CA - INTERMEDIATE
CORPORATE & OTHER LAWS
GROUP I - PAPER 2
SERIES – 1
JAN. - 2026
VOL – 31
Date : 30.09.2025
Vidya Sagar Institute
K-50, Bhawna Tower, Income Tax Colony, Tonk Road,
Near Durga Pura, Bus Stand, Jaipur - 302018
Mobile :- 93514-68666 Ph. :- 7821821250, 7821821251, 7821821252,
7821821253, 7821821254. web : www.vsijaipur.com
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CA - INTERMEDIATE
GROUP I – PAPER 2
CORPORATE & OTHER LAWS
Series –1(Jan. 2026)
Batch : Volume 31 Date : 30.09.2025
Total No. of Questions: Part A & B Time - 3 Hours
Maximum Marks: 100
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Part “A” is compulsory
Part “B” Question No. 1 is compulsory.
Attempt any four questions from the rest.
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Part A
Total 30 Marks
Integrated Case Scenario/Multiple Choice Questions (Q1 – Q3)
A. Neo Technologies Ltd., a listed company was incorporated in the year 2010. It has a
share capital of ` 100 crore and turnover of ` 200 core. The company plans to raise
capital through private placement of securities during FY 2014–15. The Board
identifies 180 individual investors and passes a special resolution in the general
meeting. In the same financial year, the company also offers shares to 25 mutual
funds (Qualified Institutional Buyers) and grants stock options to its 30 employees
under an approved Employee Stock Option Scheme (ESOP). The manager of the
company objected to allotment of the shares as the total number of persons exceeds
the permissible limit provided under the law.
The company has its registered office in Mumbai, Maharashtra. The company
maintains its registers at the registered office by default. Last year the company
opened a branch office in Hyderabad, Telangana. The total shareholders on record of
the company are 21,000. Out of these, 2160 shareholders are residing in Hyderabad.
The management believes that maintaining the register of members at the
Hyderabad office is not a good idea as in order to maintain the register, atleast 1/4th
of the total shareholders should be living in Hyderabad.
In January 2025, the company decided to accept fresh deposits from its members.
The company in past has defaulted on the repayment of deposits to its members in
2019. The company faced many financial difficulties, but it successfully repaid all
outstanding deposits and interest by March 2021. So now the board of directors has
passed a resolution to accept ` 2 crore as deposit from its members.
On the basis of above facts and by applying applicable provisions of the
Companies Act, 2013 and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 1-3
of 2 marks each) given herein under:
1. Considering the applicable provisions related to private placement as given 2
under the Companies Act, 2013, which of the following statement is correct?
(a) The company has breached the 200-person limit, as the total number of
persons to whom securities are offered are more than 200 in a financial year.
(b) The company has exceeded limit of 200 persons across both types of
securities (excluding ESOPs).
(c) The company has not exceeded 200-person limit, because QIBs and ESOP are
excluded from the calculation of threshold limit of identified persons.
(d) The company must seek prior approval of SEBI for any private
placement involving QIBs.
Page 1 of 11
2 The company had defaulted on repayment of deposits but wishes to accept 2
deposits from its members again. What is a mandatory requirement before
doing so?
(a) The company must wait for three years after making good the default before
accepting new deposits.
(b) The company must obtain a statutory auditor’s certificate, confirming that the
default has been rectified, and five years have passed since then.
(c) The company can accept deposits immediately since it has repaid all previous
defaults, without requiring any additional approvals.
(d) The company must seek approval from the Registrar before accepting deposits
from its members, since only three years have elapsed from the date of making
good the default.
3 The board of directors are of view that they should maintain a register at 2
Hyderabad only if one-fourth of members are residing there. Do you agree with
the boards of directors’ view of not maintaining the register at Hyderabad?
(a) No, the company can maintain the register at the Hyderabad office without
passing any resolution, as the Companies Act allows to maintain register at any
branch office.
(b) Yes, the board needs to pass a resolution and notify ROC before maintaining
register at branch office if atleast 1/4th shareholders are living in Hyderabad.
(c) No, only after passing a special resolution in a general meeting, the register can
be maintained at Hyderabad because more than 10% of the members reside
there.
(d) No, the company cannot maintain registers outside the registered office under
any circumstance unless it is a foreign company.
Integrated Case Scenario/Multiple Choice Questions (Q4 – Q6)
B. Sunrise Technologies Private Limited ("STPL") was in process of establishing its new
software development center in Pune. On 28th February, 2024, the Board of
Directors passed a resolution to purchase a property consisting of:
A three-storey building
25 acres of agricultural land adjacent to the building
100 motor cars
An orchard with 100 fruit-bearing trees
The company received a government notification dated 15th March, 2024, requiring
all new technology centers to obtain special clearance within 45 days of
establishment. The notification mentioned that existing orders under the previous
Technology Parks Act (which was repealed and replaced by new legislation)
would continue to remain valid. The notification was to be served to all concerned
parties through registered post.
