paid-up capital and free reserves of
the company.

➢ In respect of the buy-back of equity shares in any financial year, the reference to
25% shall be construed with respect to its total paid-up equity capital in that
financial year.

➢ the ratio of the aggregate of secured and unsecured debts owed by the company
after buy- back is not more than twice the paid up capital and free reserves. The
Central Government may, by order, notify a higher ratio of the debt to capital and
free reserves for a class or classes of companies

➢ all the shares or other specified securities for buy-back are fully paid up;

➢ the buy-back of shares or other specified securities in a listed company is done in

accordance with the regulations made by SEBI; and

➢ the buy-back in respect of shares or other specified securities of a unlisted company

is to be in accordance with the rules as may be prescribed.

Example: Both the Companies Act and SEBI guidelines made provisions for companies
to buy back their own shares. Indian regulations require companies to cancel the shares
that it buys back unlike in some other countries where it's allowed to keep those shares
 alive on its own balance sheet. The concept of share buybacks is also common in India.
Several companies announce buybacks in order to improve shareholder value. For
example, in Oct-2022, Bajaj Auto announced a share buyback of about 64 lakh number
shares from the public. Let's say company ABC has ₹ 20,00,000 in cash and 1,00,000
shares in issue, trading at a price of ₹ 10 per share. If ABC buys back 150,000 shares,
using ₹ 1,50,000 in cash, it's left with 8,50,000 shares in circulation and ₹ 18,50,000 in
cash.

Question 7.

(a) Prepare a list of the provisions relating to protection of gratuity as discussed in Payment
of Gratuity Act, 1972.

Answer:
Section 13 provides that no gratuity payable under this Act shall be liable to attachment in
execution of any decree or order of any civil, revenue or criminal court.
Section 13A provides that notwithstanding anything contained in any judgment, decree or
order of any court, for the period commencing on and from the 3rd day of April 1997 and
ending on the day on which the Payment of Gratuity (Amendment) Act 2009 receives the
assent of the president, the gratuity shall be payable to an employee in pursuance of this
notification of the Government of India in the Ministry of Labor and Employment vide SO
1080 dated the 3rd day of April 1997 and the said notification shall be valid and shall be
deemed always to have been valid as if the payment of gratuity (Amendment) Act 2009 had
been in force at all material times and the gratuity shall be payable accordingly. Nothing
contained in this section shall extend or be construed to extend to affect any person with
any punishment or penalty whatsoever by reason of the non employment by him of the
gratuity during the period specified in this section which shall become due in pursuance of
the said notification.

(b) Demonstrate the methods of alternate dispute resolution processes in India. [5 +10 =15]

Answer:
There are many ways in which disputes can be resolved and grievances redressed.
Whenever there is a lawful agreement between parties that bind both of them with
certain duties and obligations, in cases they get breached, a dispute resolution body,
either a court or a tribunal can be approached. However, the law has also provided for
resolving disputes through mechanisms that do not involve courts or litigations. These
methods may include arbitration, mediation, conciliation, negotiation and others.
 Dispute resolution can be categorized into two broad heads, such as, adjudicative
processes and consensual processes. In adjudicative processes, a judge or an arbitrator
decides the case and determines the rights and obligations of the parties. Whereas in
consensual processes, parties themselves attempt to reach an agreement with or without
the help of a third party mediator. Provisions of dispute resolution clauses are imperative
in trade and commerce, especially in treaties and contracts. Without these provisions
protecting one’s rights in property or contract becomes difficult.

The most common form of judicial dispute resolution is litigation. Litigation is initiated
when one party files suit against another. The proceedings are very formal and are
governed by rules, such as rules of evidence and procedure, which are established by the
legislature. Outcomes are decided by impartial judges, based on the factual questions of
the case and the applicable law. The verdict of the court is binding; however, both parties
have the right to appeal the judgment to a higher court. Methods of dispute resolution
that do not involve litigation through courts generally are classified under alternative
dispute resolution (ADR) methods. ADR generally depends on agreement by the parties
to use ADR processes, either before or after a dispute has arisen. ADR has experienced
steadily increasing acceptance and utilization because of a perception of greater
flexibility and speedy resolution of disputes, among other perceived advantages.
Alternative Dispute Resolution is a term used to describe several different modes of
resolving legal disputes other than filing law suits and get timely justice. To solve the
problem of delayed justice ADR Mechanism has been developed in response thereof. Its
methods can help the parties to resolve their disputes at their own terms expeditiously.
Alternative dispute redressal techniques can be employed in several categories of
disputes, especially civil, commercial, industrial and family disputes. The term
“Alternative Disputes Resolution” takes in its fold, various modes of settlement including,
Lok Adalats, arbitration conciliation and Mediation It was suggested by the Law
Commission of India that the Court may require attendance of any party to the suit or
proceedings to appear in person with a view to arriving at an amicable settlement of
dispute between the parties and make attempts to settle the dispute between the parties
amicably.

Question 8.

(a) Critically assess how the fundamental rights guarantee equality of citizens.

Answer:

“Equality is a dynamic concept with many aspects and dimensions and it cannot be
described, Cabined and confined” within traditional limits from a positivistic point of view,
equality is antithesis to arbitrariness.
In fact equality and arbitrariness are sworn enemies, one belongs to the rule of law in a
republic while the other, to the whim and caprice of an absolute monarch. Where an act is
arbitrary, it is implicit in it that it is unequal both according to political logic and
constitutional law and is therefore violated of Article14.

Article 15(1) provides that the state shall not discriminate against any citizen on grounds
only of :-

• Religion
• Race
• Caste
• Sex
• Place of birth or
• Any of them

Article 15 (2) provides that :- No citizen shall be on above grounds, subject to any disability,
liability, restriction or condition with regard to:
(a) access to shops, public restaurants, hotels and places of public entertainment; or
(b) the use of wells, tanks, bathing ghats, roads and places of public resort maintained
wholly or partly out of State funds or dedicated to the use of the general public.
Exceptions :- Article 15 (3), (4) and (5) contain exceptions to the general principal laid down
under Article 15 (1) and (2):-
Nothing in this article shall prevent the State from making any special provision for women
and children.
Nothing in this article shall prevent the State from making any special provision for the
advancement of any socially and educationally backward classes of citizens or for the
Scheduled Castes.
Nothing in this article shall prevent the State from making any special provision, by law, for
the advancement of any socially and educationally backward classes of citizens or for the
Scheduled Castes or the Scheduled Tribes in so far as such special provisions relate to their
admission to educational institutions including private educational institutions, whether
aided or unaided by the State, other than the minority educational institution.

Article-16: Equality of opportunity in matters of public employment :-

• There shall be equality of opportunity for all citizens in matters relating to employment
or appointment to any office under the State.
• No citizen shall, on grounds only of: religion, race, caste, sex, descent, place of birth,
residence, or any of them, be ineligible for, or discriminated against in respect of, any
employment or office under the State.

Exceptions:-
• Nothing in this article shall prevent Parliament from making any law prescribing, in
regard to a class or classes of employment or appointment to an office under the
Government of, or any local or other authority within, a State or Union territory, any
requirement as to residence within that State or Union territory prior to such
employment or appointment.
• Nothing in this article shall prevent the State from making any provision for the
reservation of appointments or posts in favour of any backward class of citizens which,
in the opinion of the State, is not adequately represented in the services under the State.
• Nothing in this article shall prevent the State from making any provision for reservation
in matters of promotion, with consequential seniority, to any class or classes of posts in
the services under the State in favour of the Scheduled Castes and the Scheduled Tribes
which, in the opinion of the State, are not adequately represented in the services under
the State.
• Nothing in this article shall affect the operation of any law which provides that the
incumbent of an office in connection with the affairs of any religious or denominational
institution or any member of the governing body thereof shall be a person professing a
particular religion or belonging to a particular denomination.
Abolition of Untouchability “Untouchability” is abolished and its practice in any form is
forbidden. The enforcement of any disability arising out of “Untouchability” shall be an
offence punishable in accordance with law. The term “Untouchability” is not defined
under the Constitution. However, it refers to the social disabilities imposed on certain
class of person by reason of their birth in certain caste. However, it does not cover social
boycott of a few individuals.

Abolition of Titles:

• No title, not being a military or academic distinction, shall be conferred by the State.
• No citizen of India shall accept any title from any foreign State
• No person who is not a citizen of India shall, while he holds any office of profit or trust
under the State, accept without the consent of the President any title from any
foreign State.
• No person holding any office of profit or trust under the State shall, without the
consent of the President, accept any present, emolument, or office of any kind from
or under any foreign State.
Article-17: abolishes the practice of untouchability in any form, making it an offense
punishable by law.
Article-18: prohibits the State from conferring any titles other than military or academic
distinctions, and the citizens of India cannot accept titles from a foreign state. Thus,
Indian aristocratic titles and title of nobility conferred by the British have been abolished.
However, military and academic distinctions can be conferred on the citizens of India.
(b) Recommend the provisions that should be complied with by a liquidator in a case where
the Tribunal has made a winding up order for LLP. Refer to the related the legal and
regulatory provisions wherever necessary. [8 + 7 =15]

Answer:

Winding up by Tribunal
Petition for winding up Rule 26 provides that an application to the Tribunal for the winding
up of an LLP shall be by a petition presented by –
• the LLP or any of its partner or partners;
• any secured creditor or creditors, including any contingent or prospective creditor or
creditors;
• the Registrar; or
• any person authorized by the Central Government in this behalf;
• the Central Government, in a case falling under Section 64(d). A petition filed by the
LLP or any of its partner or partners for winding up before the Tribunal shall be
admitted only if accompanied by a statement of affairs of the LLP on the date of
petition and a resolution of three fourths of the total number of partners.

The Registrar shall not a present a petition on the ground that the LLP is unable to pay its
debts unless it appears to him either from the financial condition of the LLP as disclosed in
its Statement of Accounts and Solvency or from the report of an Inspector that the LLP is
unable to pay its debts. Further the Registrar shall obtain then previous sanction of the
Central Government to the presentation of a petition. The Central Government shall not
accord its sanction for the presentation of the petition unless the LLP concerned has been
given a reasonable opportunity of making representations, if any.
 MEPL CLASSES
CMA INTER – LAW & ETHICS

Website- www.meplclasses.com
Mail Id: - d2hclasses@mohitsir.com

Main Centre- 59, Jatindra Mohan Avenue Shobhabazar Kolkata-700005

(a) Multiple Choice Question: 1 Marks Each:

(1) A proposal for a commercial transaction can be accepted

a. By notice of acceptance
b. By performance of condition of proposal
c. By acceptance of consideration for a reciprocal promise
d. All of the above

2) Which one of the following amounts to safety measure under Factories Act, 1948?
a. Artificial Humidification b. Ventilation
c. Fencing of factory d. First aid appliances

3) The age of an adolescent worker under Factories Act, 1948 is

a. 10 years b. 14 years
c. 18 years d. 21 years

4) Which one of the following will not be included in the definition of wages under Payment of
Gratuity Act, 1972?
a. Dearness Allowance b. Overtime
c. Cash value for consideration d. All of the above

5) Contribution of the employer to employees’ provident fund is

a. 8.33% b. 10%
c. 12% d. None of the above

6) For which of the following purposes can Securities Premium Account be utilized?
a. In writing off the preliminary expenses b. Buy back of shares
c. Issue of bonus shares d. Any of the above

7) The quorum for the Annual General Meeting for a public company having the number of members
more than 5000 is .
a. 2 b. 15
c. 30 d. None of the above

8) Which of the following is a method for voting?

a. Voting by show of hands b. Voting through electronic means
c. Voting by poll d. All of the above

9) The minimum age prescribed for the appointment of a Managing Director is .

a. 18 years b. 21 years
c. 30 years d. 70 years

10) At every AGM, not less than of the total number of directors shall retire by rotation.
a. One third b. Two third
c. Three fourths d. Half

11) The relationship between laws and ethics is:

a. Complex b. Simple
c. Inexplicable d. None of the above

12) Ethics are the set of moral principles that guide a person’s .
a. Behaviour b. Philosophy
c. Religion d. Profession

13) Competency to contract relates to

a. Age of parties b. Soundness of mind of the parties
c. Both age and soundness of mind d. Intelligence of the parties

14) Compensatory holidays are to be availed of within under Factories Act, 1948.
a. 3 months b. 2 months
c. 6 months d. 4 months

15) Certificate of fitness to be young worker is to be granted by –

a. Occupier of the factory b. Inspector of the factory
c. Certifying surgeon d. None of the above

16) The employer shall display an abstract of the Payment of Gratuity Act and rules in form no.
a. U b. H
c. B d. N

17) Withdrawal from PF may be allowed for

a. Marriage of the employer b. Post matriculation education of children
c. For purchase of a dwelling place d. For illness in certain cases

18) Bonus Shares may be issued out of the.

a. Free Reserves b. Securities Premium account
c. Capital Redemption Reserve account d. Any of the above

19) The minimum number of directors for a public company is.

a. 1 b. 2
c. 3 d. 7

20) The appointment of an independent director shall be approved by the

a. Board Meeting b. General Meeting
c. Registrar of Companies d. Central Government

21) No independent director shall hold office for more than consecutive terms.
a. 2 b. 3
c. 4 d. 5

22) If a company does not have a common seal, the share certificate shall be signed by
a. Two directors b. One director and Company Secretary
c. Either (a) or (b) d. None of the above

23) Law gives us a certain right because all humans are born .
a. Equal b. Unequal
c. Subordinate d. None of the above

24) Many laws are to ethics of time.

a. Complimentary b. Supplementary
c. Representative d. None of the abo

25) Right to Property is a:

a) Fundamental Right b) Fundamental Duty
c) Constitutional Right d) None of the above

26) The Constitution of India describes India as:

a) A federation b) Quasi-federal
c) A Union of states d) None of the above

27) Constitution is the:

a) Law of the land b) Administrative Law of the land
c) Constitutional Law of the land d) None of the above

28) On which date was the Constitution of India adopted by Constituent Assembly?
a) August 15, 1947 b) January 26, 1950
c) November 26, 1949 d) January 30, 1948

29) What is the chief source of legal authority in India?

a) People b) Constitution of India
c) Parliament d) President of India

30) Acceptance to be a valid must

a) Be absolute b) Be unqualified
c) Both be absolute & unqualified d) Be conditional

31) A proposal can be accepted

a) By notice of acceptance b) By performance of condition of proposal
c) By acceptance of consideration for a reciprocal promise d) All of the above

32) Competency to contract relates to

a) Age of parties b) Soundness of mind of the parties
c) Both age and soundness of mind d) Intelligence of the parties

33) If only a part of the consideration or object is unlawful, the contract under Section 24 shall be:
a) Valid b) Voidable
c) Void d) Illegal

34) When the consent is caused by undue influence, the contract under Section 19A is:
a) Valid b) Void
c) Voidable d) Illegal
35) A sale is complete when the following is transferred from one.
a) Money b) Ownership
c) Usage d) None of the above

36) The Consideration in contract of sale must be:

a) Immovable b) Movable
c) Price d) None of the above

37) The subject matter of the contract must be:

a) Sale b) Product
c) Service d) None of the above

38) On which date was the Sale of Goods enforced?

a) 1948 b) 1930
c) 1932 d) 1951

39) As per Sale of Goods Act, this is not included:

a) Growing crop b) Money
c) Table d) Goodwill

40) The Negotiable Instruments Act, 1881 is an Act to define and amend the law relating to:
a) cheques b) bills of exchange
c) promissory notes, d) All of the above

41) “banker” includes:

a) Any person acting as an employee of any
b)Any person acting as a banker and any bank and any post office saving bank. post office saving
bank
c) Any person acting as an agent of any bank
d)Any person acting as a Managing Director of and any post office saving bank. any bank and any
post office saving bank

42) Which is NOT an example of “Promissory Note”:

a) “I acknowledge myself to be indebted to B in
b) Mr B, I.O.U ₹1,000.” ₹1,000, to be paid on demand, for value received.”
c) “I promise to pay B or order ₹500”
d) None of the above

43) In a Promissory Note, how many parties are involved:

a) One b) Two
c) Three d) Four

44) In a Promissory Note, how many parties are involved:

a) One b) Two
c) Three d) Four

45) The Negotiable Instruments Act, 1881 extends to:

a) Only to Capital cities of the States.
b) The whole of India.
c) The whole of India except the State of Jammu and Kashmir.
d) The whole of India except the Union Territories.
46) An act of a firm means:
a) Any partner or agent of the firm which gives rise to a right enforceable by or against the firm
b) Any act by all the partners
c) Any omission by all the partners
d) All of the above

47) Partnership is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all. Does it mean that losses are not shared?
a) A minor may be admitted in partnership, only for the profits, but he cannot share in losses.
b)It also depends on the partnership agreement. A person may share the profits but may not share
in losses.
c) Sharing of profits also include losses (negative profits)
d) All of the above

48) Where no provision is made by contract between the partners for the duration of their
partnership, or for the determination of their partnership, the partnership is called as:
a) Particular partnership b) Partnership for a fixed term
c) partnership at will d) None of the above

49) What information shall be given to the Registrar of Firms by a registered partnership firm:
a) New opening/closing of the existing branch, if any.
b) Change in the name of and address of the partner (s)/change in the constitution of the firm.
c) What there is change in the name of the firm or in location of the principal place of business.
d) All of the above.

50) Who can inspect the Register and filed documents at the office of the Registrar:
a) Any Government servant b) The Partners of the firm
c) The partners of the other firms d) Any person

51) What are the right of partners after dissolution:

a)To have the surplus distributed among the partners or their representatives according to their
rights.
b) To have business wound up after dissolution
c) To have the property of the firm applied in payment of the debts and liabilities of the firm.
d) All of the above

52) Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or
continuing partners carry on the business of the firm with the property of the firm without any final
settlement of accounts as between them and the outgoing partner or his estate, then, in the
absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of
himself or his representatives to such share of the profits made since he ceased to be a partner as
may be attributable to the use of his share of the property of the firm or to interest at the rate of on
the amount of his share in the property of the firm:
a) 9% p.a. b) 18% p.a.
c) 6% p.a. d) 12% p.a.

53) The dissolution of partnership means:

a) It means the dissolution of partnership between all the partners of a firm
b) It means the change in the relations of the partners
c) It means the reconstitution of the firm.
d) None of the above.

54) In what circumstances a partner may retire:

a) In accordance with an express agreement by the partners
b)Where the partnership is at will, by giving notice in writing to all the other partners of his
intention to retire.
c) With the consent of all the other partners
d) All of the above.

55) What would be the position, where a minor elect not to become a partner:
a) He shall be entitled to sue the partners for his share of the property and profits.
b)His rights and liabilities shall continue to be those of a minor under this section up to the date on
which he gives public notice.
c) His share shall not be liable for any acts of the firm done after the date of the notice.
d) All of the above

56) Which of the following is true about a Limited Liability Partnership?

a) A Limited Liability Partnership is not a
b)A Limited Liability Partnership is a legal distinct entity from its partners entity separate from its
partners
c) A Limited Liability Partnership is a body corporate
d) Both b and c are correct

57) Which of the following is true about the number of designated partners required in a Limited
Liability Partnership?
a) A Limited Liability Partnership can have at least two designated partners
b) A Limited Liability Partnership can have at least three designated partners
c) A Limited Liability Partnership can have at least seven designated partners
d) A Limited Liability Partnership can have at least four designated partners

58) What is the exact time limit under which a Limited Liability Partnership must file its annual
return with the registrar?
a)A Limited Liability Partnership must file its annual return within 30 days from the closing its
financial year
b)A Limited Liability Partnership must file its return within 45 days annual from the closing of its
financial year
c)A Limited Liability Partnership must file its annual return within 15 days from the closing of its
financial year
d)A Limited Liability Partnership must file annual return within 60 days from the closing of its
financial year.

59) Every Limited Liability Partnership must maintain its books of accounts diligently. Those books of
accounts should maintain .
a)Particulars of the receipts and expenditures at the Limited Liability Partnership with the details of
those transactions
b)An inventory of the cost of goods purchased, work in progress, inventories, finished goods as well
as the cost of goods sold
c) A complete record of the assets and liabilities of the Limited Liability Partnership
d) All of the above

60) As per Sale of Goods Act, this is not included:

a) A Limited Liability Partnership should maintain its accounts at the branch office
b) A Limited Liability Partnership should maintain its accounts at the corporate office
c) A Limited Liability Partnership should maintain its accounts at the head office
d) A Limited Liability Partnership should maintain its accounts at the registered office

61) As per Sale of Goods Act, this is not included:

a) A Limited Liability Partnership should maintain its books of accounts on the accrual basis
b) A Limited Liability Partnership should maintain its books of accounts on the cash basis
c)A Limited Liability Partnership should maintain its books of accounts based on the double-entry
system of accounting
d) All of the above.

62) Age of adolescent worker is

a) 10 b) 14
c) 18 d) 21

63) Certificate of fitness to be young worker is to be granted by

a) Occupier of the factory b) Inspector of the factory
c) Certifying surgeon d) None of the above

64) White wash or color wash should be carried out atleast once in every period of
a) 14 months; b) 24 months;
c) 48 months; d) 60 months

65) Where more than workers are employed provision shall be made for cool drinking water
during hot weather.
a) 100 b) 250
c) 500 d) 1000

66) Shelter rooms with suitable lunch rooms are to be provided, if more than workers are
employed.
a) 100 b) 250
c) 500 d) none of the above.

67) No female child shall be allowed to work in any factory except between
a) 8 a.m., and 7 p.m.; b) 6 p.m., and 6 a.m.,
c) 6 a.m., and 7 p.m., d) 10 p.m. and 5 a.m.,

68) Compensatory holidays are to be availed within month.

a) 1 month b) 2 months
c) 6 months d) 9 months

69) Which one of the following amounts to safety measure?

a) Artificial humidification; b) Ventilation;
c) Fencing of factory; d) First aid appliances

70) Identify from the following which is the power of Inspector of Factory. a) Enter into any place of
a) factory; b) Make inquiry into any accident;
c) Seize or take copies of any document; d) All the above.

71) Weekly holiday shall be

a) First day of the week; b) Last day of the week;
c) Third day of the week; d) None of the above

72) Which does not amount to retirement?

a) Retrenchment; b) Resignation;
c) Dismissal; d) Superannuation.

