Paget Lead al Al COMMERCE KE LIYE HAMESHA PRATHAM INTERMEDIATE COURSE — TEST SERIES FOR JAN. 2025 EXAM PAPER 2 ~ CORPORATE AND OTHER LAW. Day. Saturday Marks: 100 Date: 14" December, 2024 Time: 3 hours (Reading Time 15 mins Extra) IMPORTANT INSTRUCTIONS: (1) The question paper comprises two parts, Part 1 and Part Il. Part | comprises Multiple Choice Questions (MCQs). Part comprises questions which require descriptive type answers (2) Part 1-30 Marks Comprises 15 MCQ all are compulsory to solve. (3) Part 11- 70 Marks comprises 6 questions. Answer to Question No. 1 which is compulsory and any 5 ut of the remaining 6 questions Part |: Multiple Choice Questions (MCQs) > CASE SCENARIO 1: Mr. S, 2 well experienced technocrat in the field of manufacturing of computer hard discs and mother board. He resigned from his job and wished to form an LLP with the object of manufacturing and trading of Computer hardware. He wanted to include his close friends Mr. A, Mr. B, and Mr. C who are very familiar in the same field and worked in the foreign companies also, Al three friends had accepted the invitation of Mr. $ to be partners of the LLP. Mr. $ wanted to ensure whether all the three friends are resident of India and requested them to provide the details of their stay in India. During the previous financial year, Mr. A has stayed in India for a period of 170 days, Mr. B stayed in India for 110 days and Mr. C stayed in India for 100 days. All the partners had given their consent to act designated partners. He applied for the reservation of desired name to the registrar also paid the prescribed fees ‘Based on the above given scenario answer the following questions: Q.1. The name applied for has been approved by the Registrar. The approved name of LLP shall be valid for a period Of nnn 0m the date of intimation by the in Registrar, fa) 1 month {b) 2 months {(c} 3 months (4) 6 months [2 Marks} 1.2. Which of the following combinations of partners, if appointed as designated partners, will not be in accordance withthe provisions laid down by LLP Act, 20087 (a) Me BandMr.C — AB)MrA,Mr.BandMr.C —(e)Mr.AandMr.C (4) Mr. Aand MiB [2 Marks} Q3, In how many days, a Limited Labilty Partnership shall file with the Registrar, the particulars of every individual ‘who has given his consentto act as designated partner? {a) Within thirty days of his appointment Jb) Within thity days of incorporation of LLP {c) After forty-five days of incorporation of LLP (4) After sixty days of his appointment [2 Marks}Page (2 as. as. CASE SCENARIO 2: Progressive Management College have introduced a Global Management Diploma Course which is of 12 ‘months duration. Out of 12 months, 11 months studies are held in India and rest of 1 month is earmarked for foreign tour. Rudra Pratap is the Principal of the college. After taking requisite permission from the competent Ministry, the cultural tour programme was chalked aut and the team visited Malaysia, Singapore, Australia and New Zealand Rudra Pratap’s daughter Payal ‘got admission in a medical college situated in California, United States of ‘America, For fee and other expenses, Payal needs USD 2,25,000. Rudra Pratap contacted his banker to know the procedure for availing of foreign exchange and the authority to whom he shall apply. His banker properly {guided all the relevant procedures for availing ofthe foreign exchange Rudra Pratap’s brother Sourya Pratap went to UK some years ago, where he joined a company in managerial Position. He intermittently visits to India and maintains a Non-Resident Special Rupee Scheme Account (NRSR) in Mumbai, He wanted to make remittance of interest earned in the NRSR Account and asked his bankers for the required formalities, Based on the above given scenario answer the following questions For the purpose of cultural tours, approval of which Ministry is required to be o obtained? {a) Ministry of External Affairs (b) Ministry of Human Resources Development (c) Ministry of Home Affairs —(d) Ministry of Commerce and industry [2 Marks} For availing foreign exchange for studying abroad, which ofthe following option is correct (a) The transaction of withdrawal of foreign exchange of USD 2,25,000 for studying abroad requires prior approval of Government of india. (b) The transaction of withdrawal of foreign exchange of USD 2,25,000 for studying abroad is prohibited. Ae) The transaction of withdrawal of foreign exchange of USD 2,25,000 for studying abroad requires prior approval of RBI (a) The transaction of withdrawal of foreign exchange of USD 2,25,000 for studying abroad do not requires prior approval of RBI [2 Marks} ‘The remittance of foreign exchange for arranging of cultural tour for the students is an example of: Ufa) Current Account Transaction (b) Capital Account Transaction (c) Hybrid Transaction (4) Amortised