The Managing Director has approached you to understand various legal aspects
under the General Clauses Act, 1897.
On the basis of above facts and by applying applicable provisions of the General
Clauses Act, 1897, choose the correct answer (one out of four) of the following
Multiple Choice Questions (MCQs 4-6, of 2 marks each) given herein under:
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4 With respect to the property being purchased by STPL, which of the following 2
would not qualify as "immovable property" under the General Clauses Act,
1897?
(a) The orchard with fruit-bearing trees (b) Motor Cars
(c) The three-storey building (d) The agricultural land
5 The government notification requires clearance "within 45 days". If the 2
notification was received on 20th March, 2024, and the 45th day falls on
Sunday, May 4, 2024, what would be the last date for obtaining clearance?
(a) 3rd May, 2024 (b) 4th May, 2024
(c) 5th May, 2024 (d) 6th May, 2024
6 Concerning the previous orders under the repealed Technology Parks Act, 2
which statement is correct?
(a) All previous orders automatically become void
(b) Previous orders continue to be valid unless explicitly cancelled
(c) Previous orders require fresh validation under new law
(d) Previous orders are valid for only 6 months after repeal
7. Superior Textile Industries Limited appointed Swati, an independent 2
Chartered Accountant in practice, to be the scrutinizer for the remote e-
voting process. As regards taking assistance by Swati of a person who is well-
versed with the electronic voting system, which of the option out of
following four, in your opinion, is correct, considering the applicable
provisions:
(a) Since the process of scrutinising votes is a secret affair, Swati is prohibited
from taking assistance of any person in this respect.
(b) For discharging her functions as scrutinizer, Swati is permitted to take
assistance of a person who is well-versed with the electronic voting system
only if he is in the employment of Superior Textile Industries Limited.
(c) For discharging her functions as scrutinizer, Swati is permitted to take
assistance of a person who is well-versed with the electronic voting system
only if he is not in the employment of Superior Textile Industries Limited.
(d) For discharging her functions as scrutinizer, Swati is permitted to take
assistance of a person who is well-versed with the electronic voting system
whether or not in the employment of Superior Textile Industries Limited, but
the name of such person must be recommended by an independent director
included in the Board of Directors of Superior Textile Industries Limited.
8. A Limited made a public issue of debentures. The articles of the company 2
authorises the payment of underwriting commission at 2 per cent of the issue
price. The company has negotiated with the proposed underwriters, Sun
Brokers and has finalised the rate at 2.25 per cent. The amount that the
company is eligible to pay as underwriting commission is:
(a) 5% (b) 2%
(c) 2.5% (d) 2.25%
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9. The Annual General Meeting (AGM) of Green Limited was held on 31.8.2024. 2
Suppose the Chairman of the company after two days of AGM went abroad for
next 31 days. Due to the unavailability of the Chairman, within time period
prescribed for submission of copy of report of AGM with the registrar, the
report as required was signed by two Directors of the company, of which one
was additional Director of the company. Comment on the signing of this report
of AGM.
(a) Yes, the signing is in order as the report can be signed by any director in the
absence of Chairman.
(b) No, the signing is not in order as only the Chairman is authorised to sign the
report
(c) Yes, the signing is in order, as in the absence of Chairman at least two directors
should sign the report.
(d) No, the signing is not in order, since in case the Chairman is unable to sign, the
report shall be signed by any two directors of the company, one of whom shall
be the Managing director, if there is one and company secretary of the
company.
10. Green Tree Limited is planning to issue debentures to the public and, as per the 2
legal requirements, must appoint a debenture trustee before making an offer.
The company is considering several individuals for this role:
1. Mr. Sharma, who owns a small number of shares in Green Tree Limited as
an investor.
2. Ms. Kapoor, who previously lent ₹ 5,000 to Green Tree Limited and is
currently a lender.
3. Mr. Verma, who has provided a personal guarantee to ensure the
repayment of the debentures issued by Green Tree Limited.
Based on the provisions of the Companies Act, 2013 and relevant rules,
who among the following is eligible to be appointed as a Debenture Trustee
for Green Tree Limited?
(a) Only Mr. Sharma.
(b) Only Ms. Kapoor
(c) Only Mr. Verma
(d) None of Mr. Sharma, Ms. Kapoor or Mr. Verma are eligible to be appointed as
Debenture trustee of Green Tree Limited.
