Mock Test Paper - Series I: March, 2025

Date of Paper: 10th March, 2025

Time of Paper: 10 A.M. to 1 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.

PART I – Case Scenario based MCQs (30 Marks)

Part I is compulsory
Case Scenario 1
New Limited, a listed entity, passed a resolution in its Board meeting for the
appointment of Verma & Associates, Chartered Accountants, as the statutory
auditor of the company. The company obtained written consent from Verma &
Associates and placed this recommendation before the Annual General Meeting
(AGM) of shareholders, where it was duly approved. After securing approval, New
Limited informed the firm of their appointment and filed a notice of appointment with
the Registrar of Companies within the prescribed time.
Verma & Associates has three partners: A Verma, B Verma, and C Verma. The firm
also take services of two persons, Dev Verma and Mia Verma, who work on a case-
to-case basis and are not on a fixed salary.
It is also informed that prior to this appointment, Agrawal Verma & Associates was
serving as the statutory auditor of New Limited. This firm had six partners: Shrey
Agrawal, Alam Agrawal, Vishal Agrawal, Vyom Agrawal, Dev Verma, and Mia
Verma. Notably, Dev Verma and Mia Verma were common members in both Verma
& Associates and Agrawal Verma & Associates.
While working with New Limited, Verma & Associates started facing severe
disagreements with the management regarding certain financial reporting matters
and governance issues. As a result of these persistent disputes, the firm decided
to resign as the statutory auditor.
Meanwhile, New Limited was also required to hold its Annual General Meeting
(AGM) within the prescribed period, ensuring compliance with the legal provisions
regarding financial reporting, auditor appointments, and shareholder approvals.
However, due to internal conflicts and auditor resignation, the company faced
challenges in adhering to these timelines.
Additionally, New Limited decided to shift its registered office from Mumbai to
Bengaluru for operational efficiency. The company passed a Board resolution for

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the change and later obtained shareholder approval in the AGM. However, due to
an oversight, the filing of the notice of change of registered office with the Registrar
of Companies was delayed. As a result, several important communications,
including regulatory notices and shareholder correspondence, were being sent to
the Mumbai office, causing disruptions in company operations.
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 1-5, of 2 marks each) given
herein under:
1. The newly appointed CA Firm (Verma & Associates) and retiring CA Firm
(Agrawal Verma & Associates) have common persons i.e., Dev Verma and
Mia Verma. Whether the appointment of Verma & Associates in New Limited
is valid as per the provisions of the Companies Act, 2013:
(a) It not valid since both the CA Firms (New and Old) have common
persons
(b) Dev Verma and Mia Verma are working on case-to-case basis in Verma
& Associates and are not the partners, hence appointment of Verma &
Associates, is valid
(c) Verma & Associates should expel Dev Verma and Mia Verma in order to
retain its appointment
(d) Agrawal Verma & Associates should expel Dev Verma and Mia Verma
2. What would have been the position if, Dev Verma and Mia Verma are partners
in Verma & Associates:
(a) The position will remain same as MCQ 1 above
(b) There shall be no change and the Verma & Associates may continue as
audit firm
(c) The appointment of Verma & Associates would not have been in terms
of the provisions of the Companies Act, 2013
(d) The company may obtain permission from the shareholders in the
general meeting by way of Special Resolution for continuation of
appointment of Verma & Associates
3. In the given case, Verma & Associates due to some dispute with the
management on some issues resigned from the company. Choose the correct
option in respect to filling of this vacancy:
(a) Verma & Associates cannot resign and has to hold the office till the
conclusion of the next annual general meeting
(b) The resignation is tendered by the auditor, the Board of Directors shall
appoint new auditor within 30 days and such appointment shall also be
approved by the shareholders in the general meeting within 3 months of
the recommendation of the Board
(c) This vacancy of auditor can be filled by the shareholders in consultation
of the Central Government
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 (d) This vacancy of auditor can be filled by the Board of Directors in
consultation of the Comptroller and Auditor-General of India
4. AGM of New Limited could not be held within the prescribed time limit. Choose
the correct statement in this case.
(a) The company can postpone the AGM indefinitely until internal conflicts
are resolved.
(b) The company can apply to the Registrar of Companies (RoC) for an
extension and Registrar can do so for a period not exceeding 3 months.
(c) The Board should reappoint Verma & Associates if they agree to
withdraw their resignation and then conduct the AGM by 31st January of
the following year.
(d) The company must approach the National Financial Reporting Authority
(NFRA) for extension of date of AGM.
5. If New Limited wants to shift its registered office from Maharashtra (Mumbai)
to Karnataka (Bengaluru), which of the following is required?
(a) Board approval only.
(b) Only shareholder approval in a general meeting.
(c) Approval from the Regional Director along with copy of proposed
alteration in memorandum, copy of Board’s resolution and Minutes of
general meeting authorising the change from one state to another.
(d) No approval is required.