73) Gratuity is payable to an employee

a) On his superannuation; b) Retirement;
c) Retrenchment; d) In all the above cases

74) The gratuity is payable to an employee shall not exceed

a) 12 months pay; b) 16 months pay;
c) 20 months pay; d) 24 months pay.

75) The employer shall display an abstract of the Act and the Rules in Form No
a) U b) H
c) O d) N

76) If sufficient cause is shown the appropriate Government may condone the delay in filing appeal
against the order of the Controlling Authority, for
a) 30 days; b) 60 days;
c) 90 days; d) No time limit.

77) Nomination is to be made by an employee

a) Immediately on his appointment; b) After completion of one year service;
c) After he is made permanent; d) None of the above

78) Which one of the following is to be included in the definition of ‘wage’?

a) Dearness allowance; b) Overtime allowance;
c) Commission; d) House rent allowance.

79) If an employer intends to close the business he is to send notice to the Controlling Authority
within before the intended closure.
a) 10 days; b) 30 days;
c) 60 days; d) 90 days.

80) Nomination is to be filed in

a) Single form b) Duplicate
c) Triplicate d) Quadruplicate

81) Which will not amount to service of notice under the rule?
a) Personal service; b) By registered post;
c) By courier; d) Both a and b.

82) Which one of the following will not include in the definition of basic wages?
a) Dearness allowance; b) Overtime;
c) Cash value for consideration; d) All the above.

83) The contribution of employer to insurance fund is

a) 1% b) 10%
c) 12% d) None of the above.

84) Contribution of 10% to PF is applicable to

a) Any establishment in which less than 20 employees are employed;
b) Any establishment declared as sick; industrial company;
c) Jute company;
d) All of the above

85) The minimum administrative charge payable by the employer to the fund is
a) ₹ 75 b) ₹ 500
c) ₹ 1,000 d) None of the above

86) The maximum penalty recoverable from the employer who makes the default in payment of any
contribution to the fund is
a) 5% b) 10%
c) 15% d) 25%

87) Withdrawal from PF may be allowed for

a) Marriage of the employer; b) Post matriculation education of children;
c) For the purchase of a dwelling place; d) For illness in certain cases.

88) The Employees Pension Scheme provides for

a) Superannuation pension; b) Orphanage pension;
c) Both (a) and (b); d) None of (a) or (b).

89) Contribution of the employer to employees’ pension scheme is

a) 8.33% b) 10%
c) 12% d) None of the above.

90) The following cannot be nominated for the purposes of EPF Act
a) Wife;
b) Sons of a deceased sons who have attained majority;
c) Father in law;
d) Unmarried daughter.

91) While filing appeal to EPF Appellate Tribunal the employer has to deposit of the amount due
from him.
a) 25% b) 50%
c) 75% d) None of the above.

92) The contribution shall be paid in a bank within days of the last day of the calendar month in
which the contribution fall due for any wage period.
a) 7 b) 14
c) 21 d) 30

93) An appeal shall lie to High Court from the orders of ESI within days from the date of order
of the ESI Court.
a) 30 b) 60
c) 90 d) None of the above.

94) A member of the Corporation shall cease to be a member if he fails to attend

consecutive meeting.
a) 3 b) 5
c) 7 d) None of the above.

95) ESI Fund consists of

a) Contribution; b) Grants from governments;
c) Donations; d) All the above

96) The Corporation may with the approval of establish and maintain in a State,
hospitals, dispensaries etc.,
a) Central Government; b) State Government;
c) Local Authority; d) None of the above.

97) Who will not the following be considered as an employee?

a) Canteen workers; b) Casual workers;
c) Partners; d) Part time employee.

98) Who, among the following, is not the Principal Employer?

a) Occupier of the factory; b) Owner of the factory;
c) Legal representative of the owner; d) Legal representative of the contractor.

99) Seasonal factory is the one which is engaged for a period not exceeding in a year.
a) 7 months; b) 6 months;
c) 3 months; d) None of the above

100) Which, among the following, will not be included in the definition of ‘wages’?
a) Payment made on authorized leave;
b) Travelling allowance;
c) Payment made on lock out;
d) Payment made for lay off.

101) ESI Corporation is a

a) Partnership firm; b) Limited Liability Partnership;
c) Body Corporate; d) Hindu Undivided Family.

102) Which one of the following is not correct in regard to share certificate?
a) The Company Secretary shall issue the share certificate.
b) The share certificate shall be issued in pursuance of a resolution of the Board;
c) Every share certificate shall be distinguished to its distinctive number.
d) The shares may be in the dematerialized form.

103) If a company does not have a common seal, the share certificate shall be signed by
a) Two directors; b) One director and Company Secretary;
c) Either (a) or (b); d) None of the above.

104) In case of unlisted company the duplicate share certificate shall be issued within a period of
a) 45 days b) 3 months
c) 6 months d) None of the above

105) The Bonus shares may be issued out of the

a) Free reserves; b) Securities premium account;
c) Capital redemption reserve account; d) Any of the above

106) For which purposes securities premium account can be utilized?

a) In writing off the preliminary expenses;
b) Buy back of shares;
c) Issue of bonus shares;
d) Any of the above.

107) The quorum for a public company having the number of members more than 5000 is
a) 2 b) 5
c) 15 d) 30

108) An instrument of the proxy shall be deposited with the registered office of the company
before the conduct of the meeting.
a) 7 hours b) 21 hours
c) 48 hours d) 60 hours.

109) In case of e-voting notice shall be sent as attachment in – a) PDF b) word file c) excel d) access

110)In the case of an adjourned meeting the company shall give not less than notice to the
members.
a) 1 days b) 3 days
c) 7 days d) None of the above

111) Which one of the following is not correct?

a) The articles of the company shall provide for the appointment of Chairman in a meeting;
b)The members personally present at the meeting shall elect one of themselves to be Chairman on
a show of hands, if the article does not provide for the same;
c) Managing Director is the Chairman of the meeting
d)The member selected as Chairman as a result of poll, continue the Chairman, who is elected by
show of hands.

112) Which of the following is the method of voting?

a) Voting by show of hands; b) Voting through electronic means;
c) Voting by poll; d) All of the above

113) A poll demanded on any question shall be taken within from the time when the demand
was made.
a) Immediately; b) 12 hours;
c) 24 hours; d) 48 hours.

114) Which one cannot be transacted through postal ballot?

a) Appointment of auditor;
b) Election of a Director;
c) Buy back of shares by a company;
d) Change in place of registered office outside the local limits of any city, town or village.

115) The assent or dissent received after days in postal ballot, from the date of issue of
notice, shall be treated as if no reply has been received from the member.
a) 3; b) 7;
c) 30; d) 45
116) If any inspection is refused or if any copy required is not furnished within the specified time, the
company shall be liable to a penalty of `
a) ₹10000; b) ₹25000;
c) ₹50000; d) ₹1 lakh

117) The minimum number of directors for a public company is

a) 1; b) 2;
c) 3; d) 7.

118) What is the paid up share capital fixed for the appointment of a woman director?
a) ₹100 crores; b) ₹300 crores;
c) ₹500 crores; d) None of the above.

119) The appointment of an independent director shall be approved by the

a) Board meeting; b) General meeting;
c) Registrar of Companies; d) Central Government.

120) The tenure of director appointed by small shareholders shall be

a) Up to the date of next AGM; b) 1 year;
c) 3 years; d) 5 years

121) No independent director shall hold office for more than consecutive terms.
a) 2; b) 3;
c) 4; d) 5.
 MEPL CLASSES
INTERMEDIATE / EXECUTIVE
COMPANY LAW
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Address – 59, JATINDRA MOHAN AVENUE , SOVABAZAR, KOLKATA – 700005

(TIME ALLOTED – 90 MINUTES ) (MARKS ALLOTED – 50 MARKS )

EACH QUESTION IS OF 5 MARKS

Question 1.
The Annual General Meeting (AGM) was called by a proper and valid notice to be held on Sunday,
the 7th August, 2023. Due to lack of quorum for the meeting, it was adjourned for the same day,
time and place in the next week. In the adjourned meeting on a particular resolution, two
shareholders holding shares to the nominal value of Rs. 5,50,000 demanded a poll, but the Chairman
refused to conduct the poll. In the light of the provisions of the Companies Act, 2013, give your
opinion on the above happenings. Also, decide the validity of the meeting, if it would have been
called on Monday, the 15th August, 2023.

Answer to Question 1.
As per section 96 of the Companies Act, 2013, an Annual General Meeting can be called during
business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday. It should
be held either at the registered office of the company or at some other place within the city, town
or village in which the registered office of the company is situated. The Central Government is
empowered to exempt any company from these provisions, subject to such conditions as it may
impose. "National Holiday" for this purpose means and includes a day declared as National Holiday
by the Central Government. According to SS-2, National Holiday means Republic Day i.e. 26th
January, Independence Day i.e. 15th August, Gandhi Jayanti i.e. 2nd October and such other day as
may be declared as National Holiday by the Central Government

Further, as per section 109 of the Companies Act, 2013, before or on the declaration of the result of
the voting on any resolution on show of hands, a poll may be ordered to be taken by the Chairman
of the meeting on his own motion, and shall be ordered to be taken by him on a demand made in
that behalf by the following person(s):

(a) in the case a company having a share capital: by the members present in person or by proxy,
where allowed, and having not less than one-tenth of the total voting power or holding shares on
which an aggregate sum of not less than Rs.5,00,000/- or such higher amount as may be prescribed,
has been paid-up; and
(b) in the case of any other company: by any member or members present in person or by proxy,
where allowed, and having not less than one-tenth of the total voting power. In the above case, the
Chairman cannot refuse to conduct the poll as the shareholders hold shares which in aggregate sum
is Rs. 5,50,000 which is higher than what is prescribed.

A poll when validly demanded shall be taken, even if the Chairman had refused to grant the poll.
Consequently, if a valid demand for poll is refused by the Chairman, the Meeting shall either be re-
convened or a new Meeting should be convened to hold the poll or to consider the item in respect
of which the valid demand for poll was not granted, as the case may be. [Held in the case of M. K.
Srinivasan and Others v. W. S. Subrahmanya Ayyar and Others (1932)]

Further, holding of the Annual General Meeting on Sunday the 7th August, 2023 shall be valid as
Sunday is not a National Holiday. However, the meeting convened on 15th August, 2023 shall be
invalid being a National holiday.

Question 2.
In the general meeting of CBD Ltd. six individual members were present and the meeting was
adjourned by the Chairman of the meeting at his own will, to the same day of the next week as an
important member was not present for the meeting. In this context, referring to the provisions of
the Companies Act, 2013 answer the following questions :

(i) Could the Chairman adjourn the meeting, if the company’s shareholders (i.e. the members)
strength was 300 ?

(ii) For the adjourned general meeting is any fresh notice of meeting is to be sent ?

(iii) If only three members were present in the adjourned meeting, where in such a meeting too the
important member (shareholder) could not participate, would the meeting be considered as duly
convened and conducted ?

Answer to Question 2.

Notice of an adjourned meeting : As per SS-2, If a Meeting is adjourned for a period of less than
thirty days, the company shall give not less than three days’ Notice specifying the day, date, time
and venue of the Meeting, to the Members either individually or by publishing an advertisement in
a vernacular newspaper in the principal vernacular language of the district in which the registered
office of the company is situated, and in an English newspaper in English language, both having a
wide circulation in that district. However, if a Meeting is adjourned for a period not exceeding three
days and where an announcement of adjournment has been made at the Meeting itself, giving in
the details of day, date, time, venue and business to be transacted at the adjourned Meeting, the
company may also opt to give Notice of such adjourned Meeting either individually or by publishing
an advertisement, as stated above

No quorum in an adjourned meeting : If at the adjourned meeting also, a quorum is not present
within half- an-hour from the time appointed for holding meeting, the members present, being not
less than two in number, will constitute the quorum.
Para 15.1 of SS-2 provides that, a duly convened meeting shall not be adjourned unless
circumstances warrant. The chairman may adjourn the meeting with the consent of the members
present, at which quorum is present.

If a Meeting is adjourned sine-die or for a period of thirty days or more, a Notice of the adjourned
Meeting shall be given in accordance with the provisions relating to Notice.

The words, personally present exclude proxies. In case two or more corporate bodies who are
members of a company are represented by single individual, each of the body corporate will be
treated as personally present by the individual representing it. If, for instance, he represents three
corporate bodies, his presence will be counted as three members being present in person for
purposes of quorum. In light of this the queries will be answered as below:

(i) Where number of members of a public company is not more than 1000 the quorum for the
meeting shall be 5 members personally present. Hence, assuming that 6 members were personally
present the quorum was present at the general meeting. The chairman cannot adjourn the meeting
at his own will without the consent of the member if all the six members were personally present,
since the quorum is present. But in the event of disorder or other like causes, when it becomes
impossible to conduct the Meeting and complete its business, The Chairman may also adjourn a
Meeting.

(ii) Yes, notice need to be sent individually or by publishing in news daily in compliance to Para 15.3
of SS-2.
(iii) If at the adjourned meeting, the quorum is not present within half- an hour from the time
appointed for holding meeting, the members present, being not less than two in numbers, will
constitute the quorum. In this case, 3 members are present in the adjourned meeting, it will be
considered as a valid meeting. [Section 103(3)]

Question 3.
For the annual general meeting (AGM) of a company proxies were received from A, B, C and D. C
and D deposited their proxy forms 72 hours before the meeting, as the Articles of the company
requires for deposit of proxy forms 72 hours before the meeting. A and B deposited proxy forms 50
hours before the meeting and hence the Chairman rejected their proxy forms. C represented 48
shareholders, having 8% shareholding and D represented one shareholder having 11% voting rights.
In the light of the provisions of the Companies Act, 2013 explain the validity of the proxies.

Answer to Question 3.

As per section 105 of the Companies Act, 2013 read with rule 19 of the Companies (Management
and Administration) Rules, 2014, a Proxy can act on behalf of Members not exceeding fifty and
holding in the aggregate not more than ten percent of the total share capital of the company carrying
Voting Rights.
However, a Member holding more than ten percent of the total share capital of the company carrying
Voting Rights may appoint a single person as Proxy for his entire shareholding and such person shall
not act as a Proxy for another person or shareholder.
If a Proxy is appointed for more than fifty Members, he shall choose any fifty Members and confirm
the same to the company before the commencement of specified period for inspection. In case, the
Proxy fails to do so, the company shall consider only the first fifty proxies received as valid. The
instrument appointing the proxy must be deposited with the company, 48 hours before the meeting.
Any provision contained in the articles, requiring a longer period than 48 hours shall have effect as
if a period of 48 hours had been specified.
A company cannot refuse proxies if filed before 48 hours before the meeting.
Hence rejection of the forms of A & B is invalid. C and D are valid proxies.

Question 4.
Decide whether the length of the notice is proper in the following cases with reference to the
provisions of the Companies Act, 2013 ?
What would be your stand in case if Sky Ltd. and Moon Ltd. are section 8 companies ?

Answer to Question 4.

As per section 101 of the Companies Act, 2013, a General Meeting of company may be called by
giving not less than 21 clear days' notice either in writing or through electronic mode. Clear days'
means exclusive of the day of the notice of service and of the day on which the meeting is held.
When a notice of General Meeting is sent by post, it shall be deemed to be served at the expiration
of 48 hours after the letter containing the same is posted - Rule 35 of the Companies (Incorporation)
Rules, 2014. Each of 21 days must be full or complete days. The day on which the notice is deemed
to be served on the member and the day of the general meeting have to be in addition to the 21
days.

In case of section 8 company, a General Meeting of company may be called by giving 14 clear days'
notice instead of 21 clear days.

Hence, if Sky Ltd., and Moon Ltd. Are section 8 companies, notice issued for General Meeting is
proper.

Question 5.
Indra Kumar, head of the legal and secretarial department of a conglomerate wants to understand
from you that which of the following resolutions shall only be passed by the postal ballot. Assist him
with your answers as per the provisions of the Companies Act, 2013 based on the information
available from the following table:
Answer to Question 5.
Company shall transact such items of business as the Central Government may, by notification,
declare to be transacted only by means of postal ballot. Provided that any item of business required
to be transacted by means of postal ballot under section 110(1)(a) of the Companies Act, 2013, may
be transacted at a general meeting by a company which is required to provide the facility to members
to vote by electronic means under section 108, in the manner provided in that section.

As per Rule 22 of the Companies (Management and Administration) Rules, 2014 in relation to
alteration of Articles of Association of the company, resolution relating to buy-back of shares and
resolution relating to election of small shareholders' director shall be transacted through postal
ballot. However, One Person Company and Companies having members up to 200 are not required
to transact any business through postal ballot.

Accordingly, Indra Kumar can be informed that:

• One Person Company and Unlisted Company are not required to pass resolution through postal
ballot.
Listed Company is required to transact the business of election of small shareholders' director
through postal ballot since the number of members are in excess of 200.

Question 6.
Infotech Ltd. was incorporated on 1.4.2018. No General Meeting of the company has been held till
30.4.2020. Discuss the provisions of the Companies Act, 2013 regarding the time limit for holding
the first annual general meeting of the Company and the power of the Registrar to grant extension
of time for the First Annual General Meeting.

Answer to Question 6.
A company must hold its AGM within a period of six months from the end of the financial year.
However, in the case of a first AGM, the company can hold the AGM in less than nine months from
the end of the first financial year. In such case AGM is already held, there is no need to hold any AGM
in the year of incorporation. The time gap between the two AGM should not exceed 15 months.

Question 7.
Bazaar Limited called its AGM in order to lay down the financial statements for Shareholders’
approval. Due to want of Quorum, the meeting was cancelled. The directors did not file the annual
returns with the Registrar. The directors were of the idea that the time for filing of returns within
60 days from the date of AGM would not apply, as AGM was cancelled. Has the company
contravened the provisions of Companies Act, 2013? If the company has contravened the
provisions of the Act, how will it be penalized?

Answer to Question 7.
According to section 92(4) of the Companies Act, 2013, every company shall file with the Registrar
a copy of the annual return, within sixty days from the date on which the annual general meeting
is held or where no annual general meeting is held in any year within sixty days from the date on
which the annual general meeting should have been held together with the statement specifying
the reasons for not holding the annual general meeting.

Sub-section (5) of Section 92 also states that if any company fails to file its annual return under sub-
section (4), before the expiry of the period specified therein, such company and its every officer
who is in default shall be liable to a penalty of ten thousand rupees and in case of continuing failure,
with further penalty of one hundred rupees for each day during which such failure continues,
subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case
of an officer who is in default.

In the instant case, the idea of the directors that since the AGM was cancelled, the provisions
requiring the company to file annual returns within 60 days from the date of AGM would not apply,
is incorrect.

In the above case, the annual general meeting of Bazaar Limited should have been held within a
period of six months, from the date of closing of the financial year but it did not take place. Thus,
the company has contravened the provisions of section 92 of the Companies Act, 2013 for not filing
the annual return and shall attract the penal provisions along with every officer of the company
who is in default as specified in Section 92(5) of the Act.

Question 8.
KMN Ltd. scheduled its Annual General Meeting to be held on 11th March, 2020 at 11:00 A.M. The
company has 900 members. On 11th March, 2020 following persons were present by 11:30 A.M.
1. P1, P2 & P3 shareholders
2. P4 representing ABC Ltd.
3. P5 representing DEF Ltd.
4. P6 & P7 as proxies of the shareholders
(i) Examine with reference to relevant provisions of the Companies Act, 2013, whether quorum was
present in the meeting.
(ii) What will be your answer if P4 representing ABC Ltd., reached in the meeting after 11:30 A.M.?
(iii) In case lack of Quorum, discuss the provisions as applicable for an adjourned meeting in terms
of date, time & place.
What happens if there is no Quorum in the Adjourned meeting?

Answer to Question 8.
According to section 103 of the Companies Act, 2013, unless the articles of the company provide
for a larger number, the quorum for the meeting of a Public Limited Company shall be 5 members
personally present, if number of members is not more than 1000.

(i) (1) P1, P2 and P3 will be counted as three members.

(2) If a company is a member of another company, it may authorize a person by resolution to act
as its representative at a meeting of the latter company, then such a person shall be deemed to be
a member present in person and counted for the purpose of quorum. Hence, P4 and P5
representing ABC Ltd. and DEF Ltd. respectively will be counted as two members.
(3) Only members present in person and not by proxy are to be counted. Hence, proxies whether
they are members or not will have to be excluded for the purposes of quorum. Thus, P6 and P7
shall not be counted in quorum.
In the light of the provision of the Act and the facts of the question, it can be concluded that the
quorum for Annual General Meeting of KMN Ltd. is 5 members personally present.
Total 5 members (P1, P2, P3, P4 and P5) were present. Hence, the requirement of quorum is
fulfilled.

(ii) The section further states that, if the required quorum is not present within half an
hour, the meeting shall stand adjourned for the next week at the same time and place or
such other time and place as decided by the Board of Directors. Since, P4 is an essential
part for meeting the quorum requirement, and he reaches after 11:30 AM (i.e., half an hour
after the starting of the meeting), the meeting will be adjourned as provided above.)

(iii) In case of lack of quorum, the meeting will be adjourned as provided in section 103. In
case of the adjourned meeting or change of day, time or place of meeting, the company
shall give not less than 3 days' notice to the members either individually or by publishing
an advertisement in the newspaper.

Where quorum is not present in the adjourned meeting also within half an hour, then the
members present shall form the quorum.

Question 9.
To remove the Managing Director, 40% members of Global Ltd. submitted requisition for holding
extra-ordinary general meeting. The company failed to call the said meeting and hence the
requisitionists held the meeting. Since the Managing Director did not allow the holding of meeting
at the registered office of the company, the said meeting was held at some other place and a
resolution for removal of the Managing Director was passed. Examine the validity of the said
meeting and resolution passed therein in the light of the Companies Act, 2013.

Answer to Question 9.
Section 100 (2) of the Companies Act, 2013 makes it obligatory on the Board of Directors to convene
an extra ordinary meeting of members if requisitioned by the stipulated number of members. 40%
of members constitute the required number and the board of directors have violated the provisions
of law by not calling the meeting.
However, section 100 (4) of the Companies Act, 2013 provides that if Board fail to proceed to call a
meeting within 21 days from the date of receipt of a valid requisition
for a date within 45 days of the receipt of the requisition, the requisitionists may themselves call a
meeting within 3 months of the date of the requisition.