Integrated Case Scenario/Multiple Choice Questions (Q11 – Q13)
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 out 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 of the 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
Page 4 of 11
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.
11. For the purpose of cultural tours, approval of which Ministry is 2
required to be obtained?
(a) Ministry of Human Resources Development
(b) Ministry of External Affairs
(c) Ministry of Home Affairs
(d) Ministry of Commerce and Industry
12. For availing foreign exchange for studying abroad, which of the following 2
option is correct:
(a) The transaction of withdrawal of foreign exchange of USD 2,25,000 for
studying abroad is prohibited.
(b) The transaction of withdrawal of foreign exchange of USD 2,25,000 for
studying abroad requires prior approval of Government of India.
(c) The transaction of withdrawal of foreign exchange of USD 2,25,000 for
studying abroad requires prior approval of RBI.
(d) The transaction of withdrawal of foreign exchange of USD 2,25,000 for
studying abroad do not require prior approval of RBI.
13. The remittance of foreign exchange for arranging of cultural tour for the 2
students is an example of:
(a) Capital Account Transactions (b) Current Account Transactio
(c) Hybrid Transactions (d) Amortised Transactions
Integrated Case Scenario/Multiple Choice Questions (Q14 – Q15)
Greenfield LLP and Bluewave LLP were two thriving businesses operating in the
renewable energy sector. Greenfield LLP specialized in solar panel manufacturing,
while Bluewave LLP was known for its innovations in wind turbine technology. Both
companies saw a strategic opportunity to join forces and create a more
comprehensive renewable energy solution provider. They decided to merge into a
single entity, to be named EcoFuture LLP.
To facilitate this merger, the management of both companies proposed a scheme of
compromise and arrangement under Section 60 of the LLP Act. They approached the
Tribunal to sanction this scheme, which involved transferring all assets, liabilities,
and ongoing legal proceedings of both Greenfield LLP and Blue wave LLP to Eco
Future LLP.
The Tribunal reviewed the proposal and found that the merger scheme was designed
for the reconstruction and amalgamation of Greenfield LLP and Blue wave LLP. The
Tribunal issued an order under Section 62, sanctioning the scheme and setting forth
several provisions to ensure a smooth transition:
(i) All assets and liabilities of Greenfield LLP and Blue wave LLP were to be
transferred to Eco Future LLP.
(ii) Any ongoing legal proceedings involving either of the original LLPs would
continue under the name of Eco Future LLP.
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(iii) Both Greenfield LLP and Blue wave LLP would be dissolved without the need
for winding up. However, a few partners from Greenfield LLP were not in
favor of the merger. They dissented from the compromise and arrangement.
The Tribunal provided specific directions to ensure that their interests were
adequately addressed.
After the order was made, both LLPs had to file a certified copy of the Tribunal’s
order with the Registrar within 30 days for registration. Unfortunately, due to some
administrative delays, this filing was not completed within the stipulated time,
leading to penalties for both Eco Future LLP and its designated partners.
Answer the following MCQs in the light of the Limited Liability Partnership
Act, 2008
14. What authority does the Tribunal have when it sanctions a 2
compromise or arrangement under Section 60?
(a) It can only supervise the arrangement.
(b) It has no authority after sanctioning the arrangement.
(c) It can supervise, modify, and give directions for the arrangement.
(d) It can dissolve the LLPs directly without any conditions.
15. What penalty applies if an LLP fails to comply with the 30-day filing 2
requirement?
(a) Immediate dissolution of the LLP.
(b) A fine of `10,000 and additional penalties for continuing contravention.
(c) Suspension of all business activities.
(d) Revocation of the Tribunal’s order.
Page 6 of 11
Part-B
Question No. 1 is compulsory.
Attempt any four questions from the rest.
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1A. Innovative (P) Ltd., a start-up by a few qualified professionals, which was incorporated 5
in 2014. The company is booming and favouring the younger generation to work. The
Capital Structure of the company is as follows:
Particulars INR (Crore)
Authorised Share Capital
100,00,000 Equity Shares of ` 10 each 10.00
Issued, Subscribed and Paid-up Share Capital
50,00,000 Equity Shares of ` 10 each 5.00
Share Premium 1.00
General Reserve 3.52
Profit & Loss Account 1.58
The company decided to issue 30% sweat equity shares to a class of directors and
permanent employees to keep them motivated and partner in growth. Lock-in period
for sweat equity will be five years. For this purpose, a resolution in General meeting of
company was passed in this manner.
“The Resolution specifies 15 lakh sweat equity shares, Current Market price ` 25 per
share with a consideration of ` 5 per share to be issued to a class of directors and
employees.”