Transaction [2 Marks} CASE SCENARIO 3: Combat gaming limited Is a company incorporated outside India with a place of business in Rajasthan, To improve its gaming software the company wanted to apply Artificial Intelligence technology, In order to raise more funds to meet out the investment cost, the company decided to issue shares. It issued prospects of the ‘company which was properly dated and signed according to the provision of Companies Act 2013 and deliver them to the registrar of companies on 16 8.2023. The Registrar on verification of the documents found that ‘the particulars in the prospectus was incomplete and Issued a notice to the company saying that the prospectus is invalid, Hence, the directors scrutinized the documents and during the scrutiny it was observed by the CFO that there was a mistake in one of the documents delivered to the Registrar and hence altered that ‘on 28th September 2023. Based on the above given scenario answer the following questions: EKATVAM[2 Marks} QB, Combat Gaming Limited has mad Registrar of Companies by (2) 3th November —_sf29th October © alteration in documents delivered to the Registrar, they shal intimate to (c)28th November (4) 8th October [2 Marks) 9. Combat Gaming Limited has to deliver the ‘equired documents along with the appropriate fees to (2) The Comptroller and Auditor General Office, New Delhi (b) The Registrar of Companies, Rajasthan |The Registrar of Companies, New Delhi (4) The Company Law Board, New Delhi [2 Marks) > CASE SCENARIO 4: Company. ne of the depositors Mr. ¥ was in urgent need of money as his son wanted to pursue his higher education broad His total depost with ABC Publications Limited was € 10 lakhs. On ist une 2022, he sent hs requen to the company asking for premature repayment of his deposit along with interest Another depositor Mr. U had deposited 6 lakhs in his name. On 18th September 2022, he sent an application to the company to change the name on his deposit and make ita joint holding inthe names of himvelf. hs wife and two children. The company is contemplating the request received from its depositors, In addition to the deposits recelved from the public, the Company had aso ralsed funds by amount received {rom 2 Public Sector Bank, by issue of bonds and debentures and amounts agains issue of commercial papers ‘which were issued according to the guidelines ised by the Reserve bank of india. Based on the above given scenario answer the following questions: ‘9.20. Advise ABC Publications Limited regarding the amount and the interest that canbe repaid to Mr. (2) The Company can prematurely repay the deposit along wth interest @ 10% fora period of 13 months (1st May 2021 to 31st May 2022) (b)The Company cannot make premature repayment ofthe deposit, {c) The Company can prematurely repay the deposit along with interest @ 9% for a period of 13 months (1st May 2021 to 31st May 2022) (4) The Company can prematurely repay the deposit along with interest @ 9% fora period of 11 months (Ist May 2021 to 31st March 2022) [2 marks)Page |4 Q.11, Advise ANC Publications Limited regarding the request of Mr. U (a) The deposits can be held jointly only by Mr. U and his wit (b) Mr. U cannot change his deposit to joint holding (6) The deposits can be held jointly by Mr. U, his wife and two children 2 Marks (4) The deposits can be held jointly by Mr. U and any two members only ti } .12, The Banker of ABC Publications Limited wanted a list of deposits accepted by the Company. Advise the Company on what among the following constitute deposit (4) Any noninterest bearing amount received and held in trust (b) Amount raised through bonds and debentures ublic dfrom (c) Amount « (4) Amount raised through the issu bonds and debentures, of commercial paper as per RBI guidelines and amount raised through [2 Marks} INDEPENDENT McQs: Q.13, Super Brain Coaching Limited was engaged in offine coaching of students for various competitive examinations, t was one of the pioneer in its field. It suffered losses due to various social and government Festritions imposed on study centers. On account of this, it defaulted in the repayment of term loan for the first two quarters ofthe, financial year 2023-24. However, Super Brain Coaching Limited adapted itself to the hanging circumstances and shifted to online mode of coaching and revived its financial conditions, On 31st December 2023, it cleared all the dues and regularized the term Joan, Super Brain Coaching Limited wants to ‘ssue equity shares with differential rights. When can the Isue be made? (b} On or after January 1st 2029 (0) On or after April 1st 2029, (4) On or after January 1st 2027 (c} On or after April st 2027 [2 Marks) 9.14. An Act has been passed by the government and though sufficient time has elapsed since the Act was passed, it has not been brought