Moreover, where a meeting is called by the requisitionists and the registered office is not made
available to them, it was decided in R. Chettiar v. M. Chettiar that the meeting may be held
anywhere else.
Further, resolutions properly passed at such a meeting, are binding on the company. Thus, in the
given case, since all the above-mentioned provisions are duly complied with. Hence the meeting
with the resolution removing the managing director shall be valid.

Question 10.
A General Meeting was scheduled to be held on 15th April, 2019 at 3.00 P.M. As per the notice the
members who are unable to attend a meeting in person can appoint a proxy and the proxy forms
duly filled should be sent to the company so as to reach at least 48 hours before the meeting. Mr.
X, a member of the company appoints Mr. Y as his proxy and the proxy form dated 10-04-2019 was
deposited by Mr. Y with the company at its registered Office on 11-04-2019. Similarly, another
member Mr. W also gives two separate proxies to two individuals named Mr. M and Mr. N. In the
case of Mr. M, the proxy dated 12-04-2019 was deposited with the company on the same day and
the proxy form in favour of Mr. N was deposited on 14-04-2019. All the proxies viz., Y, M and N were
present before the meeting. According to the provisions of the Companies Act, 2013, who would
be the persons allowed to represent at proxies for members X and W respectively.

Answer to Question 10.

A Proxy is an instrument in writing executed by a shareholder authorizing another person to attend
a meeting and to vote thereat on his behalf and in his absence. As per the provisions of Section 105
of the Companies Act, 2013, every shareholder who is entitled to attend and vote has a statutory
right to appoint another person as his proxy. It is not necessary that the proxy be a member of the
company. Further, any provision in the articles of association of the company requiring instrument
of proxy to be lodged with the company more than 48 hours before a meeting shall have effect as
if 48 hours had been specified therein. The members have a right to revoke the proxy’s authority
by voting himself before the proxy has voted but once the proxy has voted the member cannot
retract his authority.
Where two proxy instruments by the same shareholder are lodged of in such a manner that one is
lodged before and the other after the expiry of the date fixed for lodging proxies, the former will
be counted.
Thus, in case of member X, the proxy Y will be permitted to vote on his behalf as form for appointing
proxy was submitted within the permitted time.
However, in the case of Member W, the proxy M (and not Proxy N) will be permitted to vote as the
proxy authorizing N to vote was deposited in less than 48 hours before the meeting.
 MEPL CLASSES
COMPANY LAW
DEPOSITS
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Address – 59, JATINDRA MOHAN AVENUE , SOVABAZAR, KOLKTATA – 700005
(TIME ALLOTED – 90 MINUTES ) (MARKS ALLOTED – 50 MARKS )

Question 1.
Shubhra Chemicals Private Limited (not a start-up company) is desirous of accepting ‘deposits’ from
its members amounting to two hundred percent of aggregate of its paid-up share capital, free
reserves and securities premium account. What are the conditions it must fulfil before such
acceptance? (5 MARKS)

Answer to Question 1.
According to first proviso to Rule 3 (3), a private company may accept from its members monies
not exceeding 100% of aggregate of the paid-up share capital, free reserves and securities premium
account.

According to second proviso to Rule 3(3), the maximum limit in respect of deposits to be accepted
from members shall not apply to the classes of private company which fulfils all of the following
conditions, namely:
(a) which is not an associate or a subsidiary company of any other company;
(b)the borrowings of such a company from banks or financial institutions or any body-corporate is
less than twice of its paid-up share capital or fifty crore rupees, whichever is less; and
(c)such a company has not defaulted in the repayment of such borrowings subsisting at the time
of accepting deposits under section 73:

According to third proviso all the companies accepting deposits shall file the details of monies so
accepted with the Registrar in Form DPT-3.

In case Shubhra Chemicals Private Limited is not an associate or a subsidiary company of any other
company and its borrowings from banks, etc. is less than twice of its paid-up share capital or fifty
crore rupees, whichever is less and also it has not defaulted in the repayment of such borrowings
subsisting at the time of accepting deposits, then it can accept ‘deposits’ from its members amounting
to two hundred percent of aggregate of its paid-up share capital, free reserves and securities premium
account.
Further, it shall file the details of monies so accepted with the Registrar in Form DPT-3.

Question 2.
ABC Limited having a net worth of ₹ 120 crore wants to accept deposit from its members. The
directors of the company have approached you to advise them as to what special care has to be taken
while accepting such deposit from the members in case their company falls within the category of an
‘eligible company’. (5 MARKS)

Answer to Question 2.
According to section 76 (1) of the Act, an “eligible company” means a public company, having a net
worth of not less than one hundred crore rupees or a turnover of not less than five hundred crore
rupees and which has obtained the prior consent of the company in general meeting by means of a
special resolution and also filed the said resolution with the Registrar of Companies before making
any invitation to the public for acceptance of deposits.

However, an ‘eligible company’, which is accepting deposits within the limits specified under section
180 (1) (c), may accept deposits by means of an ordinary resolution.

According to Rule 4 (a), an ‘eligible company’ shall accept or renew any deposit from its members, if
the amount of such deposit together with the amount of deposits outstanding as on the date of
acceptance or renewal of such deposits from members does not exceed ten per cent. of the aggregate
of the paid-up share capital, free reserves and securities premium account of the company.

ABC Limited is having a net worth of 120 crore rupees. Hence, it falls in the category of ‘eligible
company’. Thus, ABC Limited has to ensure that acceptance of deposits from its members together
with the amount of deposits outstanding as on the date of acceptance or renewal of such deposits
from the members, in no case, exceeds 10% of the aggregate of the paid-up share capital, free
reserves and securities premium account of the company.

Question 3.
Comment on the following –

(i) Credit rating at the time of accepting Deposit by a company is mandatory.

(ii) No company can invite Deposit without entering into a contract for deposit insurance
(iii)Creation of security for repayment of Deposit is not mandatory for all companies while accepting
Deposit.
(iv) Trustees for Depositors can be removed by a simple majority.
(v)Only remedy for Depositors in case of default in repayment of Deposit by the company is to file a
suit. (5 MARKS)

Answer to Question 3.
(i)According to Rule 3 of the Companies (Acceptance of Deposit) Rules, 2014, every eligible company
shall obtain, at least once in a year, credit rating for deposits accepted by it and a copy of the rating
shall be sent to the Registrar of Companies along with the return of deposits in Form DPT-3.

According to Rule 2(1)(e) of the Companies (Acceptance of Deposits) Rules, 2014 “eligible company”
means a public company as referred to in sub-section (1) of section 76, having a net worth of not less
than one hundred crore rupees of a turnover of not less than five hundred crore rupees and which
has obtained the prior consent of the company in general meeting by means of a resolution and also
filed the said resolution with the Registrar of Companies before making any invitation to the Public
for acceptance of deposits. Credit rating is not mandatory for private companies and other non-
eligible public companies which accept deposit only from its members

(ii)The provision related to extent and manner of deposit insurance has been omitted according to
Companies (Acceptance of Deposits) Amendment Rules, 2018 dated 05.07.2018. Therefore, the
company can invite the deposits without entering into contract for deposit insurance

(iii)As per rule 6 of the Companies (Acceptance of Deposits) Rules, 2014: Every company referred in
Section 73(2) and eligible company as defined under Rule 2 of the Companies (Acceptance of
Deposits) Rules, 2014, accepting deposits from its members shall provide security by creating charge
on the assets of the company as referred to in Schedule III of the Act excluding its intangible assets.

(iv)As per rule 7 of the Companies (Acceptance of Deposits) Rules, 2014: Trustees for depositors can
only be removed from office before the expiry of their term with the unanimous consent of all
directors present at the meeting of Board of Directors. In case the company is required to have
independent directors, at least one independent director shall be present in such meeting of the
Board.

(v)Section 73(4) of the Companies Act, 2013 states that, where a company fails to repay the deposit
or part thereof or any interest thereon, the depositor concerned may apply to the Tribunal for an
order directing the company to pay the sum due or for any loss or damage incurred by him as a result
of such non-payment and for such other orders as the Tribunal may deem fit.

In addition to filing a suit before NCLT for repayment of deposit with accumulated interest, hundred
or more depositors or depositors holding at least five percent of the total outstanding deposit can
initiate a class action suit under section 245 of the Act before the NCLT.

Question 4.
Enumerate the amounts which when received by a company in the ordinary course of business are
not to be considered as deposits

Answer to Question 4.
According to Rule 2 (1) (c) (xii) of the Companies (Acceptance of Deposits) Rules, 2014, following
amounts if received by a company in the course of, or for the purposes of, the business of the
company, shall not be considered as deposits:

(a)any amount received as an advance for the supply of goods or provision of services accounted for
in any manner whatsoever to be appropriated within a period of three hundred and sixty-five days
from the date of acceptance of such advance:
However, in case any advance is subject matter of any legal proceedings before any court of law, the
time limit of three hundred and sixty-five days shall not apply.
(b)any amount received as advance in connection with consideration for an immovable property
under an agreement or arrangement. However, such advance is required to be adjusted against such
property in accordance with the terms of agreement or arrangement;
(c) any amount received as security deposit for the performance of the contract for supply of goods
or provision of services;
(d)any amount received as advance under long term projects for supply of capital goods except those
covered under item (b) above;
(e)any amount received as an advance towards consideration for providing future services in the
form of a warranty or maintenance contract as per written agreement or arrangement, if the period
for providing such services does not exceed the period prevalent as per common business practice or
five years, from the date of acceptance of such service whichever is less;
(f)any amount received as an advance and as allowed by any sectoral regulator or in accordance with
directions of Central or State Government;
(g)any amount received as an advance for subscription towards publication, whether in print or in
electronic to be adjusted against receipt of such publications;
However, if the amount received under items (a), (b) and (d) above becomes refundable (with or
without interest) due to the reasons that the company accepting the money does not have necessary
permission or approval, wherever required, to deal in the goods or properties or services for which
the money is taken, then the amount received shall be deemed to be a deposit under these rules.

Further, for the purposes of this sub-clause the amount shall be deemed to be deposits on the expiry
of fifteen days from the date it became due for refund.

Question 5.
State the procedure to be followed by companies for acceptance of deposits from its members
according to the Companies Act, 2013. What are the exemptions available to a private limited
company? (5 MARKS)

Answer to Question 5.

Acceptance of deposits by a company from its members: As per section 73 (2) of the Companies Act,
2013, a company may, subject to the passing of a resolution in general meeting and subject to such
rules as may be prescribed in consultation with the Reserve Bank of India, accept deposits from its
members on such terms and conditions, including the provision of security, if any, or for the
repayment of such deposits with interest, as may be agreed upon between the company and its
members, subject to the fulfilment of the following conditions, namely—

(a)Issuance of a circular to its members including therein a statement showing the financial position
of the company, the credit rating obtained, the total number of depositors and the amount due
towards deposits in respect of any previous deposits accepted by the company and such other
particulars in such form and in such manner as may be prescribed;

(b)Filing a copy of the circular along with such statement with the Registrar within 30 days before
the date of issue of the circular;

(c)Depositing, on or before the thirtieth day of April each year, such sum which shall not be less than
twenty per cent of the amount of its deposits maturing during the following financial year and kept
in a scheduled bank in a separate bank account to be called deposit repayment reserve account;

(d) Omitted
(e)Certifying that the company has not committed any default in the repayment of deposits accepted
either before or after the commencement of this Act or payment of interest on such deposits and
where a default had occurred, the company made good the default and a period of five years had
lapsed since the date of making good the default; and

(f)Providing security, if any for the due repayment of the amount of deposit or the interest thereon
including the creation of such charge on the property or assets of the company.

Every deposit accepted by a company shall be repaid with interest in accordance with the terms and
conditions of the agreement. Where a company fails to repay the deposit or part thereof or any
interest thereon, the depositor concerned may apply to the National Company Law Tribunal (NCLT)
for an order directing the company to pay the sum due or for any loss or damage incurred by him as
a result of such non-payment and for such other orders as the NCLT may deem fit.

Exemption to certain private companies:

In terms of Notification No. GSR 464 (E), dated 05-06-2015 as amended from time to time, Clauses (a)
to (c) and (e) of sub-section (2) of section 73 with respect to issue of circular, filing the copy of such
circular with the Registrar, depositing of certain amount and certification as to no default committed,
shall not apply to a private company:

(A)which accepts from its members monies not exceeding one hundred per cent of aggregate of the
paid-up share capital, free reserves and securities premium account; or

(B) which is a start-up, for five years from the date of its incorporation; or
(C) which fulfils all of the following conditions, namely:

(a) which is not an associate or a subsidiary company of any other company;

(b)if the borrowings of such a company from banks or financial institutions or any body
corporate is less than twice of its paid-up share capital or fifty crore rupees, whichever is
lower; and
(c)such a company has not defaulted in the repayment of such borrowings subsisting at
the time of accepting deposits under this section.

However, such a company [as referred to in clauses (A), (B) or (C)] shall file the details of monies
accepted to the Registrar in the specified manner (i.e. in Form DPT-3).
Question 6.
Explain the provisions for 'Appointment of Trustee for Depositors' under the Companies Act, 2013
read with the ‘Acceptance of Deposits’ Rules, 2014 (5 MARKS)

Answer to Question 6.

Appointment of Trustee for Depositors: In this respect following provisions are required to be
observed as mentioned in Rule 7 of the Companies (Acceptance of Deposits) Rules, 2014:

•One or more trustees for depositors need to be appointed by the company for creating security for
the deposits.
• A written consent shall be obtained from the trustees before their appointment.
•A statement shall appear in the circular or advertisement with reasonable prominence to the effect
that the trustees for depositors have given their consent to the company for such appointment.
•The company shall execute a deposit trust deed in Form DPT-2 at least seven days before issuing the
circular or circular in the form of advertisement.
•No person including a company that is in the business of providing trusteeship services shall be
appointed as a trustee for the depositors, if the proposed trustee:
(a) is a director, key managerial personnel or any other officer or an employee of the company or of
its holding, subsidiary or associate company or a depositor in the company;

Question 7.
What are the provisions relating to ‘Credit Rating’ which an ‘eligible company’ must follow if it wants
to raise public deposits? (5 MARKS)

Answer to Question 7.

The provisions relating to obtaining of ‘Credit Rating’ to be followed by an ‘eligible company’ are
contained in Section 76 (1) of the Companies Act, 2013 and Rule 3 (8) of the Companies (Acceptance
of Deposits) Rules, 2014 as amended from time to time. Accordingly, an ‘eligible company’ which
desires to raise public deposits shall be required to obtain the rating (including its net-worth, liquidity
and ability to pay its deposits on due date) from a recognised credit rating agency. The given rating
which ensures adequate safety shall be informed to the public at the time of invitation of deposits
from the public. Further, the rating shall be obtained every year during the tenure of deposits.

As per Rule 3 (8), copy of the credit rating which is being obtained at least once in a year shall be sent
to the Registrar of Companies along with the Return of Deposits in Form DPT-3.
Further, the credit rating shall not be below the minimum investment grade rating or other specified
credit rating for fixed deposits. It shall be obtained from any one of the approved credit rating
agencies as specified for Non- Banking Financial Companies in the Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 1998, as amended from time to time.

Question 8.
Sanjiv is a shareholder in Utsah Textiles Private Limited holding 10,000 shares of ₹ 10 each. His wife
Sneha and his three sons Aayush, Pranav and Himanshu are also shareholders in the company holding
1,000 shares each. In response to the invitation from the company inviting deposits from its members,
Sanjiv wants to deposit Rs. 1,00,000 for 36 months jointly with his wife and three sons. Whether
Utsah Textiles Private Limited can accede to the request of Sanjiv and accept deposit jointly in five
names since all the depositors are shareholders of the company. (5 MARKS)

Answer to Question 8.

Rule 3 (2) of the Companies (Acceptance of Deposits) Rules, 2014, provides that where depositors so
desire, deposits may be accepted in joint names not exceeding three.

In view of this provision, Sanjiv can deposit ₹ 1,00,000 with Utsah Textiles Private Limited jointly with
two other persons only irrespective of the fact that all the five persons are members of the company.

Question 9.
Eklavya Publishing Company Limited facing acute cash crunch wants to utilise a portion of ‘Deposit
Repayment Reserve Account’ to pay off its short-term creditors who are pressing hard for repayment
of ₹ 20,00,000. Is it justified to use funds lying in ‘Deposit Repayment Reserve Account’ in this
manner? (5 MARKS )

Answer to Question 9.

Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states that the amount deposited in
the ‘Deposit Repayment Reserve Account’ shall not be used by a company for any purpose other than
repayment of deposits.
Since there is a prohibition, Eklavya Publishing Company Limited is not permitted to utilise its ‘Deposit
Repayment Reserve Account’ to pay off its short-term creditors.
Question 10.
Discuss the following situations in the light of ‘deposit provisions’ as contained in the Companies Act,
2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time.

(i)Samit, one of the directors of Zarr Technology Private Limited, a start-up company, requested his
close friend Ritesh to lend to the company ₹ 30.00 lakh in a single tranche by way of a convertible
note repayable within a period six years from the date of its issue. Advise whether it is a deposit or
not.

(ii)Is it in order for the Diamond Housing Finance Limited to accept and renew deposits from the
public from time to time? (5 MARKS)

Answer to Question 10.

(i)In terms of Rule 2 (1) (c) (xvii) if a start-up company receives rupees twenty-five lakh or more by
way of a convertible note (convertible into equity shares or repayable within a period not exceeding
ten years from the date of issue) in a single tranche, from a person, it shall not be treated as deposit.
In the given case, Zarr Technology Private Limited, a start-up company, received ₹3.00 lakh from
Ritesh in a single tranche by way of a convertible note which is repayable within a period of six years
from the date of its issue. In view of Rule 2 (1) (c) (xvii) which requires a convertible note to be
repayable within a period of ten years from the date of its issue, the amount of ₹ 30.00 lakh shall not
be considered as deposit.

(ii)According to section 73 (1) of the Act, no company can accept or renew deposits from public unless
it follows the manner provided under Chapter V of the Act (contains provisions regarding acceptance
of deposits by companies) for acceptance or renewal of deposits from public. However, Proviso to
Section 73 (1) states that nothing in this sub-section shall apply to a banking company and non-
banking financial company as defined in the Reserve Bank of India Act, 1934 and to such other
company as the Central Government may, after consultation with the Reserve Bank of India, specify
in this behalf.
Further, Rule 1 (3) (iii) states that the Companies (Acceptance of Deposits) Rules, 2014 shall not apply
to a housing finance company registered with the National Housing Bank established under the
National Housing Bank Act, 1987.

In the given case, it is assumed that Diamond Housing Finance Limited is registered with the National
Housing Bank and therefore, the ‘Acceptance of Deposits’ Rules shall not apply to it.
Hence, Diamond Housing Finance Limited being an exempted company, can accept and renew
deposits from the public from time to time without following the prescribed manner.
 MEPL CLASSES
COMPANY LAW
CHAPTER – PRELIMINARY
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(TIME ALLOTED – 90 MINUTES) (MARKS ALLOTED – 50 MARKS )

Question 1.
Geeta Private Limited is a start-up company. Mr. Prabodh has been appointed as Accounts
Manager of Geeta Private Limited. The Board meeting for approval of accounts is to be held on
01.08.2022 and he has to prepare the financial statements for approval by the Board. Referring to
section 2(40) of the Companies Act, 2013, advise Mr. Prabodh about the statements that are
required to be prepared. (5 MARKS)

Answer to Question 1.

As per Section 2 (40) of the Companies Act 2013, Financial Statement in relation to a company,
includes –

(a) a balance sheet at the end of the financial year

(b)a profit and loss account, or in the case of a company carrying on any activity not for profit, an
income and expenditure account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity, if applicable; and
(e) any explanatory note annexed to, or forming part of, any document referred to in sub – clause
(i) to sub-clause (iv)

Exemption: As per the proviso to section 2(40), the financial statement, with respect to one person
company, small company, dormant company and private company (if such private company is a
start-up) may not include the cash flow statement.

In the instant case, Mr. Prabodh has to prepare the above financial statements except Cash Flow
Statement, since Geeta Private Limited is a startup company.
Question 2.

MNP Private Ltd. is a company registered under the Companies Act, 2013 with a paid-up share
capital of ₹ 70 lakh and turnover of ₹ 50 crores. Explain the meaning of the “Small Company” and
examine the following in accordance with the provisions of the Companies Act, 2013:

(i) Whether the MNP Private Ltd. can avail the status of small company?
(ii) What will be your answer if the turnover of the company is ₹ 25 crore (5 MARKS)

Answer to Question 2.

Determination of Status of Small Company:

•As per Sec. 2(85) of the Companies Act, 2013, Small Company means a company, other than a
public company,
(i)paid-up share capital of which does not exceed ₹ 50 lakh or such higher amount as may be
prescribed which shall not be more than ₹ 10 crore; and
(ii) turnover of which as per its last profit and loss account does not exceed ₹ 2 crore or such
higher amount as may be prescribed which shall not be more than ₹ 100 crore.
•As per Rule 2(1)(t) of the Companies (Specification of Definitions Details) Rules, 2014, the paid-up
capital and turnover of the small company shall not exceed ₹ 4 crores and ₹ 40 crores
Respectively

• Nothing in this clause shall apply to:

(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act.

Conclusion: Based on the provisions as stated above, following conclusions may be drawn:
(i)MNP Ltd. cannot avail the status of small company as turnover of the company is more than ₹ 40
Crores.
(ii)MNP Ltd. can avail the status of small company as it fulfils both criteria of paid-up capital (being
less than ₹ 4 crores) and turnover (being less than ₹ 40 crores).

Question 3.
Hastprat Ltd. is an unlisted public company, having five directors in its board which includes two
independent directors. Sankul (P) Ltd., is subsidiary company of Hastprat Ltd., actively carrying
on its business, having paid up capital of ₹ 1.5 crore with 40 members and turnover of ₹ 18 crore,
respectively and the said company is not a start-up company. In the context of aforesaid case-
scenario, please answer to the following question(s): -
Whether Sankul (P) Ltd. is mandatorily required to prepare cash flow statement for the financial
year as a part of its financial statements?

Provide your answer by analyzing Sankul (P) Ltd. into following category of companies: -
(i) One person company,
(ii) Small company,
(iii) Dormant company and
(iv) Private company, respectively.
(5 MARKS)
Answer to Question 3.