The company seeks your advice with reference to the provision of issue of sweat equity
shares under the Companies Act, 2013.
(i) Whether size of issue of sweat equity shares was appropriate?
(ii) Whether lock-in period was justifiable?
B. A Limited Company raised the secured deposit of ` 80 crore an 30th June, 2023 from 5
the public on interest @ 12% p.a. repayable after 3 years. The charges have been
created within prescribed time in favour of trustee of depositors against the deposit
taking following assets of the company as security:
Land & Building ` 55 crore
Plant & machinery ` 15 crore
Factory Shed ` 10 crore
Trade Mark ` 10 crore
Goodwill ` 15 crore
Decide on the validity of the charges created with reference to the provisions of the
Companies Act, 2013.
C. Mitali Diamonds Limited is a company engaged in the business of cutting, polishing and 4
trading of diamonds in and outside India. The company exports the diamonds to USA.
For the last five financial years, the foreign exchange earned by the company in
exporting diamonds is as under:
FY 2023-24 USD 1,25,000
FY 2022-23 USD 1,10,000
FY 2021-22 USD 95,000
FY 2020-21 USD 98,000
FY 2019-20 USD 93,000
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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?
2A. XYZ Limited is a company having a paid up equity share capital of ` 75 crore. Though it 5
was performing well in the recent years it suffered losses in the first and second
quarter of the financial 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:
Financial year ending 31st March Rate of Dividend declared
2019 20%
2020 15%
2021 15%
2022 15%
2023 30%
Examining the provisions of the Companies Act, 2013, decide the validity of the Board's
declaration of 30% interim dividend.
B. Johnson Limited goes for Public issue of its shares. The issue was over-subscribed. A 5
default was committed with respect to allotment of shares by the officers of the
company. There were no Managing Director, Whole time Director or any other
officer/person designated by the Board with the responsibility of Complying with the
provisions of the Act.
State, who are the persons considered as officers in default under the Companies Act,
2013. Examine who will be considered in default in the instant case?
C. Dream Builders Limited was engaged in the activity of building and selling budget 4
friendly apartments. It recently started a new project at Noida. Pending approval, the
builders started the construction work. On verification of documents, the Corporation
of Noida refused to sanction the permission and the Assistant Commissioner Mr. S
issued a demolition order, signed by him under his authority.
The builders filed an appeal at the court and stayed the demolition. After 6 months of
court trials, the verdict was announced in favour of the Corporation of Noida. Mr.
G, the present Assistant Commissioner initiated the demolition process.
The builders argued that the order was passed by Mr. S and since he is no longer in the
authority, the order stands cancelled and Mr. G cannot demolish the construction.
Referring to the provisions of the General Clauses Act, 1897, determine the validity of
the claim of the builders.
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3A. Dhiman Limited, is a company incorporated in India. Dhiman Limited is a leading 5
manufacturer of sports shoes. It has many subsidiaries, one of them being Best Shoes
Limited which is based in Morocco. Dhiman Limited is in the process of finalization of
the consolidated financial statements of the company for the year ended 31 March
2022. The accounts section of Dhiman Limited has requested the management of Best
Shoes Limited to provide its standalone financial statements to Dhiman Limited. The
subsidiary company prepares its financial statements in the local language of the
country and the same is provided to the Indian parent company. Further, audit of
financial statement is not required by the Best Shoes Limited under the Moroccan laws.
Advise, how would Dhiman Limited deal with the consolidation of such financial
statements.
B. Ashok, a director of Gama Electricals Ltd. gave in writing to the company that the 5
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.
Decide:
(i) Whether the contention of Ashok is valid.
(ii) Will your answer be the same if Ashok remains in U.S.A. for one month during the
notice of the meeting and the meeting held?
C. Explain how 'Dictionary Definitions' can be of great help in interpreting 4
/constructing an Act when the statute is ambiguous.
4A. Stallworth Ltd., a listed company having a paid up share capital of ` 11 crore with a 5
turnover of ` 100 crore had appointed an Audit Committee which recommended M/s
ANC & Associates, a firm of Chartered Accountants having such qualifications and
experience as is required for appointment as the auditor of the company. The next
Annual General Meeting (the AGM) was due on 30.09.2023. The Board disagreed with
the said recommendation of the committee and refer back to it for reconsideration. The
Audit Committee was adamant on appointing the above firm of the chartered
accountants.
Discuss in the light of the Companies Act, 2013:
(i) The course of action for Board of Directors to resolve the above deadlock. What
would be your answer, if above situation was that of filling the casual vacancy of
auditors?