into force by the Government, Which of the following Is correct in the light of the provisions of the General Clauses Act, 1897? (0) The court can through a writ direct the government to consider the question as to when the Act should begin to operate, (b) The court can issue a mandamus with a view to compel the government to bring the Act into operation on «a particular day (c) The court can publish a date in Official Gazette as an effective date for enforcement of the Act. {4) The court cannot direct tile government to consider the question as to when Act should begin to operate (2 Marks} With reference to the provisions of the General Clauses Act, 1897, In all Legislations and Regulations, unless there is anything repugnant in the subject or context, words importing the masculine gender shall be (a) To exclude boy child (b) To exclude female (c} To exclude girl child (4) To include female Qs. [2 Marks} KAT VAM(b) cc) Page |S Part II: Descriptive Questions (70 Marks) Answer to Question No. 1 which is compulsory and any 5 out of the remaining 6 questions The paid-up share capital of Star Furnishing Limited is Z 1,00,00,000 divided into 10,00,000 equity shares of 10 each as at 31st March, 2024, Out of this, Home Decor Limited is holding, 6,00,000 equity shares and the remaining equity shares of 4,00,000 held by others. Simultaneously, Star Furnishing Limited is holding 7% equity shares of Home Decor Limited out of which 2% equity shares are held as a legal representative of a deceased member of Home Decor Limited. On the basis of the given information, examine and answer the following queries with reference to the provisions of the Companies Act, 2013: (i) Can Star Furnishing Limited make further investment in equity shares of Home Decor Limited during 2024-257 (ii) Can Star Furnishing Limited exercise voting rights at the Annual General Meeting of Home Decor Limited? A [5 Marks] Naveen Tools Ltd (NTL) mortgaged its factory land and building (by equitable mortgage) on 198 March, 2023 to Goodwill Bank and availed a credit limit of € 200 lakh. Although the credit limit was sanctioned by the Bank, but the NTL actually availed such credit facility only in the month of August, 2023, when it issued a cheque in favour of a creditor towards the payment of raw material purchased from it. During the course of statutory audit, the auditor pointed out before the management of the NTL about the non-compliance of registration of charge with the Registrar within the stipulated time. The ‘company officials informed that although the mortgaged backed credit limit was sanctioned in March, 2023, but the company had not availed the facility till the month of August, 2023. So, the liability of registration of charge arises from the date of availment only when the company issued a cheque from the mortgaged backed credit limit account and not when the loan was sanctioned and credit limit was assigned. ~ Further, the company management pleaded that itis the responsibility of the financier i.e. Goodwill Bank to get the charges registered with the Registrar since the registration of charge Is to be effected in favour of the Bank and for Bank’s own benefit, so the NTL is in no way responsible for getting registration or for delayed registration, In the light of above facts, referring to the provisions of the Companies Act, 2013, (i) When trigger point for the registration of charge shall arise, {a) at the time of credit limit sanctioned by the Bank; or (b) at the time of availing of credit limit when cheque was issued by the company? (li) What are the consequences for non-registration of charge on the Naveen Tools Ltd? [5 Marks] Explain the rule which suggests that the ‘Plain word requires no explanation’ and “Technical words be understood in technical sense only’. [4 Marks} EKATVAMa2 4a) (b) 4a a3. fa) na Page |g Stutl Ceramic Pvt.Ltd. (SCPL) mariufactures creckery items which are Predominantly used only by the lormestie household customers, Now the! Gompanviweetsito expedite oe OF operation to all types of crockery items and cutlery for the use of big hotels, For this expansion plan, the company needs funds of around 500 lakh, The company does not want to convert itself from ctheraicobanY to Public company since the promoters do not want to dlluke their equity stake otherwise the public company have the option to raise the fonds: through public issue. The company renee’ the other avenue of ralsing funds by issue of right shares to the existing shareholders, however only 100 lath could be generated, The by increase their exposure in the company. manufacture Referring to the provisions ofthe Companies Act, 2013, advise the SCPL, whether the Company can raise further funds through p limit of allotment of securities? [5 Marks} (0) Dolls Toys Limited is having a net worth of 320 