According to section 2(10) of the Companies Act, 2013,

Financial Statement in relation to a company, includes –

(i) a balance sheet as at the end of the financial year
(ii)a profit and loss account, or in the case of a company carrying on any activity not for
profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in subclause
(i) to sub-clause (iv):

Provided that the financial statement, with respect to one person company, small company,
dormant company and private company (if such private company is a start-up) may not include
the cash flow statement.

For considering the applicability of preparation cash flow statement in case of Sankul (P)
Ltd., it is required first to be analyzed that Sankul (P) Ltd. does not fall in any of the categories of
companies mentioned under proviso to section 2(10) of the Companies Act, 2013:

(i) One person company – It is given that the company is having 40 members and also its name
does not contain the words ‘OPC’, so it is not a one-person company.
(ii) Small company – A company which is a subsidiary company cannot be categorized as a small
company as per proviso to section 2(85) even though its paid up capital and turnover are within
the prescribed limits and accordingly, as Sankul (P) Ltd. is a subsidiary company of Hastprat Ltd.,
it cannot be considered as small company also.

(iii) Dormant company – It is given that the company is actively carrying on its business,
so, it cannot be also categorized as a dormant company based upon the facts given.

(iv) Private company (which is a start-up) – It is given that Sankul (P) Ltd. is not a startup company
and also, as per proviso to section 2(71) of the Act, a company which is a subsidiary of a company,
not being a private company, shall be deemed to be public company for the purposes of this Act
even where such subsidiary company continues to be a private company in its articles.

So, Sankul (P) Ltd. shall be deemed to be a public company as it is subsidiary of Hastprat Ltd., an
unlisted public company and so it will not fall into this category of exemption as well.

Thus, it can be concluded that Sankul (P) Ltd. is mandatorily required to prepare cash flow
statement for the financial year as a part of its financial statements as it does not fall in any of
the categories of companies mentioned under proviso to section 2(10) of the Companies Act,
2013.

Question 4.
Gupta Limited was registered as a public company. There are 230 members in the company as
noted below:
A. Directors and their relatives 50
B. Employees 15
C. Ex- employees (shares were allotted when they were employees) 10
D. 5 couples jointly holding shares in the name of husband and wife 10
(5 *2 )
E. Others 145

The Board of Directors of the company propose to convert it into a private company. Also, advise
whether reduction in the number of members is necessary. (5 MARKS)

Answer to Question 4.
According to section 2(68) of the Companies Act, 2013, “Private Company “means a company
having a minimum paid -up share capital as may be prescribed, and which by its articles, except
in case of One Person Company, limits the number of its members to two hundred.

However, where two or more persons hold one or more shares in a company jointly, they shall,
for the purposes of this clause, be treated as a single member –

It is further provided that –

(a) persons who are in the employment of the company; and

(b)persons who, having been formerly in the employment of the company, were members of
the company while in that employment and have continued to be members after the
employment ceased,

Shall not be included in the number of members.

In this case, Gupta Limited may be converted into a private company only if the total members
of the company are limited to 200. Total number of members –

Directors and their relatives 50

5 couples (5*1) 5
Others 145
Total 200

Question 5.

Irah Ltd. is a company registered in Singapore. The company has no place of business established
in India, but it is doing online business through data interchange in India (the main sever being
located in Singapore itself). Explain with reference to relevant provisions of the Companies Act,
2013 whether Irah Ltd. will be treated as Foreign Company. (5 MARKS)

Answer to Question 5.

According to section 2(42) of the Companies Act, 2013, foreign company means any company
or body corporate incorporated outside India which, -
a)has a place of business in India whether by itself or through an agent, physically or through
electronic mode; and
b) conducts any business activity in India in any other manner.

As per the Rule given in the Companies (Specification of Definitions Details) Rules, 2014, the
term “electronic mode”, means carrying out electronically based, whether main server is
installed in India or not, including, but not limited to-
(i)Business to business and business to consumer transactions, data interchange and other
digital supply transactions;
(ii)Offering to accept deposits or inviting deposits or accepting deposits or subscriptions in
securities, in India or from citizens of India;
(iii)Financial settlements, web-based marketing, advisory and transactional services, database
services and products, supply chain management;
(iv) Online services such as telemarketing, telecommuting, telemedicine, education and
information research; and
(v)All related data communication services, whether conducted by e-mail, mobile devices, social
media, cloud computing, document management, voice or data transmission or otherwise;

In the given question, Irah Ltd. will be treated as a foreign company within the meaning of
section 2(42) of the Companies Act, 2013, since it is doing online business through data
interchange in India even though the company has no place of business established in India.

Question 6.
The paid-up share capital of Saras Private Limited is ₹1 crore consisting of 8 lakh equity shares
of ₹10 each and 2 lakh cumulative preference shares of ₹10 each. Jeevan Private Limited and
Sudhir Private Limited are holding 2 lakh equity shares and 2,50,000 equity shares respectively
in Saras Private Limited. Jeevan Private Limited and Sudhir Private Limited are the subsidiaries
of Piyush Private Limited. With reference to the provisions of Companies Act, 2013 examine
whether Saras Private Limited is a subsidiary of Piyush Private Limited? Would your answer be
different if Piyush Private Limited has 5 out of 9 Directors on the Board of Saras Private Limited?
(5 MARKS)
Answer to Question 6.

Relevant Provisions
In terms of section 2 (87) of the Companies Act 2013 "subsidiary company" or "subsidiary", in
relation to any other company (that is to say the holding company), means a company in which
the holding company:
(i) controls the composition of the Board of Directors; or
(ii)exercises or controls more than one-half of the total voting power either at its own or
together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed shall not have
layers of subsidiaries beyond such numbers as may be prescribed.

Explanation. —For the purposes of this clause, —

a)a company shall be deemed to be a subsidiary company of the holding company even if the
control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the
holding company;
b)the composition of a company's Board of Directors shall be deemed to be controlled by
another company if that other company by exercise of some power exercisable by it at its
discretion can appoint or remove all or a majority of the directors.

Conclusion
In the present case, Jeevan Pvt. Ltd. and Sudhir Pvt. Ltd. together hold less than one half of the
total share capital. Hence, Piyush Private Ltd. (holding of Jeevan Pvt. Ltd. and Sudhir Pvt) will not
be a holding company of Saras Pvt. Ltd.
However, if Piyush Pvt. Ltd. has 8 out of 9 Directors on the Board of Saras Pvt. Ltd. i.e. controls
the composition of the Board of Directors; it (Piyush Pvt. Ltd.) will be treated as the holding
company of Saras Pvt. Ltd.

Question 7 (2 MARKS)

It can be a possibility that a company may or may not have a

(a) Common Seal (c) President

(b) Director (d) Employees

Question 8. (2 MARKS)
Persons acting only in a professional capacity, e.g., the solicitor, banker, accountant, etc., are not
regarded as promoter

(a) True (c) Partly True

(b) False (d) Partly False
Question 9. (2 MARKS)
The Companies Act 2013 defines the term promoter under Section 2(69) which means a person
who

(a)Has been named as such in a prospectus or is identified by the company in the annual return
referred to in Section 92.
(b) Has not been named such in a prospectus or is identified by the company.
(c)Has been named as such in a prospectus or is identified by the company in the annual returns
suffered to inspection 91.
(d) Is not identified by the company.

Question 10. (2 MARKS)

Person who initiates promotion of a company are known as –

(a) Directors (c) Contractors

(b) Promoters (d) Members

Question 11. (2 MARKS)

A company is not a separate legal entity with perpetual succession for lawful purpose

(a) True (c) Partly true

(b) False (d) None of the above

Question 12.
Mr. Abhi is a Chartered Accountant and MBA by profession, has been appointed as an Executive
Director on the Board of XYZ Limited. His job profile includes advising the Board of Directors of
the company on various compliance matters, strategies, business plans and risk matters relating
to the company. Keeping in view of the above position whether Mr. Abhi can be classified as the
Promoter of XYZ Limited?
Please examine the same under provisions of the Companies Act, 2013. (5 MARKS)

Answer to Question 12.

According to Section 2(69) of the Companies Act, 2013, Promoter means a person:
(a)Who has been named as such in a prospectus or is identified by the company in the annual
return; or

(b)Who has control over the affairs, directly or indirectly whether as a shareholder, director or
otherwise or

(c)In accordance with those advice, directions or instructions the Board of Directors of the
company is accustomed to act.
Provided that nothing in sub clause (c) shall apply to a person who is acting merely in a
professional capacity.

As the job profile of Mr Abhi is only limited to advise the Board of Directors on various
compliance matters, strategies, business plans and risk matters relating to business of the
company and that too only in a professional capacity, he will not be classified as a Promoter of
XYZ Limited.

Question 13.
M Ltd. (Registered in India), a wholly owned subsidiary of N ltd decided to follow different
financial year for consolidation of its accounts outside India. State the procedure to be followed
in this regard. (5 MARKS)

Answer to Question 13.

Where a company or body corporate, which is a holding company or a subsidiary or associate
company of a company incorporated outside India and is required to follow a different financial
year for consolidation of its accounts outside India, the Central Government may, on an
application made by that company or body corporate in such form and manner as may be
prescribed, allow any period as its financial year, whether or not that period is a year.

Any application pending before the Tribunal as on the date of commencement of the Companies
(Amendment) Act, 2019, shall be disposed of by the Tribunal in accordance with the provisions
applicable to it before such commencement.
Also, a company or body corporate, existing on the commencement of this Act, shall, within a
period of two years from such commencement, align its financial year as per the provisions of
this clause.
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ANSWER THE BELOW QUESTION

Question 1)
What does the term Financial Statements include in relation to a company under the Companies
Act, 2013? Which companies need not prepare a cash flow statement?
Question 2)
Teresa Ltd. is a company registered in New York (U.S.A.). The company has no place of business
established in India, but it is doing online business through data interchange in India. Explain
with reference to relevant provisions of the Companies Act, 2013 whether Teresa Ltd. will be
treated as Foreign Company
Question 3)
SKP Limited (Registered in India), a wholly owned subsidiary company of Herry Limited decided
to follow different financial year for consolidation of its accounts outside India. State the
procedure to be followed in this regard
Question 4)
The directors of Smart Computers limited borrowed a sum of money from Mr. Tridev. The
company's articles provided that the directors may borrow on bonds such sums as may, from
time to time, be authorized by resolution passed at a general meeting of the company. The
shareholders claimed that there had been no such resolution authorizing the loan, and
therefore, it was taken without their authority and the company is not bound to repay the loan
to Tridev. In the light of the contention of shareholders, decide whether the company is bound
to pay the loan.
Question 5)
a) The role of doctrine of 'Indoor management' is opposed to that of the role of 'Constructive
notice'. Comment on this statement with reference to the Companies Act, 2013.
b) The persons (not being members) dealing with the company are always protected by the
doctrine of Indoor management. Explain. Also, explain when doctrine of Constructive Notice will
apply.
Question 6)
Alfa school started imparting education on 1.4.2010, with the sole objective of providing
education to children of weaker society either free of cost or at a very nominal fee depending
upon the financial condition of their parents. However, on 30th March 2018, it came to the
knowledge of the Central Government that the said school was operating by violating the objects
of its objective clause due to which it was granted the status of a section 8 company under the
Companies Act, 2013. Describe what powers can be exercised by the Central Government against
the Alfa School, in such a case?
Question 7)
a) Prakhar Ltd. intends to raise share capital by issuing Equity Shares in different stages over
a certain period of time. However, the company does not wish to issue prospectus each and
every time of issue of shares. Considering the provisions of the Companies Act, 2013, discuss
what formalities Prakhar Ltd. should follow to avoid repeated issuance of prospectus?
OR
b) What is a Shelf-Prospectus? State the important provisions relating to the issuance of
ShelfProspectus under the provisions of Companies Act,2013.
Question 8)
What is meant by ―Abridged Prospectus‖? Under what circumstances an abridged prospectus
need not accompany the detailed information regarding prospectus along with the application
form? What are the penalties in case of default in complying with the provisions related to issue
of abridged prospectus?
Question 9)
With a view to issue shares to the general public a prospectus containing some false information
was issued by a company. Mr. X received copy of the prospectus from the company, but did not
apply for allotment of any shares. The allotment of shares to the general public was completed
by the company within the stipulated period. A few months later, Mr. X bought 2000 shares
through the stock exchange at a higher price which later on fell sharply. X sold these shares at a
heavy loss. Mr. X claims damages from the company for the loss suffered on the ground the
prospectus issued by the company contained a false statement. Referring to the provisions of
the Companies Act, 2013 examine whether X’s claim for damages is justified.
Question 10)
Enumerate the amount which when received by a company in the ordinary course of business
are not to be considered as deposits.
Question 11)
Vrinda Ltd. Is a company manufacturing orange and strawberry candies for kids. Now, the
company wants to expand its business and start the manufacturing of 10 more types of candies.
The company had raised ₹ 1 crore through the issue of non-covert debentures not constituting a
change on the assets of the company and listed on a recognised stock exchange as per the
applicable regulation made by the securities and exchange board of India. Advise, whether the
above amount of ₹ 1 crore will be considered as deposits?
Question 12)
Discuss the following situation in the light of deposit provision as contained in the Companies
Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to
time.
i) Samit, one of the directions of Zarr Technology Private Limited, a start-up company,
requested his close friend Ritesh to lend to the company ₹ 30.00 lacs in a single tranche by way
of a convertible note repayable within a period six years from the date of its issue. Advise
whether it is a deposit or not.
ii) Polestar Traders Limited received a loan of ₹ 30.00 Lacs from Rachna who is one of its
directors. Advise whether it is deposit or not.
iii) City Bakers Limited failed to repay deposits of ₹ 50.00 crores and interest due thereon
even after the extended time granted by the Tribunal. Is the company or Swati, its officer in
default, liable to any penalty?
iv) Shringaar Readymade Garments Limited wants to accept deposits of ₹ 50.00 lacs from its
members for a tenure which is less than six months. Is it a possibility?
v) Is it in order for the Diamond Housing Finance Limited to accept and renew deposits from
the public from time to time?
Question 13)
Define the term ‘charge’ and also explain what is the punishment for default with respect to
registration of charge as per the provision of the Companies Act, 2013.
Question 14)
Renuka Soaps and Detergents Limited realised on 2nd May, 2019 that particulars of charges
created on 12th March, 2019 in favour of a bank were not registered with the Registrar of
Companies. What procedure should the company follow to get the charge registered? Would the
procedure be different if the company realised its mistake of not registering the charge on the
7th June, 2019 instead of 2nd May, 2019? Explain with reference to the relevant provisions of the
Companies Act, 2013.
Question 15)
Mr. Antriksh entered into an agreement for purchasing a commercial property in Delhi belonging
to NRT Ltd. At time of registration. Mr Antriksh comes to know that the title deed of the company
is not free and the company express its inability to get the title deed transferred in the name of
Mr. Antriksh saying that he ought to have had the knowledge of the charge created on the
property of the Antriksh saying that he ought to have had the knowledge of charge created on
the property of the company. Explain with the help of ‘ Notice of a charge ‘ , whether the
contention of NRT LTD. Is correct?
Question 16)
a) Nutty Buddy Limited is manufacturing premium quality milk based ice cream in two
flavours – first chocolate and second butter scotch. The company called its Annual General
Meeting (AGM) in order to lay down the financial statement for shareholder’s approval.
However, due to want of quorum, the meeting was cancelled.
Also, the Directors of the company did not file the Annual Return with the Registrar. The directors
were of the idea that the time for filing of return within 60 days from the date of AGM would
not apply, as AGM was cancelled. Has the company contravened the provision of Companies Act,
2013? If the company has contravened the provision of the Act, how will it be penalized?
OR
b) Bazaar Limited called its AGM in order to lay down the financial statements for
shareholder’s approval. Due to want of Quorum, the meeting was cancelled. The directors did
not file the annual returns with the Registrar. The directors were of the idea that the time for
filing of return withing 60 days from the date of AGM would not apply, as AGM was cancelled.
Has the company contravened the provisions of Companies Act, 2013? If the company has
contravened the provisions of the Act, how will it be penalized?
OR
c) Due to heavy rains and floods Chennai Handloom Limited was unable to convene annual
general meeting upto 30th September, 2017. The company had not filed the annual financial
statements, or the annual return as the directors of the company are of the view that since the
annual general meeting did not take place, the period of 660 days for filing of annual return is
not applicable and thus, there is no contravention of Section 92 of the Companies Act, 2013.
Discuss whether the contention of director is correct.
Question 17)
As per the provision of the Companies Act, 2013, every company is required to file with the
Registrar of Companies, the Annual Return as prescribed in section 92, in Form MGT 7. Explain
the particular required to be contained in it.
Question 18)
Shambhu Limited was incorporated on 1/04/2020. The company did not have much to report to
its shareholders, so no general meeting of the company has been held till 30.04.2022. The
company has recently appointed a new accountant. The new accountant has pointed out that
the company required to hold the Annual General Meeting. The company has approached you a
senior Chartered Accountant. Please advise the company regarding the time limit for holding the
first annual general meeting of the Company and the power of the Registrar to grant extension
of time for the First Annual General Meeting.
Question 19)
Rijwan Ltd. Is in business of the garment manufacturing and has its registered office at 123. N
Tower, Commercial Beta Complex, Biwandi, Rajasthan. The company has called its 6th Annual
General Meeting at 3 PM on 22nd August, 2019 at Ansal Plaza, Biwandi. Some of the members of
the company have opposed to calling of the meeting at Ansal Plaza. The company has
approached you to advice them in this regards.
Suppose, Rijwan Ltd. Is an unlisted company and wants to call their 6 th AGM at Jaipur, will your
answer differ.
Question 20)
Examine the validity of the Following statements in respect of Annual General Meeting (AGM)
as per the provisions of the Companies Act, 2013.
i) The first AGM of a company shall be held within a period of six months from the date of
closing of the first financial year.
ii) The registrar may, for any special reason, extend the time within which the first AGM shall
be held.
iii) Subsequent (second onwards) AGMs should be held within 6 months from closing od the
financial year. iv) There shall be a maximum interval of 15 months between two AGMs.
 MCQ QUESTIONS CMA INTER LAW
Factories Act
Fill in the blanks
1. Safety Officer is required to be appointed where more than workers are ordinarily
employed.
2. If more than workers are employed in a factory, a canteen or canteens shall be provided
and maintained by the occupier for the use of the workers.
3. No adult worker shall be allowed to work in a factory for more than hours in any day.
4. In respect of overtime work, the employee is entitled to wages at his ordinary the rate of
rate of wages.
5. No woman employee shall be required to work in any factory except between ------------ and
-----------
6. A child who has completed his 14th year of an adolescent shall not be allowed to work in
any factory unless granted in the custody of the manager of the factory.
7. shall be provided and maintained for the use of children not under the age of 6
years if more than women workers are employed.
8. Occupier is the person who has over the affairs of the factory.
9. The total number of leave that may be carried forward shall not exceed days in the case of

10.
adult or in the case of child worker.

T E
shall examine an application for an establishment of a factory involving hazardous
process.

T I TU
Choose the correct answer
1. Age of adolescent worker is- I N S
A- 10
B- 14 SJ C
C- 18
D- 21
2. Certificate of fitness to be young worker is to be granted by-
A- Occupier of the factory
B- Inspector of the factory;
C- Certifying surgeon
D- None of the above
3. White wash or color wash should be carried out atleast once in every period of-
A- 14 months;
B- 24 months;
C- 48 months;
D- 60 months
4. Where more than……….workers are employed provision shall be made for cool drinking
water during hot weather.
A- 100
B- 250

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 C- 500
D- 1000
5. Shelter rooms with suitable lunch rooms are to be provided, if more than……… workers are
employed.
A- 100
B- 250
C- 500
D- 1000
E- none of the above.
6. No female child shall be allowed to work in any factory except between-
A- 8 A.M., and 7 P.M.,;
B- 6 P.M., and 6 A.M.,
C- 6 A.M., and 7 P.M.,
D- 10 P.M. and 5 A.M.,
7. Compensatory holidays are to be availed within month.
a. 1 month (b) 2 months (c) 6 months (d) 9 months
8. Which one of the following amounts to safety measure?
T E
TU
A- Artificial humidification;
B- Ventilation;

S T I
C- Fencing of factory;

C I
D- First aid appliances.N
SJ
9. Identify from the following which is the power of Inspector of Factory.
A- Enter into any place ofa factory;
B- Make inquiry into any accident;
C- Seize or take copies of any document;
D- All the above.
10. Weekly holiday shall be
A- First day of the week;
B- Last day of the week;
C- Third day of the week;
D- None of the above.

State whether TRUE or FALSE

1. The Occupier is bound to inform the changes taken place to the authorities by means of a
notice.
2. Welfare Officer is required to be appointed if there are 100 or more workers are employed
in a factory.
3. Double employment is allowed in factories act.
4. A dismissed employee is entitled to the wages in lieu of the quantum of leave at the time of
his dismissal.
5. Government cannot inquire to the standards of health and safety observed in a factory.