(ii) The steps to be taken by the Board of Directors for appointment of auditors in
case there was no requirement of Audit Committee in the company?
B. XYZ LLP was registered under the Limited Liability Partnership Act, 2008 (LLP Act) 5
with a name that was later found to be identical to an existing company's name, XYZ
OPC Pvt. Ltd. This similarity was not noticed at the time of registration.
Explain the provisions of the Limited Liability Partnership Act, 2008, in respect of the
following:
(i) When the name of LLP is identical.
(ii) Formalities with the Registrar of Companies after name change of LLP.
C. What is interpretation? State the importance of interpretation? 4
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5A. MNO Ltd., a foreign Joint Venture Company having its established place of business in 5
India and following International Financial Reporting Standards (IFRS) and its financial
statement being prepared in German language desires to know the following with
regard to submission of its financial statements to the Registrar of Companies in India.
Its area office is located at Mumbai:
(i) Submission of financial statements in German Language;
(ii) Format of financial statements as per IFRS;
(iii) How authentication of its financial statements is to be done?
(iv) Whether the documents can be submitted at the Registrar's office at Mumbai?
B. Amit and Priya are partners in XYZ LLP, a consulting firm. Recently, Priya moved to a 5
new address but forgot to notify the LLP within the required period. A month later,
Amit’s cousin, Ramesh, expressed interest in joining XYZ LLP as a partner, and after a
few discussions, he was accepted as a new partner.
However, XYZ LLP did not immediately update the Registrar of Companies (RoC)
regarding Priya’s address change or Ramesh’s admission as a partner. Two months
after Ramesh joined, the LLP filed a notice with the RoC about these changes.
Advise the LLP about the default on part of LLP about the non-compliance in respect to
not informing the ROC about:
(i) Priya’s address change
(ii) Ramesh’s admission as a partner.
C. Mrs. Neelu Chandra was director in Laddoo Sweets Private Limited. Once while dealing 4
with supplier of raw materials for company, she agreed to get some secret commission
from supplier for making the deal. Afterwards, on finding the facts, the company has
filed the suit against Mrs. Neelu Chandra. She contended that section 166 of the
Companies Act, 2013, provides “A director of a company shall not achieve or attempt to
achieve any undue gain or advantage either to himself or to his relatives, partners, or
associates and if such director is found guilty of making any undue gain, he shall be
liable to pay an amount equal to that gain to the company.” She contended that section
166 is applicable to male director only, she being female will not be liable.
In the light of the provisions of the General Clauses Act, 1897, decide whether she is
bound by the provisions of section 166 of the Companies Act, 2013?
6A. XYZ Limited has during the financial year 2019-20, made private placement of 5
15,00,000 equity shares of `10 each at a issue price of `15 per share as below.
(i) No approval of the shareholders has been obtained for the private placement.
(ii) The subscription amount was deposited in the current account of the
company and was utilized before allotment.
(iii) The private placement is made to 230 persons including 10 qualified
institutional bidders.
(iv) Out of 70 persons to whom private placement is made 10 persons have paid
the subscription amount in cash.
State the provisions of the Companies Act, 2013 and the Rules made thereunder and
opine if the company has complied with the provisions in respect of the above.
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B. Mr. Raghav entered into an agreement to purchase a commercial property located in 5
Bengaluru from Zenith InfraTech Ltd. However, during the registration process, he
discovered that the title deed was encumbered. The company refused to transfer the
title, claiming that Mr. Raghav should have been aware of the existing charge on the
property. Evaluate whether Zenith InfraTech Ltd.'s claim is legally valid. Give your
answer as per the provisions of the Companies Act, 2013.
OR
The paid-up share capital of Golden Shoes Limited is ` 25,00,000 divided into 2,50,000 5
equity shares of ` 10 each. Some of the shareholders holding 2,500 equity shares are
residents of London for whom a foreign register of shareholders is opened thereat on
November 1, 2022. Advise Golden Shoes Limited, within how much time after opening
of ‘foreign register’, it is required to file with the Registrar of Companies, a notice of
situation of the London office.
C. Ravi, an Indian citizen, works as a software engineer for an international company. 4
During the previous financial year (2023-2024), Ravi resided in India for 200 days.
However, in April of the current financial year, he accepted a job offer in Canada and
left India with a long-term work visa, planning to settle in Canada indefinitely.
Analyse the residential status of Ravi for the financial year 2024-2025, as per the
provisions of the Foreign Exchange Management Act, 1999.
==================
https://meet.google.com/qak-vxcy-dcn
LIVE GUIDANCE BY DR CA R C SHARMA SIR
For CA INTERMEDIATE AT 8:00 PM On 30.09.2025
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