crore, eserves and security premium of 110 crore and tu Wants to accept deposits from public other than its Companies Act, 2013, state whether Dolls Toys Lim Public other than its members, (i) _ tts further mentioned tint-bolls To aid up share capital of 200 crore, free mover of 300 crores. Dolls Toys Limited members. Referring to the provisions of the ‘ted is permitted to accept the deposits from aPage |7 (6) Gi M/s Right Trading Limited is a company engaged in trading of automobile spare parts. During er the current financial year 2024-25, Mr. J the CFO retired due to bad health. The Company appointed Mr. C as the new CFO. On verification of the financial statements and statutory returns of the Company, Mr. C advised the Board of M/s Right Trading Limited to revise the financial statements for the years 2021-22. Examine, with reference to the applicable provisions ofthe Companies Act, 2013, whether M/s Right Trading Limited can do so? Eber past 9 years. Now due to the upcoming AGM and in fed. One of the Mli]”-M/s DEF is conducting the audit of M/s Right Trading Limited for the the requirement of Rotation of Auditors, M/s DEF is going to retire at its place M/s XYZ will be appointed as the Auditor of M/s Right Trading Limit partner Mr. F, who was in charge ofthe certification ofthe financial statements of the company retired from the firm of M/s DEF and joined the firm of M/s XYZ Examine, considering the provisions of the Companies Act, 2013 about the validity of the [2 Marks) appointment of M/s XYZ. ob ina software company in the USA. She went to USA and she purchased a house in USA for her residence. Then due ia and joined a software company in India. As she had ‘SA and deposited the rent in her account in USA. Out Mss. Rose was an Indian citizen who got aj stayed there for 12 years. During her stay, to some personal issues she moved back to Indi: moved back to India, she let out her house in U of that amount, she purchased another house in USA. Based on the above facts, answer the following referring to Management Act, 1999. (i) Whether Ms. Rose can purchase the house in USA and continue to retain it even 2 to India? ‘Whether Ms. Rose can purchase another hous the provisions of the Foreign Exchange ster returning 1 in USA after returning to India? [4 Marks} a company having a paid-up equity share capital of % 75 crores. Though it was performing well in the recent years it suffered losses inthe ist and second quarter ofthe financil year 2023-2024. In order to sustain its image, the Board of Directors declared an interim dividend at the rate of 30 percent on the paid-up equity share capital on 4/10/2023. The following are the ‘additional information extracted from the books of account for the past 5 Financial Years: XYZ Limited Financial year ending 31st March | Rate of Dividend dectared | 2019 20% 2020 15% 2021 15% a Bae Cr sia 15% he ‘Examining the provisions of the Companies Act, 2013, decide the validity of the Board's declaration of 30% interim dividend. [5 Marks] Cala(b) 0. Qs. ta) to) (d Page| M/s Strong Steels Limited Liability Partnership firm was incorporated on 01.04.2010 with ten Partners, The LLP had very good business and made considerable profits during the past years. Recently due to obsolete practices, M/s Strong Steels Limited LLP started making loss. Also, M/s Strong Steels Limited LLP did not file its annual returns from 2020-21. Three partners decided that the LLP be wound up by the Tribunal, The remaining partners objected to it. Referring to Section 64 Of the Limited Liability Partnership Act, 2008, can the Tribunal pass an order to wound up M/s Strong Steels Limited LLP? Also state the provisions and penalty for not filling annual return with the Registrar. [5 Marks] (1) What is the purpose of inclusion of “definitions” of certain words and expressions in the body of any statute? (i) The definition sometimes includes the words ‘mean’, ‘include’, ‘means and include’ and ‘to apply to and include’. What is the meaning of such words? [4 Marks) Sanjana joined a company named as Designers Cloths ) Ltd. as an Independent Director. In order to know more about the company, she wanted to inspect the books of account and minutes books of the Board Meetings held during the previous three years. The company is keeping the books of account and other records at its Registered Office, which is at Mumbai whereas Sanjana resides in Kolkata, Therefore, through power of attorney, Sanjana authorised her friend Avantika, who is a Chartered Accountant and does practice in Mumbai, to make an inspection of the books of accounts ‘and minutes books of the meetings of the Board, Giving the relevant provisions of the Companies Act, 2013 and its Rules, examine, whether Avantika ‘can make inspection on behalf of Sanjana. [5 Marks} A,B, Cand Dare the