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 6. A woman employee may be allowed to work between 6 p.m. and 6 a.m.
7. If the inspector is obstructed in a factory penalty is imposed on the concerned person.
8. Leave may be availed on oral request to the Supervisor.
9. Strike period is not counted as duty for the purposes of computation of the period of 240
days meant for calculation of leave entitlement.
10. Register of adult workers is to be maintained in a factory

Answers:
Fill in the blanks
1. 1000
2. 250
3. 9
4. Twice
5. 5 a.m. and 5 p.m.
6. A certificate of fitness
7. Crèche, 30
8. Ultimate control9.
9. 30, 40
10. Site Appraisal Committee
Choose the correct answer
1. B
T E
TU
2. C
3.
4.
A

S T I
5.
B
E
C I N
SJ
6. A
7. B
8. C
9. D
10. C
State whether TRUE or FALSE
1. TRUE
2. FALSE
3. FALSE
4. TRUE
5. FALSE
6. FALSE
7. TRUE
8. FALSE
9. TRUE
10. TRUE

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 Gratuity Act
Fill in the blanks
1. The gratuity is payable to an employee after he has rendered continuous service for not less
than……………. years.
2. The maximum amount of gratuity payable is……………. .
3. The employer shall arrange to pay gratuity within………… from the date of its becoming
payable to the eligible person.
4. Appeal, against the order of the Controlling Authority may be filed within………… days from
the date of receipt of the order.
5. If the gratuity is not paid in time the employer is liable to pay………. interest at per annum.
6. Nomination is to be made by an employee in Form……………… .
7. Gratuity is calculated for every completed year of service or part in excess of six months at
the rate of……… wages last drawn.
8. Section 4A may exempt the employer employing…………. or more persons who establishes an
approved gratuity fund.
9. An employee, within-------- of acquiring a family shall submit a fresh nomination.
10. If there is a dispute as to the amount of gratuity payable to the employee, the employer
shall deposit the gratuity with the ---------

Choose the correct answer

1. Which does not amount to retirement?
T E
A- Retrenchment;

T I TU
B- Resignation;
C- Dismissal;
I N S
SJ
D- Superannuation.
C
2. Gratuity is payable to an employee-
A- On his superannuation;
B- Retirement;
C- Retrenchment;
D- In all the above cases.
3. The gratuity is payable to an employee shall not exceed-
A- 12 months pay;
B- 16 months pay;
C- 20 months pay;
D- 24 months pay.
4. The employer shall display an abstract of the Act and the Rules in Form No-
A- U
B- H
C- O
D- N
5. If sufficient cause is shown the appropriate Government may condone the delay in filing
appeal against the order of the Controlling Authority, for-

4
 A- 30 days;
B- 60 days;
C- 90 days;
D- No time limit.
6. Nomination is to be made by an employee-
A- Immediately on his appointment;
B- After completion of one year service;
C- After he is made permanent;
D- None of the above.
7. Which one of the following is to be included in the definition of ‘wage’?
A- Dearness allowance;
B- Overtime allowance;
C- Commission;
D- House rent allowance.
8. If an employer intends to close the business he is to send notice to the Controlling Authority
within before the intended closure.
A- 10 days;
T E
TU
B- 30 days;
C- 60 days;

S T I
D- 90 days.
9. Nomination is to be filed in
C I N
SJ
A- Single form
B- Duplicate
C- Triplicate
D- Quadruplicate.
10. Which will not amount to service of notice under the rule?
A- Personal service;
B- By registered post;
C- By courier.

State whether TRUE or FALSE

1. A person holding a post under the Central Government is an employee under the Payment
of Gratuity act.
2. The father-in-law of a female employee will come under the term ‘family’.
3. The maternity leave granted for 90 days will be included for the calculation of continuous
service.
4. An employee is not required to obtain insurance for liability for payment of gratuity.
5. An employee may give nomination to his friend to receive gratuity after his marriage.
6. No gratuity payable shall be liable to attachment in execution of any decree of court.
7. The Controlling Authority may pay the gratuity to a minor, a nominee to receive the gratuity
after the death of an employee.

5
 8. For the purpose of calculation of gratuity 26 days are taken as a month.
9. The employer can make agreement with the employer to pay gratuity below the amount
fixed by the Act.
10. Gratuity is a lump sum payable on consideration of the past services rendered by the
employee.

Answers:
Fill in the blanks
1. 5
2. 20 lakhs;
3. 30 days;
4. 60 days;
5. 10%;
6. F;
7. 15 days;
8. 500;
9. 90 days;
10. Controlling Authority.
Choose the correct answer
1. D
2. D
T E
3. C

T I TU
4.
5.
A
B
I N S
6.
7.
B
A SJ C
8. C
9. B
10. C
State whether TRUE or FALSE
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
6. TRUE
7. FALSE
8. TRUE
9. FALSE
10. TRUE

6
 Employees Provident Fund
Fill in the blanks
1. EPF Act is applicable to every establishment employing……………. or more persons.
2. The contribution or employer to the Fund is……. of basic wages, dearness allowance and
retaining allowance, if any.
3. The Pension fund is administered by the ……………..
4. The Employee’s Deposit Linked Insurance Scheme, 1976 came into effect from……….. .
5. The contribution to insurance fund is to be remitted by the employer within…….. days of the
close of the month.
6. The wage limit contribution under the scheme has been fixed at`15,000/- with effect from
.
7. The Central Government may give exemption to any establishment considering its .
8. Contribution to EPF is payable by………… And………………….. .
9. …………. is not covered under the EPF Act.
10. Section 5AA provides for the appointment of…… by the Central Government to assistant the
Central Board in the performance of its functions.
Choose the correct answer
1. Which one of the following will not include in the definition of basic wages?
A- Dearness allowance;
B- Overtime;
T E
C- Cash value for consideration;

T I TU
D- All the above.

I N S
2. The contribution of employer to insurance fund is-
A- 1%
B- 10%
SJ C
C- 12%
D- None of the above.
3. Contribution of 10% to PF is applicable to-
A- Any establishment in which less than 20 employees are employed;
B- Any establishment declared as sick industrial company;
C- Jute company;
D- All of the above.
4. The minimum administrative charge payable by the employer to the fund is-
A- 75
B- 500/-
C- 1000
D- None of the above
5. The maximum penalty recoverable from the employer who makes the default in payment
of any contribution to the fund is-
A- 5%
B- 10%
C- 15%

7
 D- 25%
6. Withdrawal from PF may be allowed for-
A- Marriage of the employer;
B- Post matriculation education of children;
C- For the purchase of a dwelling place;
D- For illness in certain cases.
7. The Employees Pension Scheme provides for-
A- Superannuation pension;
B- Orphanage pension;
C- Both (a) and (b);
D- None of (a) or (b).
8. Contribution of the employer to employees’ pension scheme is-
A- 8.33%
B- 10%
C- 12%
D- None of the above.

T
9. The following cannot be nominated for the purposes of EPF Act-
E
A- Wife;

T I TU
B- Sons of a deceased sons who have attained majority;
C- Father in law;
I N S
SJ C
D- Unmarried daughter.
10. While filing appeal to EPF Appellate Tribunal the employer has to deposit of the amount
due from him.
A- 25%
B- 50%
C- 75%
D- None of the above.

State whether TRUE or FALSE

1. Once the EPF Act is covered to any establishment it shall continue to apply notwithstanding
the number of persons employed shall at any time false below 20.
2. The wage limit `15,000/- is applicable for the contribution to the Fund in respect of
international workers.
3. The employer cannot reduce wages of the employee to avoid his liability under the Act.
4. If an employee is transferred from one employment to another, the balance at his credit in
his PF Account cannot be transferred to the new establishment.
5. The Central Government may add to amend or vary either prospectively or retrospectively,
the scheme, Pension Scheme or the Insurance Scheme.
6. Where the pay of an employee exceeds `15,000/- the contribution to insurance scheme is
restricted to `15,000/-.
7. Contribution to pension scheme is recoverable when the employee crosses 58 years of age.
8. The employer shall in the first instance pay the contribution payable by himself and also on

8
 behalf of the member employed by him through a contractor.
9. The PF scheme is applicable to the tea factories in the State of Assam.
10. The EPF Act is applicable to any establishment registered under the Co-Operative Societies
Act, 1912.
Answers:
Fill in the blanks
1. 20;
2. 10%;
3. Central Board;
4. 01.09.1976;
5. 15;
6. 01.09.2014;
7. Financial position;
8. Employer, employee;
9. Apprentice;
10. Executive Committee.
Choose the correct answer
T E
TU
1. D;
2. A

S T I
3.
4.
D
B
C I N
5.
6.
D
C
SJ
7. C;
8. A
9. B
10. C
State whether TRUE or FALSE
1. TRUE;
2. FLASE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. TRUE;
9. FALSE;
10. FALSE.

9
 Employees State Insurance Act
Fill in the blanks
1. The two types of permanent establishment is and .
2. The term of the members of Medical Benefit Council shall be .
3. The rate of contribution is and of worker’s wages by employees and employers
respectively.
4. The amount recoverable under this Act may be recovered as if it .
5. Standing Committee shall consist of members of the Corporation;
6. is the ex-officio member of Medical Benefit Council;
7. A member of the Corporation, the Standing Committee or the Medical Benefit Council may
resign his office by notice in writing to .
8. The payment towards the expenditure on the funeral of the deceased insured person is
payable to the .
9. Confinement is the labor resulting in the issue of living child or labor after of
pregnancy resulting in the issue of child, whether alive or dead.
10. Factory is defined as any premises including the precincts thereof whereon or more
persons are employed on any day of the preceding .
Choose the correct answer
1. The contribution shall be paid in a bank within days of the last day of the calendar month
in which the contribution fall due for any wage period.

T E
TU
A- 7
B- 14
C- 21
S T I
D- 30
C I N
SJ
2. An appeal shall lie to High Court from the orders of ESI within days from the date of order
of the ESI Court.
A- 30
B- 60
C- 90
D- None of the above.
3. A member of the Corporation shall cease to be a member if he fails to attend consecutive
meeting.
A- 3
B- 5
C- 7
D- None of the above.
4. ESI Fund consists of-
A- Contribution;
B- Grants from governments;
C- Donations;
D- All the above.
5. The Corporation may with the approval of establish and maintain in a State, hospitals
dispensaries etc.,

10
 A- Central Government;
B- State Government;
C- Local Authority;
D- None of the above.
6. Who will not the following be considered as an employee?
A- Canteen workers;
B- Casual workers;
C- Partners;
D- Part time employee.
7. Who, among the following, is not the Principal Employer?
A- Occupier of the factory;
B- Owner of the factory;
C- Legal representative of the owner;
D- Legal representative of the contractor.
8. Seasonal factory is the one which is engaged for a period not exceeding in a year.
A- 7 months;
B- 6 months;
T E
C- 3 months;

T I TU
D- None of the above.

I N S
9. Which, among the following, will not be included in the definition of ‘wages’?

SJ C
A- Payment made on authorized leave;
B- Travelling allowance;
C- Payment made on lock out;
D- Payment made for lay off.
10. ESI Corporation is a-
A- Partnership firm;
B- Limited Liability Partnership;
C- Body Corporate;
D- Hindu Undivided Family.

State whether TRUE or FALSE

1. The members of Indian Naval, military or air force is coming under the definition of
‘employee’ under ESI Act.
2. Wage does not include any gratuity payable on discharge.
3. Every employee is to register himself under the provisions of ESI Act.
4. An employee insured under the ESI Act can also claim compensation under the Workmen
Compensation Act.
5. The benefits of medical benefits under this Act are assignable.
6. Civil Court has no jurisdiction to decide or deal with any dispute or to dispute on any liability
to be decided by a medical board or tribunal or ESI Court.
7. Attachment of bank account of the defaulter can be undertaken for recovery of dues.

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 8. The Central Government cannot supersede the ESI Corporation.
9. Employees represent the Station Commission of ESI Corporation.
10. There shall be one woman among the members representing the medical profession in the
Medical Benefit Council.

Answers:
Fill in the blanks
1. Permanent partial disablement, permanent total disablement;
2. 4 years;
3. 3.25%, 0.75%;
4. Were an arrear of land revenue;
5. Three;
6. Medical Commissioner of the Corporation;
7. Central Government;
8. Eldest surviving member of the family;
9. 26 weeks;
10. 10 months, 12 months

T E
TU
Choose the correct answer
1.
2.
C;
B;
S T I
3. A;

C I N
SJ
4. D;
5. B;
6. C;
7. D;
8. A;
9. B;
10. C.
State whether TRUE or FALSE
1. FALSE;
2. TRUE;
3. TRUE;
4. FALSE;
5. FALSE;
6. TRUE;
7. TRUE;
8. FALSE;
9. TRUE;
10. TRUE.

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 Payment of Bonus Act
Fill in the blanks
1. The two types of establishments under the Payment of Bonus Act are ,
2. To get eligible for bonus an employee is to work in that accounting year.
3. Wage limit for getting bonus is ` .
4. The minimum bonus payable is at of the salary or wage earned by the employee
during the accounting year or ` whichever is higher.
5. The time limit for bonus payment by issue of an award passed on the dispute regarding the
payment of bonus is .
6. Annual return is to be filed in Form No. .
7. Any dispute arises between an employer and his employee in regard to the payment of
bonus shall be deemed to be an .
8. Bonus is an to increase the production.
9. Bonus is neithernor deferred payment of wages.
10. The establishment in public sector is an establishment owned, controlled or managed by .
Choose the correct answer
1. Which one of the following is not applicable to the Bonus Act?
A- Every factory;
B- Every establishment in which 20 or more persons are employed on any day
during an accounting year;
T E
I
C- Life Insurance Corporation of India.
2. Who is not eligible to get bonus?
T TU
I
A- A temporary workman;
N S
SJ C
B- A dismissed employee;
C- A piece rated employee;
D- A retrenched employee.
3. The maximum bonus payable during an accounting year is of the salary.
A- 8.33%
B- 12%
C- 15%
D- 20%
4. If an employee draws pay of `15,000/- what is the maximum bonus payable to him?
A- 10,000/-
B- 15,000/-
C- 21,000/-
D- None of the above
5. The time limit for making bonus payment is-
A- Within a period of one month from the close of the accounting year;
B- Within a period of three months from the close of the accounting year;
C- Within a period of six months from the close of the accounting year;
D- Within a period of eight months from the close of the accounting year.

13
 6. Annual return shall be filed by every employer on or before-
A- 31st March;
B- 30th September;
C- 1st February;
D- 30th June.
7. Which of the following is included in the definition of ‘salary’ or ‘wage’?
A- Commission;
B- Dearness allowance;
C- Retrenchment compensation;
D- Value of any house accommodation.
8. Which one of the following is deductible from the gross profit?
A- Depreciation;
B- Development rebate;
C- Any direct tax payable;
D- All of the above.
9. % of the paid up equity share capital as at the commencement of the accounting

T E
year is allowed deduction from the gross profit in respect of banking companies.

TU
A- 7.5%
B- 6%

S T I
C- 8.5%
D- 5%
C I N
year is allowed forSJ
10. 6% of the reserves shown in the balance sheet as at the commencement of the accounting
company.
A- Foreign company;
B- Banking company;
C- Company other than banking company;
D- Corporation.

State whether TRUE or FALSE

1. Customary bonus is covered under the Payment of Bonus Act, 1965.
2. Bonus Act is not applicable to Government Departments.
3. A dismissed employee, reinstated with back wages is entitled to bonus.
4. Where an employee has not worked for all the working days he is entitled to full bonus.
5. Where in any accounting year, an employee is found guilty of misconduct causing financial
loss to the employer, then the employer may deduct the amount of loss from the bonus
payable to the employee.
6. During the proceeding before any arbitrator or Tribunal it is required to prove the accuracy
of accounts of the establishment.
7. No court shall take cognizance or any offence punishable unless a complaint is made by the
authority by appropriate Government.
8. Where an establishment is newly set up the bonus shall be payable only in respect of the
accounting year in which the employee derives profit from such establishment.
9. An establishment shall be deemed to be newly set up by reason of a change in its location,

14
 management, ownership.
10. Customary bonus can be adjusted against the amount of bonus paid to the employee.
Answers:
Fill in the blanks
1. Establishment in private sector, establishment in public sector;
2. Not less than 30 days;
3. 21,000/-;
4. 8.33%, `100;
5. One month within the award becomes enforceable;
6. D;
7. Industrial dispute;
8. Incentive;
9. Gratuitous, deferred;
10. A Government company.
Choose the correct answer
1. C;
2. B;
T E
3. D;
4. A;
T I TU
5. D;
6. C; I N S
7. B;
8. D; SJ C
9. A
10. C.
State whether TRUE or FALSE
1. FALSE;
2. TRUE;
3. TRUE;
4. FALSE;
5. TRUE;
6. FALSE;
7. TRUE;
8. TRUE;
9. FALSE;
10. TRUE.

15
 Minimum Wages Act
Fill in the blanks
1. Adult is a person who has completed hisyear.
2. Any person who is responsible to the owner for the supervision and control of the employee
or for the payment of wages is an .
3. The schedule is divided into two parts. Part I of the schedule has entries.
4. The minimum wages shall be paid in .
5. Where a person provides labor or service to another for remuneration which is less than the
minimum wage, such labor is called .
6. When a worker works more than 9 hours on any day or more than 48 hours a week, he shall
be entitled to overtime wages 1.5 times of the ordinary wages in case of employment in .
7. The minimum wages shall be paid in an establishment in which more than 1000 persons are
employed before the expiry of th day.
8. Total amount of deductions from the wages shall not exceed of such wages where such
deductions are paid to co-operative societies.
9. To set the weekly day of rest the employee has to work for a continuous period for not less
than days in a week.
10. The claim for minimum wages shall be made in .

Choose the correct answer

1. Schedule II of this Act relates to an employment of –
T E
A- State Government;

T I TU
B- Central Government;
C- Agriculture;
I N S
SJ
D- Local authority.
C
2. Minimum wages may be fixed by-
A- The hour;
B- The day;
C- Month;
D- By any of the above method.
3. Review of minimum wages is to b e done at such interval not exceeding-
A- 3 years;
B- 5 years;
C- 7 years;
D- 10 years.
4. No minimum wages cannot be fixed where-
A- Dispute is pending before the Tribunal;
B- Dispute is pending before any authority under any other law for the time being
in force;
C- An award in operation;
D- Any one of the above three.

16
5. Wages of a worker shall be paid before the expiry of 7th day in the establishment for which
less than persons are employed.
A- 1000;
B- 500;
C- 250;
D- 100.
6. If the authority finds the application for claim of minimum wages is a vexatious one, he may
imposed penalty a sum no exceeding-
A- `100/-;
B- ` 50;
C- `500/-
D- `250/-
7. The Central Government proposes the minimum rate of wages at-
A- `5000/-
B- `7500/-
C- `10000/-
D- `15,000/-
T E
TU
8. A wage slip shall be issued by every employer to every employee-

T I
A- at least a day prior to the disbursement of wages;

S
B- on the day on which the wages is disbursed;
C- none of the above.
C I N
SJ
9. Rule 24 provides that the number of hours which shall constitute a normal working day in
respect of an adult shall be-
A- 4.5 hours;
B- 9 hours;
C- 12 hours;
D- None of the above.
10. The appropriate government may fix minimum rate of wages for-
A- Time work;
B- Piece work;
C- Guarantee time rate;
D- All he above.

17
Answers:
Fill in the blanks
1. 18th;
2. Employer;
3. 18;
4. Cash;
5. Forced labor;
6. Agriculture;
7. 10th day;
8. 75%;
9. Six;
10. Duplicate.
Choose the correct answer
1. C;
2. D;
3. C;
T E
4. D;
T ITU
5. A;

I NS
6.

7.
B;
C;
SJ C
8. A;
9. B;
10. D.

18
 Payment of Wages Act
Fill in the blanks
1. The wage period shall not exceed .
2. The term ‘employer’ includes the deceased employer.
3. All payment of wages shall be made on .
4. The wage of employed person shall be paid to him with deduction of any kind except those
under this Act.
5. The total amount of fine which may be imposed in any wage period shall not exceed an
equal to of the wages payable to him in respect of wage period.
6. Every register and record shall be preserved for a period of after the date of last entry
made therein.
7. The claim for delayed payment of wages for deduction made from the wage is to be made in
Form in case of individual employed person.
8. The proviso to Section 15(2) provides that an application against the delayed payment of
wages is to be filed within months to the authority from the date on which the
payment is due.
9. The wages in respect of any person terminated shall be payable before the expiry of working
day from the date of termination.
10. The limitation for a claim would always start from the date on which the wage is .

Choose the correct answer

T E
T TU
1. The payment of wages Act applies to wages payable to an employed person in respect of
I
wage period if such wages for that wage period do not exceed ` per month.
A- `6500/-
I N S
B- `10000/-

SJ
C- `18,000/- C
D- `25,000/-
2. Payment of wages shall be made-
A- In current coins;
B- By currency notes;
C- Cheque;
D- By crediting in bank account;
E- Any of the above.
3. No fine shall be imposed on the employees under the age of –
A- 10
B- 15
C- 18
D- None of the above
4. The authorization to act on behalf of an employed person or persons for the claim of delayed
payment of wages is to be given to the authority in Form No. –
A- A
B- B
C- C

19
 D- D
5. In appeal against the order of the authority may be filed to the District Court within-
A- 30 days;
B- 45 days;
C- 60 days;
D- 90 days;
6. The wages of employed persons in an establishment where less than 1000 persons are
employed, shall be paid before-
A- 7th day;
B- 10th day;
C- 15th day;
D- Second working day.
7. No fine shall be recovered after the expiry of days from the day on which it was imposed.
A- 30;
B- 60;
C- 90;
D- 1 year.
T E
TU
8. Which shall be deemed to be absent by an employed person?
A- Refused to work;

S T I
C
C- None of the above;I N
B- Participating in work;

SJ
D- Either (a) or (b).
9. The Authority may refuse to entertain an application for the claim-
A- That the applicant is not entitled to present the application;
B- That the application is barred by limitation;
C- That the applicant shows no sufficient cause for making a direction;
D- Any of the above.
10. If the employee does not attend the hearing the application will be-
A- Dismissed;
B- Decided as ex-parte;
C- None of the above.

State whether TRUE or FALSE

1. All deductions and all realizations shall be recorded in a registered to be kept open by the
person responsible for the payment of wages.
2. Every payment made by the employed person to the employee shall be deemed to be a
deduction from wages.
3. Any loss of wage, resulting the suspension of an employee amounts to deduction of wages.
4. If the application for the claim of wrong deduction is filed beyond limitation period, the
authority would reject the application.
5. The term ‘employed person’ includes the legal representatives of a deceased employed

20
 person.
6. Every employer shall be responsible for the payment of wages to be paid under the Act to
persons employed by him.
7. A notice is not required to be issued before imposing fines on the employed person.
8. Fine may be recovered from the employed person by installments.
9. No recovery shall be made of advances given before employment against the advance given
for travelling expenses.
10. The application for claim of delayed payment of wages should be filed in duplicate. One copy
shall bear such Court fee as may be prescribed.

T E
T I TU
I N S
SJ C

21
Answer:
Fill in the blanks
1. One month;
2. Legal representative;
3. A working day;
4. Authorized;
5. 3%
6. 3 years;
7. A;
8. 12 months;
9. Second;
10. Accrues.
Choose the correct answer
1. C;
2. E;
3. B;
T E
4.

5.
D;

T ITU
6.
A;
A;
I N S
7.