partners of Alpha LLP and have equal share in 5 the profits and losses of the LLP. ‘Anas made an agreement to transfer 70% of his share in the profits of Alpha LLP to his daughter X. X wanted to access information about the trading transactions of Alpha LLP claiming that she is entitled to the information as she receives a percentage of profits from the LLP. The partners refused to grant her access. Does X have any remedy against the denial according to the provisions of the Limited Liability Partnership Act, 2008? Are the partners correct in denying access to X? [5 Marks} (W) Ina contract of sale, Mr, A fraudulently sold certain 4 unmarketable goods to Mr. 8. Now Mr. A Js liable for the fraudulent activity under both The Indian Contract Act, 1872 and the Sale of Goods Act, 1930, State the provision as per the General Clauses Act, 1897 as to whether his. offence is punishable under the both the Acts? (i) Mr. P bought a car from Mr. G who was his friend. Mr. P did not check the car or test drive it. Whether the purchase made could be said to be made in good faith? Explain with reference to the provisions of the General Clauses Act, 1897. [4 Marks]a6, (a) to Muge|s Silk Tele Linited is» company wich Ws Incarpionated 0 Hnicla K halle two subsidiaries: Print Linnie (inv which it holes 0% cf shaves) and Stitch Limited (a whally owned subsidiary). Bath the subsidiaries are Wee Fetraardin led outside India The Howd of Directors of Sik Textile Lined intends to call an V General Mesting (GN) of Silk Textile Livnited, uring the rie time, the Board of Lrnited also wanted 10 fald an FGM a urgent basis at Dubial. The Chairrnian with the ¢ Bowd wanted (0 hold the FGM of Silk Textile Linied at Dubai so that fe can attend both the EGM, went of bis ut the Company Secretary advised the Chairman that he cannot hold the £GM outside india Referring 10 the provisions af the Companies Ael, 2014, advise the Board of ite followin on the () Whether the Board of Sik Textile Limited can hold its FGM at Dubai? (li) Whether the £GIM of Print Linitod ean be held at Dubai? [5 tarks) on Creative Ten\iles (1d. is an unlisted public company. the company’s paid-up share capital ® 50 lakh wonstating of 5 Lakh shares having face value of € 10 each, Marna is having $0,000 shares in the company: He isnot happy with Somnath, who Isa director in the company, He believed that Somnath | acting against the interest of the Company, Karman wanted to remove Somnath from the ditectorship. Removal of a person from the directorship requires the approval af the sharebolders in the general meeting. The Annual General Mocting (AGM) of the company has recently beer concluded and the rent AGM will be held in the next year. Considering the case and relerring to the Provisions of the Companies Act, 2013, advise () Gan Rarnan as an individual shareholder make a requisition 10 the company for calling of the Extraordinary General Meeting. for putting such resolution? (1) Hh the Company does not call the £GM on the requisition af Raman, whether Raman can himself call the Eom? [5 Marks) Beauty Counetics, a company incorporated in Korea has established & its branch office in Chennai for Conducting its business in india The structure of paid-up share capital of Beauty Cosmetics as at 31/08/2024 is a2 below: ‘The Company does not have any Preference Share Capital, Equity share capital held by Mr. L, an Indian citizen 10% Equity share capital held by Mr. A, an indian Citizen: 20% Equity share capital held ‘by Fairness Coumetics Limited, an Indian company. 20% You being 2 Chartered Accountant are asked ‘10 explain with reference to the provisions of the Companies Act, 2013 (i) whether Heauty Cosmetics shall be deemed to be a Foreign Company or an Indian Company for the business carried on by it in india and (i) for the business carried on by it in india, will it be required to comply with the relevant provisions of the Companies Act, 2013 as fit is an indian Company? [5 Marks)J Page | 10 ‘Mitali Diamonds Ltd. is a company engaged in the business of cutting, polishing and trading of diamonds in and outside India. The company exports the diamonds to USA, For the last five financial vars, the foreign exchange earned by the company in exporting the diamond are as under: FY 2023-24: USD 2,25,000 FY 2022-23: USD 1,10,000 FY 2021-22: USD 95,000 FY 2020-21: USD 98,000 FY 2019-20: USD93,000 The Company wants to give donation of USD 10,000 to an institution situated in USA which provides technical support and training in the field of cutting and polishing of raw diamonds. This will help the company in guiding its own employees, posted in USA to get the requisite training. Referring to the provisions of the Foreign Exchange Management Act, 1999, state whether the Company can give donation to such institution in USA? [4 Marks} Fox