8.
C;
D; SJ C
9. D;
10. A.
State whether TRUE or FALSE
1. TRUE;

2. TRUE;
3. FALSE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. FALSE;
9. TRUE;
10. TRU

22
Fill in the blanks
1. The Board shall have a minimum number of directors in the case of private company.
2. The maximum number of directors shall be .
3. Small shareholder means a share holder holding shares of nominal value not more than `
4. The company shall, within days of the appointment of a director, file consent of director
with the Registrar.
5. DIN stands for .
6. A return containing the appointment of directors and KMP and changes therein shall be filed
with the Registrar within days of such appointment or change by the company.
7. The maximum age limit of Managing Director is years.
8. The total managerial remuneration payable by a public company to its directors, including
9. Managing Director and Whole Time Director in respect of a financial year shall not exceed of
the net profits of the company.
10. Sitting fees shall not exceed per meeting of the Board or Committee.
11. The office of a Director shall become vacant in case he absent himself from all the meeting of
the Board of Directors held during a period of with or without seeking leave of absence of
Board.

Choose the correct answer

1. The minimum number of directors for a public company is-
A- 1

T E
TU
B- 2
C- 3

S T I
D- 7

I N
2. What is the paid up share capital fixed for the appointment of a woman director?
C
SJ
A- `100 crores;
B- `300 crores;
C- `500 crores;
D- None of the above.
3. The appointment of an independent director shall be approved by the-
A- Board meeting;
B- General meeting;
C- Registrar of Companies;
D- Central Government.
4. The tenure of director appointed by small share holders shall be-
A- Up to the date of next AGM;
B- 1 year;
C- 3 years;
D- 5 years.
5. No independent director shall hold office for more than consecutive terms.
A- 2
B- 3
C- 4

23
 D- 5
6. Which public company is required to appoint independent director”
A- The public company having turnover of `100 crores or more;
B- The public company having paid up share capital of `10 crores or more;
C- The public companies which have, in aggregate, outstanding loans, debentures
and deposits exceeding `50 crores;
D- Any of the above.
7. Which one of the following is not the criterion for the appointment of independent director?
A- He shall not be a promoter of the company.
B- He shall relate to the promoters of the company;
C- He shall not have any pecuniary relationship with the company or their
promoters or directors during two immediately preceding financial year.
D- His relatives have not held any pecuniary relationship with the company
amounting to 2% or more of its gross turnover.
8. A director may be elected by small share holders upon a notice by-
A- Not less than 1000 small shareholders;
B- One tenth of the total number of shareholders;

T E
C- Not less than 1000 small shareholders or one tenth of such shareholders,
whichever is lower;
D- None of the above.
T I TU
I N S
9. At every AGM, not less than of the total number of directors shall retire by rotation.
A- One third;

SJ
B- Two third;
C
C- Three fourths;
D- Half.
10. The minimum age prescribed for the appointment of Managing Director is-
A- 18 years;
B- 21 years
C- 30 years
D- 70 years.

State whether TRUE or FALSE

1. A company may appoint more than 15 directors after passing a resolution.
2. All companies are required to appoint one woman director.
3. An independent director shall not be entitled to any stock option.
4. Whole time director is not the employee of the company.
5. Additional director shall hold office up to the date of next AGM.
6. The DIN allotted to a director before the commencement of this Act shall be deemed to be
the DIN allotted under the new Act.
7. Non obtaining of DIN does not amount to disqualification of a director.
8. The Board may accept the resignation of a Director on his submission of his application for
resignation.

24
 9. The removed directors shall not be reappointed as director by the Board of Directors.
10. In any financial year, if a company has no profits or its profits are inadequate, the company
shall not pay remuneration to its directors.

Answers:
Fill in the blanks
1. 2;
2. 15;
3. 20000;
4. 30;
5. Director Identification Number;
6. 30;
7. 70;
8. 11%;
9. 1 lakh;
10. 12 months.
Choose the correct answer
T E
TU
1. C;
2.
3.
A;
B;
S T I
4. C;
C I N
SJ
5. A;
6. D;
7. B;
8. C;
9. B;
10. B.
State whether TRUE or FALSE
1. TRUE;
2. FALSE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. FALSE;
9. TRUE;
10. TRUE

25
 Ethics
Fill in the blanks
1. The term ethics is derived from Latin word .
2. Ethics of a three types viz ………., ……….and………. .
3. The ethical operation of a company is directly related to in both short and long term.
4. Meta ethics deal with the nature of .
5. Continuous improvement or is a popular theme.

Answers:
Fill in the blanks

1. Ethos;
2. Meta ethics, normative ethics and applied ethics.
3. Profitability;
4. Moral judgment;
5. Kaizen.

T E
T I TU
I N S
SJ C

26
 Indian Contract Act
Fill in the blanks
1. Proposal is other called as………………..
2. Uncommunicated communication cannot result in a or .
3. Agreements of wagers are .
4. Consideration is of three types, , and .
5. The person in respect of whose default the guarantee is given is called the .
6. The person delivering the goods is called the .
7. No consideration is necessary to create .
8. The ratification may be or in the conduct of the person on whose behalf the acts are
done.
9. is a person employed to do any act for another or to represent another in dealing
with the third person.
10. A contract of bailment is , if the bailee does any act with regard to the goods bailed,
inconsistent with the conditions of bailment.
Choose the correct answer
1. Which one of the following is not a quasi contract?
A- Claim for necessaries supplied to person incapable of contracting, or on his
account;

T E
B- Reimbursement of persons paying money by another, in payment of which he is

TU
interested;

T I
C- Uncertainty and futurity of the event to which it is related;

S
I N
D- Responsibility of finder of goods.

C
2. The breach of contract may be-
A- Actual;
SJ
B- Anticipatory;
C- None of the above;
D- Either of the above.
3. Which one of the following is not the feature of the contract of guarantee?
A- There are two parties in this contract;
B- The liability of surety is secondary;
C- There is an existing debt for which the surety gives guarantee to the creditor on
behalf of the principal debtor;
D- The surety gives contract at the request of the principal debtor.
4. A person may not become an agent-
A- If he is of the age of maturity;
B- If he is of unsound mind;
C- Either of the above;
D- None of the above.
5. Which one of the following is not a contract?
A- A find B’s purse and gives it to him. B promises to give him `1,000/-;
B- A promises, for no consideration, to give `10,000/-;

27
 C- A agrees to sell a horse worth of `1,000/- for `10/-;
D- A supports B’s infant son. B promises to pay A’s expenses in so doing.
6. Which one of the following is not a lawful object?
A- A promises to obtain for B an employment in the public service and B promises
to pay ` 2 lakhs to A;
B- A agrees to sell his house to B for `25 lakhs for which B agrees;
C- A promises to maintain B’s child and B promises to pay `5,000/- per month;
D- A promises to pay `1 lakh at the end of six months if C who owes that sum to B
fails to pay. B promises to grant time to C accordingly.
7. Which one of the following is not the discharge by operation of law?
A- By merger;
B- By insolvency;
C- By breach of contract;
D- By the unauthorized alteration of items of a written document.

State whether TRUE or FALSE

1. Silent on the part of the offeree amounts to acceptance.

T E
2. An agreement to which the consent of the promise is freely given is not void.

TU
3. Electronic contracts are paperless contracts.

contingent contract.
S T I
4. Claim for necessaries supplied to person incapable of contracting, or on his account is called

I N
5. The surety gives contract at the request of the principal debtor.
6. In every contract of guarantee there is an implied promise by the principal debtor to indemnify
C
SJ
the surety.
7. Gratuitous bailment continues even after the death of either of the bailor or bailee.
8. The pawnee is entitled to receive from the pawnor extraordinary expenses incurred by him
for the preservation of the goods released.
9. The sub agent is responsible for his act to the principal.
10. The termination of the authority of an agent causes the termination of the authority of all sub
agents appointed by him.

28
Answer:
Fill in the blanks
1. Offer;
2. Promise, acceptance;
3. Void;
4. Executor, executed, past;
5. Principle debtor;
6. Bailee;
7. Agency;
8. Expressed, implied;
9. Agent;
10. Voidable at the option of the bailor.
Choose the correct answer
1. C;
2. D;
3. A;
T E
TU
4. D;
5. B;

S T I
6.
7.
A
C.
C I N
State whether TRUE or FALSE
1. FALSE; SJ
2. TRUE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. TRUE;
9. FALSE;
10. TRUE.

29
 Sales of Goods Act
Fill in the blanks
1. ‘Goods’ under Sale of Goods Act is property.
2. The contract of sale is an contract.
3. A warranty is a stipulation to the main purpose.
4. In an agreement to sale, the transfer of property in the goods is to take place at a
time.
5. When the property is transferred to the buyer the goods are at the risk whether the
delivery has been made or not.
6. The seller of the goods is deemed to be when the whole of the price has not been paid.
7. The unpaid seller has the right of on the goods for the price while he is in possession of
them.
8. The contract of sale is not by the mere exercise by unpaid seller of his right of lien or
stoppage in transit.
9. Where no time is fixed for the acceptance of goods, the measure of damage is the difference
between the price and the market price on the date of refusal by the buyer to accept the
goods.
10. If the buyer or his agents obtains delivery of the goods before their arrival at the appointed
destination, the transit is at an .

Choose the correct answer

T E
A- It is an executor contract;
T I TU
1. Which one of the following is not the feature of ‘agreement to sale’?

I N S
B- Sales takes place for existing and specific goods;

SJ C
C- The seller can sue for damages only in case of breach by the buyer;
D- It gives a right to the buyer against the seller to sue for damages.
2. Which one of the following is the subject matter of the contract?
A- Existing or future goods;
B- Goods perishing before making contract;
C- Goods perishing before sale but after agreement to sell;
D- Any of the above.
3. Which is not the circumstance in which the transit of the goods is at end?
A- If the buyer or his agents obtains delivery of the goods before their arrival at the
appointed destination;
B- Where the earlier or other bailee wrongfully refuses to deliver the goods to the
buyer or his agents in that behalf;
C- If the goods are rejected by the buyer and the carrier or other bailee continues
in possession of them;
D- Where the carrier or other bailee wrongfully refuses to deliver the goods to the
buyer or his agents in that behalf.
4. Find out the right of the unpaid seller from the following-
A- A lien on the goods for the price while he is in possession of them;
B- A right of resale as limited by the Act;

30
 C- In case of the insolvency of the buyer a right of stopping the goods in transit
after he has parted with the possession of them.
D- All the above.
5. Which one of the following is correct in regard to risk with property?
A- Risk is involved on both the seller and the buyer;
B- Where the delivery has been delayed through the fault of either buyer or seller,
the goods are at the risk of the party in fault;
C- Both (a) and (b);
D- None of the above.
State whether TRUE or FALSE
1. In a contract of sale the property in the goods is transferred from the seller to the buyer.
2. In an ‘agreement to sale’ the buyer is entitled to recover the same from the Official Liquidator
in case of insolvency of the seller.
3. A condition is a stipulation essential to the main purpose of the contract.
4. In a sale by sample an implied condition is that the bulk shall correspond with the sample in
quality.
5. Unless otherwise agreed, the goods remain at the buyer’s risk until the property is transferred
to the buyer.
6. The seller of the goods is not bound to deliver them until the buyer applies for the delivery.

T E
7. The buyer of the goods is not bound to accept the delivery of goods by installments unless

TU
otherwise agreed.

sue to seller damages for non delivery.

S T I
8. If the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer cannot

I N
9. In an auction sale the sale may be noticed to be subject to a reserved or set up price.
10. The buyer is not to reject to goods where there is a breach of warranty by the seller.
C
SJ

31
Answers:
Fill in the blank
1. Moveable;
2. Executed;
3. Collateral;
4. Future;
5. Buyer’s
6. Unpaid seller;
7. Lien;
8. Rescinded;
9. Contract;
10. End.

Choose the correct answer

1. B;
2.
3.
D;

T E
TU
C;
4.
5.
D;
C.
S T I
State whether TRUE or FALSE
C I N
SJ
1. TRUE;
2. FALSE;
3. TRUE;
4. TRUE;
5. FALSE;
6. TRUE;
7. TRUE;
8. FALSE;
9. TRUE;
10. FALSE.

32
 Negotiable Instruments Act
Fill in the blanks

1. The transaction of negotiable instrument requires at least persons.

2. The person named in the instrument, to who or to whose order the money is by the
instrument directed to be paid is, called the .
3. Negotiation is of two types, namely, , .
4. A cheque is a bill of exchange drawn on a specified on demand.
5. Clearing house is managed by .
6. Draft cannot be drawn on .
7. Indorsement is of two types, namely, , .
8. A negotiable instrument indorsed in blank is payable to the .
9. If the amount is paid after due date, the interest is payable at when no interest rate has
been specified in the instrument.
10. The dishonor of the instrument may be due to and .
Choose the correct answer
1. One of the following is not a negotiable instrument. Identify the same.
A- Share certificate;
B- Bill of exchange;

T E
TU
C- Cheque;
D- Promissory note.

S
2. Which one of the following is a Bill of Exchange? T I
A- A banker’s draft;

C I N
SJ
B- A demand draft;
C- An order issued by a District Board Engineer on Government Treasury for
payment to or order of a certain person;
D- All the above.
3. Which one of the following is not the element of draft?
A- It cannot be drawn on private individual;
B- It cannot be countermanded easily;
C- It is open to the person to stop payment;
D- The bank undertakes the liability which it is bound to discharge in whose favor
the draft is issued;
4. Holder in due course means any person-
A- Drawing the instrument;
B- Who for consideration became the possession of a promissory note;
C- Named in the instrument to whom or to whom order the money is directed to
be paid;
D- None of the above.
5. Who may negotiate?
A- Drawer;
B- Payee;

33
 C- All of the joint makers;
D- None of the above
E- Any of (a) to (c).
6. The liability on the instrument may be discharged-
A- By cancellation;
B- By release;
C- By payment;
D- By any one of the above methods.
7. A cheque shall be deemed to be crossed specially-
A- On addition of the name of the banker;
B- Drawing two lines parallel;
C- Any of (a) or (b);
D- None of (a) and (b).
State whether true or false
1. Currency note is a negotiable instrument.
2. Cheque is a bill of exchange.
3. The maker of the promissory note can also be called a drawer.

T E
4. Handing over a negotiable instrument to an agent for safe custody is negotiation.

TU
5. If the maturity date is a public holiday the instrument shall be deemed to be due on the next
preceding business day.

S T I
6. Bill of exchange is an instrument in writing an unconditional order directing to pay a certain

I N
sum of money to the bearer of the instrument.

C
7. If the indorser signs his name only, the indorsement is called to be ‘in full’.

SJ
8. Only drawee can be acceptor except in need for hour.
9. A holder is not having right to duplicate of lost bill, before it is overdue.
10. When an instrument is dishonored the holder must give notice that the instrument has been

34
Answers:
Fill in the blanks
1. 2;
2. Payee;
3. Negotiation by delivery, negotiation by indorsement;
4. Banker;
5. Reserve Bank of India;
6. Private individual;
7. Indorsement in blank, indorsement in full;
8. Bearer;
9. 18%
10. Non acceptance, nonpayment.

Choose the correct answer

1. A;
2. D;

T E
TU
3. C;
4.
5.
B;
E;
S T I
6. D;
C I N
7. A.
State whether true or false
1. FALSE;
SJ
2. TRUE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. TRUE;
9. FALSE;
10. TRUE.

35
 Indian Partnership Act
Fill in the blanks
1. Partnership is the creation of .
2. The liability of a partner in a firm is .
3. Nominal partner is of two types, and .
4. Maximum no. of partners in banking is .
5. In particular partnership a person may become a partner with another person in particular
6. Partner is the of the firm for the purpose of the business of the firm;
7. Where a partner in a firm is adjudicated as insolvent, he ceases to be a partner on the date on
which .
8. A partnership firm is to be registered with .
9. Partnership at will is a partnership formed for period.
10. A firm is a collective of partners.
Choose the correct answer
1. Who can take active part in the management of the firm?
A- Sleeping partner;
B- Secret partner;
C- Working partner;
D- Nominal partner.
T E
TU
2. A new partner can be introduced as a partner into a firm-

T
A- At the discretion of active partner;

S I
I N
B- At the decision of partners authorized in this behalf;

C
C- With the consent of all existing partners;

SJ
D- None of the above.
3. A partner may retire-
A- With the consent of all partners;
B- In accordance with an express agreement by the partners;
C- By giving notice in writing to all partners;
D- Any one of the above.
4. Intimation of the reconstitution of change in a registered partnership is to be given to the
Registrar of firms-
A- No time limit;
B- Within 30 days;
C- Within 60 days;
D- Within 90 days.
5. A firm shall not contain any name-
A- King;
B- Queen;
C- Empire;
D- All the above.

36
State whether true or false
1. A sleeping partner is not entitled to share profits of the firm.
2. Partners in profits only share in the profits of the firm but not losses.
3. Audit is compulsory for the partnership firm.
4. Creditors of a firm can proceed against the partners jointly and severally.
5. Partnership firm is a separate legal entity.
6. The death of karta will not lead to the dissolution of the HUF business.
7. Every partner has a right to take part in the conduct of the business.
8. A partner is not required to indemnify the firm or any loss caused to it by his willful neglect in
the conduct of the business of the firm.
9. An advance by a partner to a firm is not treated as increase of his capital.
10. If a partner derives any profit for himself from any transaction of the firm, he shall account for
the profit and pay it to the firm.
11. An outgoing partner may, carrying on a business, use the firm name.
12. After the dissolution of a firm the goodwill shall be included in the assets and it be sold either
separately or along with the property.
13. If a firm closes a branch or open a branch the same should be intimated to the Registrar of
Firms.
14. A unregistered firm can file a suit to enforce a right, arising from a contract, in any court
against any third party.
15. A minor has to elect, on his attaining or majority as to become a partner or not.

T E
T I TU
I N S
SJ C

37
Answers:
Fill in the blanks
1. Contract;
2. Unlimited;
3. Partner by estoppel, partner by holding out;
4. 50;
5. Adventure or undertaking;
6. Agent;
7. The order of adjudication is made;
8. Registrar of firms;
9. An indefinite;
10. Partners.
Choose the correct answer
1. E;
2. C;
3. D;
T E
TU
4. A;
5. D.

S T I
1. FALSE;
C I
State whether true or false
N
2.
3.
TRUE;
FALSE;
SJ
4. TRUE;
5. FALSE;
6. TRUE;
7. TRUE;
8. FALSE;
9. TRUE;
10. TRUE;
11. FALSE;
12. TRUE;
13. TRUE;
14. FALSE;
15. TRUE.

38
 Limited Liability Partnership
Fill in the blanks
1. Every LLP has at least partners.
2. Designated partners shall always be .
3. The particulars of designated partner shall be filed within days of his appointment
with the Registrar.
4. Every partner shall inform the LLP of any change in his name or address within a period of
days of such change in Form No. .
5. Every partner of LLP is the of LLP.
6. The books of accounts of a LLP are required to preserve for from the date on which they
are made.
7. The LLP shall inform the concerned Registrar within of the date of registration about the
conversion and the particulars of LLP.
8. The foreign LLP shall file any alteration with the Registrar within days of the close of the
financial year.
9. The Central Government may appoint Inspector to investigate the affairs of the LLP if not less
than the total number of partners of LLP make an application.
10. Where an LLP is not carrying on any business for a period of or more, the name of the LLP
may be struck off by the Registrar.

Choose the correct answer

T E
1. An LLP is a-
A- Partnership;
T I TU
B- Company;
I N S
SJ C
C- Hybrid between a company and a partnership;
D- None of the above.
2. The procedure for conversion from the firm into LLP is dealt with in the-
A- First Schedule;
B- Second Schedule;
C- Third Schedule;
D- Fourth Schedule.
3. Which one of the following is not an LLP?
A- Corporate Sole;
B- LLP registered under LLP Act;
C- LLP incorporated outside India;
D- Company registered outside India.
4. The minimum number of designated partners in an LLP shall-
A- 1;
B- 2;
C- 7;
D- 15.
5. The fee payable for registration of LLP whose contribution exceeds `10 lakhs is-

39
 A- `500/-;
B- `2000/-;
C- `4000/-;
D- `5000/-.
6. A partner may contribute to the LLP-
A- Tangible or intangible property;
B- Moveable or immoveable property;
C- Money, promissory note etc.,
D- Any of the above.
7. The accounts of LLP shall be audited if the turnover of LLP exceeds-
A- ` 10 lakhs;
B- `20 lakhs;
C- `40 lakhs;
D- ` 1 crore.
8. Which one of the following documents is required to keep for more than 5 years?
A- Copies of Government order relating to LLP;

T E
B- All papers, registers, refund orders and correspondence relating to the LLP

TU
liquidation accounts;

T I
C- Copies of statistical returns furnished to Government;

S
C I N
D- Annual return of a LLP.
9. The Act does not allow the conversion from into LLP-

SJ
A- Conversion from firm into LLP;
B- Conversion from private company to LLP;
C- Conversion from listed company into LLP;
D- Conversion from unlisted company into LLP.
10. A compromise or arrangement may be proposed-
A- Between a LLP and its partners;
B- Between a LLP and its creditors;
C- Either (a) or (b);
D- None of the above.

State whether TRUE or FALSE

1. The liability of a partner in an LLP is limited.
2. LLP is a separate legal entity.
3. An LLP is incorporated outside India is also included in the definition of LLP.
4. If the minimum number of partners is reduced below LLP may not carry its business.
5. The liabilities of LLP shall be met out of the properties of designated partners.
6. No partner shall be entitled to remuneration for acting in the business of LLP.
7. The Central Government may compound any offence under this Act which is punishable with
fine only.
8. A company may apply to convert itself into a LLP if and only if the partners of the LLP to which

40
 it converts comprise all the shareholders of the company and no one else.
9. LLP Administrator shall be appointed from a panel maintained by the State Government for
winding up and dissolution of LLP.
10. The liability of every designated partner of the dissolved LLP shall continue and may be
enforced as if the LLP had not been dissolved.

T E
T I TU
I N S
SJ C

41
Answers:
Fill in the blanks
1. 2;
2. Individual;
3. 30;
4. 15, Form 6;
5. Agent;
6. 8 years;
7. 15 days;
8. 60 days;
9. One fifth;
10. 2 years.

Choose the correct answer

1. C;
2.
3.
B;

T E
TU
A;
4.
5.
B;
D;
S T I
6. D;
C I N
7.
8.
C;
B; SJ
9. C;
10. C.

State whether TRUE or FALSE

1. FALSE;
2. TRUE;
3. TRUE;
4. FALSE;
5. TRUE;
6. FALSE;
7. TRUE;
8. TRUE;
9. FALSE;
10. TRUE

42
 Companies Act
Model Questions
1. The minimum number of members required for a public listed company is .
2. The maximum number of members for a private limited company is .
3. ………. provides the memorandum of association of an unlimited company and not having
share capital.
4. ………. provides the Articles of Association of a company limited by guarantee and having
share capital.
5. A company shall send copy of each of the document such as memorandum etc., to a member
within days of the request made by him.
6. The company is to file a copy of the order of the Tribunal approving the alteration of articles
together with a printed copy of altered articles within days.
7. Any alteration in the memorandum, in the case of company limited by guarantee and not
having a share capital purporting to any person a right to participate in the divisible profits
of the company, otherwise than as a member, shall be .
8. The Registrar on registering a company shall allot……… on and from the date mentioned in
the certificate of incorporation.
9. The………of the company shall contain the regulations for management of the company.
10. Table in Schedule……….provides the matters that shall be considered in the Articles.

Answers:
T E
Fill in the blanks
1.
T I TU
2.
7;
200;
I N S
3.
4.
Table D;
Table G;
SJ C
5. 7;
6. 15;
7. Void;
8. Corporate Identification Number – CIN;
9. Articles;
10. F, I.

Model Questions
1. The registered office shall be opened within from the date of incorporation of the
company.
2. The notice of every change in the situation of registered office shall be given to the Registrar
of Companies within of the change.
3. An application in is to be filed with for seeking confirmation for shifting the
registered office within the same State from the jurisdiction of Registrar of Companies to the
jurisdiction of another Registrar of Companies.
4. The Regional Director shall communicate the confirmation of shifting of registered office
within…………….of receipt of the application.
5. The company shall furnish to the Registrar, verification of its registered office within …….
from the date of its incorporation in……………..along with fee.

43
Answers:
Fill in the blanks
1. 15 days;
2. 15 days;
3. Form No.INC – 23, Regional Director;
4. 30 days;
5. 30 days, INC – 22.
Fill in the blanks
1. The private placement shall be made, not more than persons in aggregate in a financial
year.
2. The value of such offer of invitation per person shall be with an investment size of not less
than……………of face value of the securities.
3. The company making an offer or invitation shall allot securities within from the date of
receipt of the application money for such securities.
4. If the company is not able to allot securities, the application money shall be refunded within
…………… days from the date of completion of………………..days.
5. If the application money is not refunded within the specified time, the company shall be
liable to pay that money with interest at………. per annum from the expiry of 60th day.

T E
TU
Answers:
Fill in the blanks
1. 200;
S T I
2. `20,000/- ;
C I N
SJ
3. 60;
4. 15, 60;
5. 12%.
Fill in the blanks
1. A share capital of the company includes .
2. The share capital of a company limited by shares shall be of two kinds namely, and……….
3. Equity share capital is of two types………,, and………….. .
4. The company shall maintain a Register of Employee Stock Option in Form No.. .
5. If the shareholders not less than……….of the issued shares of class did not consent to the
variation or vote in favor of the special resolution for the variation, such shareholders may
apply to the Tribunal to have the variation cancelled.
6. The company shall file the notice with the Registrar within a period of in case of alteration
or increase of redemption along with an altered memorandum.
7. Any share issued by a company at a discounted price shall be .
8. The share certificate shall be delivered by a company within a period of from the
date of allotment.
9. An instrument of transfer of securities, in physical form shall be filed in Form No. .
10. The company shall not issue sweat equity shares for more than of the existing paid
up share capital in a year.

44
Choose the correct answer
1. Which one of the following is not correct in regard to share certificate?
A- The Company Secretary shall issue the share certificate.
B- The share certificate shall be issued in pursuance of a resolution of the Board;
C- Every share certificate shall be distinguished to its distinctive number.
D- The shares may be in the dematerialized form.
2. If a company does not have a common seal, the share certificate shall be signed by-
A- Two directors;
B- One director and Company Secretary;
C- Either (a) or (b);
D- None of the above.
3. In case of unlisted company the duplicate share certificate shall be issued within a period
of-
A- 45 days
B- 3 months
C- 6 months
D- None of the above.
T E
TU
4. The Bonus shares may be issued out of the-
A- Free reserves;

S T I
C I N
B- Securities premium account;
C- Capital redemption reserve account;

SJ
D- Any of the above.
5. For which purposes securities premium account can be utilized?
A- In writing off the preliminary expenses;
B- Buy back of shares;
C- Issue of bonus shares;
D- Any of the above.

State whether TRUE or FALSE

1. The company shall not convert its existing equity shares with voting rights into equity share
capital carrying differential voting rights and vice versa.
2. The Board of Directors is not required to disclose in the Board’s Report about the issue of
equity shares with differential rights.
3. The holders of equity shares with differential rights shall have the rights of getting bonus
shares, rights issue etc.,
4. A company can issue a share at discount.
5. The securities premium account can be utilized for the purchase of its own shares of
securities.
6. No reduction of capital shall be made if the company is in arrears in repayment of any
deposits accepted by it.
7. A company limited by shares or limited by guarantee and having a share capital may, by
ordinary resolution, reduce its capital.

45
 8. The cancellation of shares shall not be deemed to reduction of share capital.
9. Where the dividend is not paid to the preference share holders for a period of 3 years or
more, they shall have a right to vote on all the resolutions placed before the company.
10. Bonus shares shall be issued by capitalizing reserves created by revaluation of assets.

Answers:
Fill in the blanks
1. Stock;
2. Equity share capital, preference share capital;
3. With voting rights, with differential rights as to dividend, voting;
4. SH – 6;
5. 10%;
6. 30;
7. Void;
8. Two months;
9. SH-4;
10. 15%.

T E
TU
Choose the correct answer
1.
2.
A;
C;
S T I
3. B;
C I N
4.
5.
D;
D; SJ
State whether TRUE or FALSE
1. TRUE;
2. FALSE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. TRUE;
9. TRUE;
10. FALSE

46
Fill in the blanks
1. Preference share capital is not entitled to and .
2. A preference share shall be redeemed within a period not exceeding from the date of
their issue.
3. The issue of further redeemable share or redemption of preference shares shall not be
deemed to be an or in the share capital.
4. The particulars of the issue of preference share holders shall be noted in the .
5. The resolution for issue of preference share shall indicatre the payment of dividend on
or basis.
Answers:
Fill in the blanks
1. Dividend, any surplus in the winding up proceedings;
2. 20 years;
3. Increase, reduction;
4. Register of Members;
5. Cumulative, non cumulative.
Fill in the blanks
1. No offer of buy back shall be made within a period of reckoned from the date of closure of
the preceding offer of buy back, if any.
T E
2. The company shall file with the Registrar of Companies a letter of offer in Form No before
the buyback of shares.

T I TU
3. Every buy back shall be completed within a period of from the date of passing special

N S
resolution in the general meeting or resolution passed by the Board.

I
4. The company shall destroy the share or securities bought back within of the last date of

SJ
completion of buy back.
C
5. After buy back a company shall not make a further issue of shares within a period of .

Answers:
Fill in the blanks
1. One year;
2. SH-8;
3. One year;
4. 7 days;
5. Six months.
Fill in the blanks
1. No company shall issue any debenture carrying .
2. Debentures shall be the property.
3. A debenture trustee may be removed from the office before the expiry of his term only if it
is approved by the holders of not less than in value of the debenture outstanding at
their meeting.
4. Every company required to create Debenture Redemption Reserve on or before in each
year.
5. For unlisted companies issuing debentures on private placement basis, the Debenture
Redemption Reserve will be of the value of the debentures.

47
Answers:
Fill in the blanks
1. Voting rights;
2. Moveable;
3. Three fourth;
4. 30th day of April;
5. 25%.
Fill in the blanks
1. A public company, having a net worth of not less than ` or a turnover of ` is eligible
for making any invitation to the public for acceptance of deposits.
2. Every company accepting secured deposits from the public shall within days on such
acceptance create a on its assets of amount not less than the amount of deposits accepted.
3. The minimum investment rating grate to be obtained from Brickwork Ratings India Private
Limited is .
4. The company shall execute a deposit in Form No. at least 7 days before issuing circular
or circular in the form of an advertisement.
5. The company on acceptance or renewal of a deposit is to furnish to the depositor or his
agent a receipt for the amount received within a period of days from the date of receipt of
money.

T E
6. On the request of the depositor after the expiry of months from the date of such receipt

fixed ra
T I TU
but before the expiry of the period, the rate of interest shall be reduced by from the

Answers:
Fill in the blanks I N S
1.
2. SJ C
`100 crores, `500 crores;
30; charge;
3. BWRFBBB
4. Trust deed, DPT – 2;
5. 21 days;
6. 1%.
Fill in the blanks
1. For issue of global depository receipt, a company is to pass resolution in the general
meeting.
2. The issue of depository receipts shall either be remitted to a bank account in or deposited
in an bank operating abroad or any foreign bank, which is a scheduled bank under Reserve
Bank of India Act, 1934.
3. The provisions relating to is not applicable to global depository receipt issue.

48
Answers:
Fill in the blanks
1. Special;
2. India; Indian;
3. Issue of public share or debentures.
Fill in the blanks
1. The charge may be within or on the properties of the companies situated outside
India.
2. The time limit for registration of charge is days from the date of creation of charge.
3. The Registrar may, if he is satisfied that the company had sufficient cause for not filing the
particulars within 30 days allow the registration after 30 days but within a period of days
of the creation of the charge.
4. The application for condonation of delay shall be made in Form No. .
5. The company shall, on payment or satisfaction full or any charge registered, give intimation
to the Registrar in Form No. within from the date of such satisfaction.
Answers:
Fill in the blanks
1. India, outside India;
2. 30;
T E
TU
3. 300;
4. CHG -1 ;

S T I
5.
Fill in the blanks
CHG- 4, 30.

C I N
SJ
1. Every company limited by shares shall keep and maintain the Register of Members in Form
No. .
2. The Registration shall be preserved for a period of .
3. A company may close the Register of Members/Debentures etc., for any period not
exceeding in the aggregate of days in each year.
4. Declaration of beneficial interest in any share shall be filed by a person with a company in
within days from the date of the entry of his name in the Register.
5. The existing companies shall comply with the particulars within ------------ from the date of
commencement of the Rules.
Answers:
Fill in the blanks
1. MGT – 1;
2. 8 years;
3. 45;
4. Duplicate, 30;
5. 6 months.
Fill in the blanks
1. Every company shall prepare Annual Return in Form .
2. The Annual Return shall be signed by and ,
3. Every company shall file the Annual Return with the Registrar within from the date on
which Annual General Meeting is held.

49
 4. The Annual Return along with copies of all certificates and documents shall be kept for a
period of from the date of filing with the Registrar.
5. Every company shall file a return in Form No. in respect of charges relating to either
increase or decrease of 2% or more in the shareholding pattern within days of such change.

State whether TRUE or FALSE

1. Where there is no Company Secretary, the Annual Return shall be signed by a
practicing Company Secretary.
2. Annual Return filed by the listed company shall be certified by a practicing
Company Secretary stating the Annual Return discloses the facts correctly and
adequately and that the company has complied with all the provisions of the Act.
3. Annual Return is not required to attach with the Board’s Report.
4. Copies of Annual Return may be furnished to any member or other person on
payment of fee specified in the Articles, subject to a maximum of `5/- per page.
5. Annual Returns shall be prima facie evidence of any matter directed or authorized
to be inserted therein by or under this Act.
Answers:
Fill in the blanks
1. MGT – 7;
2. A director, Company Secretary;

T E
TU
3. 60 days;
4.
5.
8 years;

S T I
MGT – 10, 15.
State whether TRUE or FALSE
C I N
1.
2.
TRUE;
TRUE; SJ
3. FALSE;
4. FALSE;
5. TRUE.
Fill in the blanks
1. A general meeting may be called by giving not less than clear days notice either in
writing or through electronic mode.
2. In case of a private company members personally present shall be the quorum for
a meeting of a company.
3. A person can act as proxy on behalf of members not exceeding and holding
in the aggregate note more than of the total share capital of the company
carrying voting rights.
4. At any general meeting, a resolution put to the vote of the meeting shall be decided
on .
5. shall be appointed to scrutinize the poll process.
6. The polling form shall be in Form No. .
7. The report of the scrutinizers shall be submitted to the Chairman within
from the date of poll is taken.
8. Postal ballot means voting by post within a period of days from the date of
dispatch of letter.
9. A copy of every resolution is to be filed with Registrar within of the passing of the

50
 resolution.
10. Any member shall be entitled to be furnished within of the request on payment
of fee, with a copy of minutes.
Choose the correct answer
1. The quorum for a public company having the number of members more than 5000 is-
A- 2
B- 5
C- 15
D- 30
2. An instrument of the proxy shall be deposited with the registered office of the company
before the conduct of the meeting.
A- 7 hours
B- 21 hours
C- 48 hours
D- 60 hours.
3. In case of e-voting notice shall b sent as attachment in –
A- PDF
B- word file
T E
C- excel

T I TU
D- access

I N S
4. In the case of an adjourned meeting the company shall give not less than notice to
the members.
A- 1 days
SJ C
B- 3 days
C- 7 days
D- None of the above.
5. Which one of the following is not correct?
A- The articles of the company shall provide for the appointment of Chairman in a
meeting;
B- The members personally present at the meeting shall elect one of themselves to
be Chairman on a show of hands, if the article does not provide for the same;
C- Managing Director is the Chairman of the meeting.
D- The member selected as Chairman as a result of poll, continue the Chairman,
who is elected by show of hands.
6. Which of the following is the method of voting?
A- Voting by show of hands;
B- Voting through electronic means;
C- Voting by poll;
D- Postal ballot;
E- None of the above.

51
 7. A poll demanded on any question shall be taken within from the time when the demand
was made.
A- Immediately
B- 12 hours
C- 24 hours
D- 48 hours.
8. Which one cannot be transacted through postal ballot?
A- Appointment of auditor;
B- Election of a Director;
C- Buy back of shares by a company;
D- Change in place of registered office outside the local limits of any city, town or
village.
9. The assent or dissent received after days in postal ballot, from the date of issue of
notice, shall be treated as if no reply has been received from the member.
A- 3
B- 7
C- 30

T E
TU
D- 45

the company shall be liable to a penalty of `

S T I
10. If any inspection is refused or if any copy required is not furnished within the specified time,

A- `10000/-

C I N
SJ
B- `25000/-
C- `50000/-
D- ` 1 lakh.

State whether TRUE or FALSE

11. A general meeting may be called after giving a shorter notice if consent is given in
writing by not less than 50% of members entitled to vote at such meeting.
12. Notice of every meeting of the company shall be given to the auditor of the
company.
13. The Articles of the company shall provide the quorum for a meeting.
14. If the quorum is not there within half an hour in a meeting called by requisitionists,
shall stand adjourned to the same day in the next week at the same time and place.
15. A member of a company, not having share capital is entitled to appoint a proxy.
16. President of India may appoint such person as he thinks fit to act as his
representative at any meeting of the company.
17. A demand for poll may be withdrawn at any time by the persons who made the
demand.
18. The e-voting shall remain open for not less than 3 days and shall close at 5.00 P.M.
on the date preceding the date of general meeting.
19. Once the resolution is cast by the member by e-voting, he is again allowed to vote
in the meeting.
20. OPC and other companies having up to 200 members are not required to transact
any business through postal ballot.

52
Answers:
Fill in the blank
1. 21;
2. 2;
3. 50, 10%;
4. A show of hands;
5. Scrutinizer;
6. MGT 12;
7. 7;
8. 30;
9. 30;
10. 7 working days.
Choose the correct answer
1. D;
2. C;
3. A;
T E
TU
4. B;
5. C;

S T I
6.
7.
E;
D;
C I N
8.
9.
A;
C;
SJ
10. B.
State whether TRUE or FALSE
1. FALSE;
2. TRUE;
3. TRUE;
4. FALSE;
5. FALSE;
6. TRUE;
7. TRUE;
8. TRUE;
9. FALSE;

53
Fill in the blanks
1. Every company other than an--------------- shall in each year held a general meeting
as its AGM.
2. First AGM is to be conducted within-------------- from the date of the first financial
year of the company.
3. The report of AGM shall be filed with the Registrar within---------- of the conclusion
of AGM.
4. AGM is not to be conducted on a .
Answers:
Fill in the blanks
1. OPC;
2. Nine months;
3. 30 days;
4. A National Holiday.
Fill in the blanks
1. The Board shall conduct the EGM at the requisition made by not less than of
such of of the company, if the company is having share capital.
2. The Board is to proceed to call a EGM within days of the receipt of a valid

3.
requisition.
The EGM shall be conducted by the Board within
T E from the date of receipt of a

4.
valid requisition.

T I TU
If the Board does not conduct the EGM, the requisitionists themselves conduct the

5.
meeting within

I N S
from the date of requisition.
The company is bound to give the list of members with their registered addresses

Answers:
SJ C
before the expiry of from the date of receipt of a valid requisition.

Fill in the blanks

1. One tenth, paid up share capital;
2. 21;
3. 45 days;
4. 3 months;
5. 45 day
Fill in the blanks
1. The Board shall have a minimum number of directors in the case of private
company.
2. The maximum number of directors shall be .
3. Small shareholder means a share holder holding shares of nominal value not more
than `
4. The company shall, within days of the appointment of a director, file consent of
director with the Registrar.
5. DIN stands for .
6. A return containing the appointment of directors and KMP and changes therein
shall be filed with the Registrar within days of such appointment or change
by the company.
7. The maximum age limit of Managing Director is years.
8. The total managerial remuneration payable by a public company to its directors,

54
 including Managing Director and Whole Time Director in respect of a financial year
shall not exceed of the net profits of the company.
9. Sitting fees shall not exceed per meeting of the Board or Committee.
10. The office of a Director shall become vacant in case he absent himself from all the
meeting of the Board of Directors held during a period of with or without seeking
leave of absence of Board.
Choose the correct answer
1. The minimum number of directors for a public company is-
A- 1
B- 2
C- 3
D- 7
2. What is the paid up share capital fixed for the appointment of a woman director?
A- `100 crores;
B- `300 crores;
C- `500 crores;
D- None of the above.

E
3. The appointment of an independent director shall be approved by the-
T
TU
A- Board meeting;
B- General meeting;

S T I
C
D- Central Government.I N
C- Registrar of Companies;

SJ
4. The tenure of director appointed by small share holders shall be-
A- Up to the date of next AGM;
B- 1 year;
C- 3 years;
D- 5 years.
5. No independent director shall hold office for more than consecutive terms.
A- 2
B- 3
C- 4
D- 5
6. Which public company is required to appoint independent director”
A- The public company having turnover of `100 crores or more;
B- The public company having paid up share capital of `10 crores or more;
C- The public companies which have, in aggregate, outstanding loans, debentures
and deposits exceeding `50 crores;
D- Any of the above.
7. Which one of the following is not the criterion for the appointment of independent director?
A- He shall not be a promoter of the company.

55
 B- He shall relate to the promoters of the company;
C- He shall not have any pecuniary relationship with the company or their
promoters or directors during two immediately preceding financial year.
D- His relatives have not held any pecuniary relationship with the company
amounting to 2% or more of its gross turnover.
8. A director may be elected by small share holders upon a notice by-
A- Not less than 1000 small shareholders;
B- One tenth of the total number of shareholders;
C- Not less than 1000 small shareholders or one tenth of such shareholders,
whichever is lower;
D- None of the above.
9. At every AGM, not less than of the total number of directors shall retire by rotation.
A- One third;
B- Two third;
C- Three fourths;
D- Half.
10. The minimum age prescribed for the appointment of Managing Director is-
A- 18 years;
T E
B- 21 years

T I TU
C- 30 years
D- 70 years.
I N S
SJ
State whether TRUE or FALSE
C
11. A company may appoint more than 15 directors after passing a resolution.
12. All companies are required to appoint one woman director.
13. An independent director shall not be entitled to any stock option.
14. Whole time director is not the employee of the company.
15. Additional director shall hold office up to the date of next AGM.
16. The DIN allotted to a director before the commencement of this Act shall be
deemed to be the DIN allotted under the new Act.
17. Non obtaining of DIN does not amount to disqualification of a director.
18. The Board may accept the resignation of a Director on his submission of his
application for resignation.
19. The removed directors shall not be reappointed as director by the Board of
Directors.
20. In any financial year, if a company has no profits or its profits are inadequate, the
company shall not pay remuneration to its directors.

56
Answers:
Fill in the blanks
1. 2;
2. 15;
3. 20000;
4. 30;
5. Director Identification Number;
6. 30;
7. 70;
8. 11%;
9. 1 lakh;
10. 12 months.
Choose the correct answer
1. C;
2. A;
3. B;
T E
TU
4. C;
5. A;

S T I
6.
7.
D;
B;
C I N
8.
9.
C;
B;
SJ
10. B.
State whether TRUE or FALSE
1. TRUE;
2. FALSE;
3. TRUE;
4. FALSE;
5. TRUE;
6. TRUE;
7. FALSE;
8. FALSE;
9. TRUE;
10. TRUE.

57
1. Associate Company is a company in which that other company has a Significant influence. The
expression significant influence means
A- Control of at least 20% of voting power or control
B- Control business decision under a agreement
C- Both (a) and (b)
D- Control composition of Board of Directors
2. Articles of Association create relationship between
A- Company and outsiders
B- company and members
C- between members inter se
D- both b & c
3. A Company shall be a small company only if its paid-up share capital does not exceeds …………
and its turnover (as per profit and loss account for the immediately preceding F.Y ) does not
exceed……..
A- Rs 50lakh;Rs 2 crores
B- Rs 10crores;Rs 100 crores
C- Rs 50lakh;Rs 10 crores

T E
TU
D- None of the above

S T I
4. What is the purpose of using SPICe form for incorporating a company?
A- For Name Reservation and Incorporation

I
B- For Incorporation only
C N
SJ
C- For Name Reservation only
D- none of the above
5. To incorporate section 8 company and to obtain license, an applicant is required to submit
estimate of future annual income & expenditure for next along with application
A- one years
B- two years
C- three years
D- five years
6. The sole member shall nominate another person as nominee within of the receipt of the
notice of withdrawal of consent and shall send an intimation of such nomination in writing to
,along with the written consent of such other person so nominated in ...................
A- 15 Days; NCLT; INC-3
B- 21 Clear Days ;The Company; INC-9
C- 15 Days; The Company ; INC-3
D- 30 Days; ROC ; INC-4
7. No Registration Fees for incorporating company though SPICE is required where Authorised
Capital is
A- up to 15 lakhs.
B- up to 30 lakhs.

58
 C- up to 10 lakhs
D- up to 5 lakhs.
8. Inactive company means a company which has not been carrying on any business or operation?
A- During the last two financial year
B- During the last three financial year
C- During the last five financial year
D- During the last seven financial year
9. Unlimited company means a company where the liability of its members is unlimited towards
A- The creditors
B- The liquidator
C- The creditor and the liquidator
D- None of the above
10. The certificate of incorporation is issued by
A- Jurisdictional ROC
B- NCLT
C- Regional directors

T E
TU
D- Central registration centre

S
A- Special Resolution in general meeting T I
11. Entrenchment clause can be inserted in articles of public company by passing:-

I N
B- the consent of all members in general meeting

C
SJ
C- Ordinary Resolution in general meeting
D- none of the above
12. Entrenchment clause can be inserted in articles of private company by passing:-
A- Special Resolution in general meeting
B- the consent of all members in general meeting
C- Ordinary Resolution in general meeting
D- none of the above
13. As per Companies Act, 2013, is model form of Articles for company limited shares.
A- Table F
B- Table G
C- Table H
D- Table I
14. As per Companies Act, 2013, is model form of Articles for company limited by guarantee
and having share capital
A- Table F
B- Table G
C- Table H
D- Table I

59
15. Where a company has been got incorporated by furnishing any false or incorrect information or
by suppressing any material fact or information or by any fraudulent action, the Tribunal may,
on being satisfied that the situation so warrants, ……………….
A- Order for winding up for the company
B- Direct removal of the name of the company from the register of companies
C- Pass such other order as it may deem fit
D- All of the above
16. A firm may become a member of ……………..
A- A private company
B- A public company
C- Both (a) & (b)
D- company licensed under Sec 8
17. In case of OPC , the word ‘One Person Company’ shall be mentioned……….
A- In brackets
B- Below the name
C- Both (a) and (b)
D- None of these
T E
T I TU
18. A company incorporated on or after 2-11- 2018 and having a share capital shall not commence
any business or exercise borrowing powers unless a declaration in form INC-20A by a director is
filed within:-

I N S
A- 30 days from the date of incorporation.

SJ C
B- 180 days from the date of incorporation.
C- 60 days from the date of incorporation.
D- 75 days from the date of incorporation.
19. A declaration in Form INC 20 A by a director that :
A- Every subscriber has paid the value of the shares agreed to be taken by him
B- Every subscribers has paid 25% of the value of shares
C- Every subscribers has paid 50% of the value of shares
D- None of the above
20. Declaration in Form INC-20A has to be verified either by :-
A- CA
B- CS
C- Cost Accountant
D- Any of the above
21. The AOA provide that X be CS OF the company for first 3 years .but he was removed after 1 year
A- X has remedy against the company
B- X has no remedy against the company
C- X will claim reappointment as well as compensation
D- none of the above

60
22. The last 6 digits of CIN IS;-
A- Identity code
B- Year of Incorporation
C- Registration number
D- State in which the registered office situated
23. The AOA of PQR LTD provided that documents upon the company may be served only through
emails .A shareholder sent document by registered post.Can the company refuse to accept
A- Yes
B- No
C- partly true partly false
D- all are correct depending upon facts and circumstances
24. M ltd, a limited company change/ wants to convert 10 shares of Rs 10 each into 1 share of Rs
100 each. Which resolution is required
A- ordinary resolution
B- special resolution
C- only board resolution
D- any of the above
T E
T I
record of distributable profits for the last…………..
TU
25. A company can issue the equity shares with differential rights only if it has consistent track

A- 2 years
B- 3 years I N S
C- 5 years
D- 7 year SJ C
26. The equity shares with differential rights shall not exceed of the total post-issue paid up share
capital at any point of time:
A- 25%, pre-issue
B- 26%, pre-issue
C- 74%, of the Total Capital
D- 25%,post issue
27. ……… is required for issue of shares with differential rights as to dividend, voting or otherwise
A- A ordinary resolution
B- A special resolution
C- A unanimous resolution
D- A board resolution
28. The Company can buy-back its own shares out of—
A- Free Reserves
B- Securities Premium Account
C- Proceeds of preference shares
D- All of the above

61
 29. A shareholder can apply to NCLT against refusal to register transfer of shares
1. In a private company within from the date of application for registration of transfer, if
no reply is received.
A- 40 days
B- 60 days
C- 30 days
D- 90 days
2.In a private company within from the date of receiving notice of refusal
A- 40 days
B- 60 days
C- 30 days
D- 90 days
3.In public company;
(i)Within from the date of receiving notice of refusal appeal can be made to NCLT against refusal of
registration of transfer
A- 60 days
B- 30 days

T E
TU
C- 90 days
D- 45 days

S T I
(ii) Within from date of application for registration of transfer, if no reply is received
A- 60 days

C I N
SJ
B- 30 days
C- 90 days
D- 45 days
30. The offer u/s 62 shall be made within a time limit of at least and not exceeding from
date of offer within which the offer if not accepted, shall deemed to have been declined
A- 15 days,30days
B- 30 days;45 days
C- 15 days,45 days
D- 30 days; 90 days
31. Right issue of share capital to employee under ESOP Scheme u/s 62 are subject to ……………..
passed by company and by private company
A- Board resolution , special resolution
B- Board resolution , ordinary resolution
C- special resolution , ordinary resolution
D- unanimous BR for both
32. No offer of buyback shall be made within a period of----------------------
A- 1 year from the date of closure of preceding offer of buyback
B- 2 years from the date of opening of preceding offer of buyback

62
 C- 6 months from the date of closure of preceding offer of buyback
D- None of the above
33. The rights attached to the shares of any class may be varied with the consent in writing
of the holders of not less than Of the issued shares of that class.
A- one-half
B- one-third
C- Two-third
D- Three-forth
34. A company may issue preference shares only if it is authorised by………….
A- The Central Government
B- The Court
C- The Tribunal
D- Its articles
35. In case of transfer of shares , the share certificate shall be delivered by the company within……
A- 1 month of receipt of transfer deed
B- 1 month of effecting transfer of shares
C- 2 month of receipt of transfer deed
T E
I
D- 2 month of effecting transfer of shares
36. The buyback may be from---
T TU
I N
A- Existing shareholders S
SJ
B- Open market
C
C- Purchase of securities issued to employees
D- All of the above
37. As per the definition notified in the Gazette of India, an entity shall be considered as ‘start-up’
for a maximum period of :-
A- 3 years
B- 10 years
C- 7 years
D- None of the above
38. ‘ Equity Shares’ can never be repaid, except ………….
A- in case of buyback of shares
B- when there is an approved scheme of reduction of capital
C- Liquidation
D- all of above
39. Company shall physically destroy the securities brought back within of completion of
buy back
A- 6 days
B- 7 days
C- 8 days

63
 D- 9 days
40. Company cannot make further issue of same kind of shares within except;
A- 6 months, bonus issue
B- 6 months, Employee Stock Option Plan
C- 6 months, convertible preference debentures
D- All of the above
41. Under section 66; reduction of share capital, mode by limited company
A- Reduction in liability of members in respect of uncalled or unpaid capital
B- Returning excess paid –up capital
C- Both of the above
D- None of the above
42. For Reduction of share capital under section 66 following is to be complied
A- Special resolution in general meeting
B- Confirmation by NCLT
C- No arrears are outstanding in the repayments of deposits
D- All of the above

T E
43. Before confirming capital reduction under section 66, NCLT must ensure that:

I TU
A- claim of creditor has been discharged or secured
T
I N S
B- accounting treatment for capital reduction is conforming with AS under section 133
C- a certificate from Company’s auditor relating to clause b

SJ
D- all of the aboveC
44. As per section 2(30) of companies Act, 2013, debentures includes
A- Instruments referred to in Chapters III-D of RBI Act
B- money market instrument
C- Both of the above
D- None of the above
45. After completion of buyback, it shall file with Registrar and SEBI, a return in Form-------------
A- SH-9
B- SH-10
C- SH-11
D- SH-12
46. The instrument of transfer shall be in And the instrument shall be delivered to company
within from date of execution.
A- Form SH 2; 30 days
B- Form SH 3; 60 days
C- Form SH 4; 60 days
D- Form SH 4; 30 days
47. Out of the following which source cannot be used for bonus issue

64
 A- Free Reserve
B- Securities Premium
C- CRR
D- Revaluation reserve
48. Form no To be filed with ROC in case of alteration of share capital within days of alteration
A- SH-7 ; 30
B- PAS 3 ;30
C- SH-4;60
D- NONE OF THE ABOVE
49. Buyback upto 10% of paid up share capital & free reserves can be made:-
A- board resolution
B- Special resolution by postal ballot
C- either a or b
D- only Board resolution
50. A company cannot make buyback if default is made in repayment of deposits ;debentures ;
dividend ;term loan to & repayment of shares and ……………years have not elapsed
after the default was rectified
T E
TU
A- FI;banking company;preference shares;3 years

T I
B- FI;banking company;preference shares;1 year

S
I N
C- FI;banking company;preference shares;5 year
D- none of the above
C
SJ
51. Who cannot be appointed as debentures trustees
A- beneficially holds shares in the company
B- is a promoter, director or key managerial personnel or any other officer or an
employee of the company or its holding, subsidiary or associate company
C- is indebted to the company, or its subsidiary or its holding or associate company or
a subsidiary of such holding company;
D- all of the above
52. For creation of charge, it is the duty of borrower company whether its property is situated in or
outside India, to register the particulars of charge within _ with Registrar; in Form No.
(other than debentures) or (for debentures)
A- 30 days, CHG- I, CHG – IX
B- 30 days, CHG- IX, CHG – I
C- 30 days, CHG- I, CHG – 9 (Note: after Ordinance for N0V-19, 30 days will become 60
days)
D- 30 days, CHG- 9, CHG – I
53. If there is omission or mis-statement of any entry required to be entered in the register of
charges and is satisfied that it was accidental or due to inadvertence or due to some other
sufficient cause, or it is just and equitable to grant relief, it may make an order for rectification
of register of charges
A- The tribunal

65
 B- The Central Government
C- The court
D- The Registrar
54. When the loan is repaid fully with interest CHG 4 to be filed with ROC WITHIN 30 days from the
date of satisfaction. If not filed with ROC within 30 days CHG-4 to be filed with ROC within
A- 300 days from the date of payment
B- 60 days from the date of payment
C- 150 days from the date of payment
D- 120 days from the date of payment
55. In the above question if the CHG 4 is not filed within 300 days then the company can apply to :-
A- CG for extension of delay
B- ROC for further extension
C- NCLT for further extension
D- No further extension possible
56. The register of Charges shall be kept open for inspection during business hours
A- by any member /creditor without payment of fees
B- by any member /creditor after paying rs 10
T E
C- by any person on payment of fees

T I TU
D- both b and c are correct.

I N S
57. If meeting is called on request a certain members and the quorum is not present within half an

SJ
A- Adjourned C
hour from the time scheduled then the meeting shall

B- Postponed
C- Dissolved
D- All of the above are correct
58. The minutes books of the Board and committee meetings shall be preserved
A- For 3 years
B- For seven years
C- For eight year
D- Permanently
59. Dhumkzetu Ltd. is a company incorporated under section 8 of the Companies Act, 2013. It wants
to held its annual general meeting on 15th August at 3p.m. state whether the company
contravened any provision of the Act?
A- Yes. Annual general meeting shall not be held on public holiday.
B- No. Section 8 Company can hold its Annual general meeting even on national holiday.
C- No. Section 8 Company can hold its Annual general meeting even on public holiday.
D- Yes. Annual general meeting shall not be held on National holiday.
60. Explanatory statement is annexed to the notice for
A- Special resolution

66
 B- ordinary resolution
C- Board resolution
D- none of the above
61. Extra ordinary general meeting of a company can be held
A- sunday
B- Working day
C- National holiday
D- Both 'a' and 'b'
62. Every company limited by shares shall maintain the register of members in the Form
No………………….
A- MGT-1
B- MGT-2
C- MGT-3
D- MGT-4
63. The index shall not be necessary in case the number of members is less than………..
A- 20
B- 50
T E
C- 100

T I TU
D- 200

I N S
64. Where any declaration in respect of beneficial interest is filed with the company, the company
shall, within
A- 7 days C
file a return with the Registrar

SJ
B- 14 days
C- 15 days
D- 30 days
65. An individual who holds beneficial interest of not less than Or such other percentage as may be
prescribed , in shares of a company shall be termed as significant beneficial owner
A- 10%
B- 20%
C- 25%
D- 50%
66. Every individual who has acquired significant beneficial ownership in a company, shall file a
declaration in Form No…………….. to the company, within……….. of acquiring such significant
beneficial ownership
A- BEN-1; 30 days
B- BEN-1; 60 days
C- BEN-2; 30 days
D- BEN-2; 60 days
67. The registrar may, for any special resolution, extend the time for holding …………. By any period
not exceeding………………

67
 A- The first AGM; 3 months
B- Any AGM other than first AGM; 3 months
C- The first AGM; 6months
D- Any AGM other than first AGM; 6 months
68. In case the number of members as on the date of the meeting is , the quorum shall be
members personally present.
A- More than 1000 but upto 5000; 30
B- More than 5000; 30
C- upto 1000; 30
D- None of these
69. Quorum needs to be present………………
A- At the commencement of GM
B- At the time of passing each and every resolution
C- Both (a) and (b)
D- At anytime during the meeting
70. Any members is entitled to inspect the proxies deposited with the company only of
Notice is given to the company
T E
TU
A- 1 day’s
B- 2 day’s

S T I
C- 3 day’s
D- 7 day’s
C I N
SJ
71. In case the provisions relating to voting through electronic means apply to a company, the
scrutinizer(s) shall make, not later than of conclusion off the general meeting, a consolidation
scrutinizer’s report to the Chairman.
A- 3 days
B- 5 days
C- 7 days
D- 10 days
72. In case of a company having a share capital, a poll shall be ordered to be taken by the chairman
if a demand for poll is made by any member(S) present in person or proxy holding of the total
voting power or paid –up share capital of not less than or such higher amount as may be
prescribed.
A- 1/10th ;Rs 5 lakh
B- 1/5th ; 1 lakh
C- 1% ; Rs 5 lakh
D- 1%; Rs 1 lakh
73. In case of voting by postal ballot, the assent or dissent received after………….. from the date of
issue of notice shall be treated as if reply from the members has not been received.
A- 7 days
B- 15 days

68
 C- 30 days
D- 45 days
74. If special notice is required to move a resolution at a general meeting, then, the notice of the
intention to move such a resolution shall be given to the company not earlier than before the
date of the general meeting but at least …………… before the general meeting( excluding the day
on which such notice is given
A- 1month; 7 days
B- 3 month; 14 days
C- 6 month; 21days
D- 6 month ; 30 days
75. A resolution passed at an adjoined meeting shall be treated to have been passed on the date……
A- Of original general meeting
B- On which it was in fact passed
C- Either (a) or (b)
D- Either (a) or (b), as per the article
76. The minutes of Board meeting and Committee meeting shall be signed by…………

E
A- The chairman of the same meeting or the chairman of the next meeting

T
TU
B- The chairman of the same meeting or in the event of the death or inability of that

C- The chairman of the same meeting

S T I
chairman, by a directors duly authorised by the board for this purpose

I
D- The Company Secretary

C N
SJ
77. The minutes of every general meeting shall be signed by……………….
A- The chairman of the same meeting or the chairman of the next meeting
B- The chairman of the same meeting or in the event of the death or inability of that
chairman, by a directors duly authorised by the board for this purpose
C- The chairman of the same meeting
D- The Company Secretary
78. An annual general meeting may be called after giving shorter notice, if consent, in writing or by
electronic mode is obtained from:-
A- Majority in number of members entitled to vote
B- The members having not less than ninety- five per cent. Of the total voting power
exercisable at that meeting
C- Not less than ninety-five per cent of the number of the members entitled to vote
D- The members holding not less than ninety- five per cent. Of the paid-up share capital
of the company.
79. Annual return is filed in ………within …………of AGM containing the particular as prescribed as
they stood on…..
A- MGT 7;60 days ;close of financial year
B- MGT 8;60 days ;close of financial year
C- MGT -7;30DAYS;AGM DATE

69
 D- MGT -8;30DAYS;AGM DATE
80. Annual return is signed by ……….director/directors and then …………or where there is no ………….
By a CS in practise
A- director;CS;CS
B- DIRECTOR;CEO;CEO
C- CFO;CEO;CS
D- DIRECTOR;CFO;CEO
81. Annual return will be certified by a ………… if the company is a ……….. Company or a company
having paid up share capital of RS or turnover ……………..
A- CS in practice;listed company;10crore or more;50 crore or more
B- managing director ;listed company;50 lacs;2 crore
C- both a and b are correct
D- none of the above
82. Register of debenture holders to be preserved for ……… years
A- 6
B- 7
C- 8
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D- permanently
83. Register of members to be preserved for

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A- 6 years
B- 8 years
C I N
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C- 7 years
D- none of the above
84. An issuing house (share broker) has issued an advertisement in two leading newspapers for
selling a large number of shares allotted to it by a company under a private placement. In which
of the following conditions will the advertisement NOT be deemed to be a prospectus:
A- Advertisement was given within six months from the date of allotment
B- Advertisement was given after six months from the date of allotment and the issuing
house has paid the entire consideration to the company
C- The issuing house did not pay entire consideration to the company till the date of
allotment
D- advertisement was given within three month from the date of allotment
85. Which of the following statements is not true?
A- in case of shares, the rate of underwriting commission to be paid shall not exceed
five percent of the issue price of the share.
B- underwriting commission should not be more than the rate specified by the Article
of Association.
C- in case of debentures, the rate of underwriting commission shall not exceed five
percent of the issue price of the debentures.
D- amount of commission may be paid out of profits of the company.

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86. A shelf prospectus filed with the ROC shall remain valid for a period of:
A- one year from the date of registration
B- one year from the date of closing of first issue
C- one year from the date of opening of first issue
D- Ninety days from the date on which a copy was delivered to ROC
87. Shripad Religious Publishers Limited has received application money of ` 20,00,00 (2,00,000
equity shares of ` 10 each) on 10th October, 2019 from the applicants who applied for allotment
of shares in response to a private placement offer of securities made by the company to them.
Select the latest date by which the company must allot the shares against the application money
so received.
A- 9th November, 2019
B- 24h November, 2019
C- 9th December, 2019.
D- 8th January, 2020
88. Neptune Metal Tools Limited was incorporated on 2nd December, 2018 with twenty-five
subscribers and authorised capital of ` 50,00,000 (5,00,000 equity shares of ` 10 each). The
directors of the company are in a dilemma whether to issue share certificates to the subscribers

E
in physical form or in dematerialized form. Advise them correctly on this matter:

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A- Being an unlisted company, Neptune may either issue physical share certificates to

S T I
the subscribers or alternatively, issue them in dematerialized form.
B- Neptune needs to issue shares to the subscribers only in dematerialized form.

I N
C- A company having more than 100 shareholders needs to issue shares in

C
dematerialized form and therefore, Neptune may issue physical share certificates to

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the subscribers.
D- A company having authorised capital of fifty lakhs and above needs to issue shares
in dematerialized form and therefore, Neptune may issue physical share certificates
to the subscribers.
89. Rajesh Infrastructure Limited wants to issue preference shares for a period exceeding 20 years
for financing its proposed infrastructure project. On the basis of which statement, company can
do so?
A- Yes, the company can issue irredeemable preference shares by passing a special
resolution
B- Yes, company can issue preference shares for a period exceeding 20 years with the
prior approval of Central Government
C- Yes, the company can issue irredeemable preference shares for infrastructure
project
D- Yes, the company can issue preference shares for financing an infrastructure project
for a period exceeding to 20 years.
90. Every listed company shall file with the Registrar a copy of the report on each annual general
meeting within of the conclusion of the annual general meeting.
A- 7 Days
B- 30 Days
C- 60 Days

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 D- 90 Days
91. Swagat Hospitality Limited defaulted in the repayment of last two instalments of term loan
availed from National Commercial Bank. On 30th September, 2019, they cleared all the dues by
repaying it. When can it issue equity shares with differential voting rights?
A- Upon expiry of five years from the date on which the default was made good
B- Upon expiry of three years from the end of the financial Year in which the default
was made good
C- Upon expiry of five years from the end of the financial Year in which the default was
made good
D- Upon expiry of seven years from the end of the financial Year in which the default
was made good
92. Radha, the original allottee of 2000 equity shares in Murti Mechanical Toys Private Limited has
transferred the same to Ruchi. The instrument of transfer dated 21st August, 2020, duly stamped
and signed by Radha was handed over to Ruchi. Advise Ruchi regarding the latest date by which
the instrument of transfer along with share certificates must be delivered to the company, to
register the transfer in its register of members.
A- 21st August, 2020.
B- 20th September, 2020
C- 20th October, 2020.
T E
D- 19th November, 2020.

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93. Which companies can issue debenture with redemption period 30 years instead of 10 years

I N S
A- Companies engaged in setting up of infrastructure projects.

SJ C
B- ‘Infrastructure Finance Companies’ and ‘Infrastructure Debt fund Non-Banking
Financial companies
C- Company permitted by a Ministry or Department of the Central Government or by
Reserve Bank of India or by the National Housing Bank or by any other statutory
authority
D- all of the above
94. DRR can be created out of:-
A- profit available for payment of dividend
B- capital redemption reserve
C- issue of debentures
D- none of the above
95. A company created a charge against a loan on an interest @ 12% p.a. Rate of interest changes
due to fluctuation of RBI rate. The company did not file the modification details with the
Registrar. Is there any violation.
A- No violation, because it is not modification.
B- Yes company has to file
C- Company has to create a new charge
D- None of the above.
96. There are 5400 members of Annapurna Limited. The company held its annual general meeting
on 1st July 2017 at 2.00 p.m. And 28 members were present till 2.45 p.m. The Chairman of the

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meeting proceeded to initiate the meeting and passed the resolutions as discussed in the
meeting. Comment on the validity of the meeting.
A- Meeting is valid as required quorum is 15
B- Meeting is valid as required quorum is 2
C- Meeting is invalid as required quorum is 30
D- Meeting is valid as required quorum is 5

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