Case Scenario 2
Studies LLP was incorporated on 15 th April, 2024, with Prem, Pramod, Naveen, and
Vimal as partners. Among them, Prem and Pramod were designated partners. The
LLP was established for the manufacturing and trading of toys, and its business
operations were progressing smoothly.
However, on 30th April, 2024, an individual named Samudra filed an application
with the Registrar of LLPs, claiming that he owned a registered trademark under
the name "Studies Masters", which had been registered before 15 th April, 2024. He
requested that Studies LLP change its name, as it closely resembled his registered
trademark.
After conducting an initial investigation, the Registrar found merit in Samudra’s
claim and issued a directive to Studies LLP to change its name. The official notice,
dated 5th May, 2024, was sent via post. However, due to a postal delay, the LLP
received the notice only on 10 th May, 2024. Despite the directive, Studies LLP
ignored the notice and continued operating under the same name.
On 16th August, 2023, the Registrar, acting suo-moto, assigned the LLP a new
name, "Sahitya Masterminds LLP", and updated the register of LLPs accordingly.
A fresh Certificate of Incorporation reflecting the new name was issued. However,
the partners were not comfortable with the new name and initiated steps to change
it again.
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Additionally, on 20 th June, 2024, Vimal submitted a written notice to the LLP stating
that he would cease to be a partner effective 22 nd July, 2024. However, neither
Vimal nor the LLP informed the Registrar about his cessation.
On the basis of above facts and by applying applicable provisions of the Limited
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 6 -8, of
2 marks each) given herein under:
6. On what basis did the Registrar direct Studies LLP to change its name?
(a) The name of designated partners of both the LLPs were identical.
(b) The LLP’s name closely resembled a registered trademark owned by
another party.
(c) The LLP failed to register its name properly.
(d) The LLP was engaged in fraudulent activities.
7. If an LLP fails to comply with the Registrar’s directive to change its name,
what action can the Registrar take?
(a) Impose a penalty but allow the LLP to continue using the same name.
(b) Suo-moto allot a new name and issue a fresh Certificate of Incorporation.
(c) Cancel the LLP’s registration.
(d) Allow the LLP to continue operating under the disputed name until the
matter is resolved in court.
8. Vimal resigned as a partner with effect from 22nd July, 2024, but the LLP did
not inform the Registrar. Who is legally responsible for updating the Registrar
about his resignation?
(a) The LLP and Vimal are both responsible for notifying the Registrar.
(b) Only Vimal is responsible for reporting his resignation.
(c) Only the designated partners of the LLP are responsible.
(d) No one is responsible; this is an internal matter of the LLP.

Case Scenario 3
Mr. Arun Kumar, a software engineer from Bangalore, had worked with a US-based
technology company in Silicon Valley for the past 4 years. In April 2023, he returned
to India to establish a technology startup, Global Ventures Private Limited . He
maintained his foreign currency accounts in USA, containing earnings from his
previous employment. His wife continues to work in USA.

During August 2023, Mr. Kumar undertook several transactions:

• He received USD 200,000 from his US savings account to invest in his Indian
startup
• He gifted USD 75,000 to his brother in India for purchasing property
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• He imported specialized software equipment worth USD 150,000 from a
Singapore-based supplier on 3 months' credit
• He helped his wife (US-based) remit USD 40,000 for their daughter’s higher
education from a recognised university
Global Ventures also set up a branch office in Singapore in October 2023, fully
controlled and managed from its Bangalore headquarters. The company plans to
raise foreign currency loans and explore various overseas investment
opportunities.

On the basis of above facts and by applying applicable provisions of the Foreign
Exchange Management Act (FEMA), 1999, choose the correct answer (one out of
four) of the following Multiple Choice Questions (MCQs 9-11, of 2 marks each)
given herein under:

9. Under FEMA, 1999, what would be Mr. Arun Kumar's residential status for FY
2023-24?
(a) Person Resident in India from April 2023
(b) Person Resident Outside India throughout the year
(c) Person Resident in India only after completing 175 days
(d) Person Resident Outside India till August 2023
10. Which of the following transactions by Mr. Kumar requires prior the Reserve
Bank of India’s approval?
(a) Receiving USD 200,000 from his own foreign account
(b) Gift of USD 75,000 to his brother
(c) Import of equipment on credit terms
(d) Setting up a branch office in Singapore
11. Whether, Mr. Kumar's remittance of USD 40,000 for his daughter’s higher
education from a recognised university, permissible:
(a) Yes
(b) No, as it requires Reserve Bank of India’s approval
(c) It is a prohibited transaction under FEMA, 1999
(d) Yes, after seeking approval from the Central Government
Independent case scenarios
12. A Limited made a public issue of debentures. The articles of the company
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%
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 (c) 2.5%
(d) 2.25% (2 Marks)
13. ABC Limited has received application money of rupees 20,00,000 (2,00,000
equity shares of rupees 10 each) on 10 th October, 2024 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, 2024
(b) 24h November, 2024
(c) 9th December, 2024
(d) 8th January, 2025 (2 Marks)
14. ABC Limited operates a factory near a river. A recent Central Act mandates
that factories must be located at least 3 kilometers away from any river.
An environmental agency claims that ABC Limited’s factory is only 2.5
kilometers away from the river, while ABC Limited argues that the distance is
4 kilometers, based on the road distance along a winding path leading to the
river.
As per the General Clauses Act, 1897, how should the distance between ABC
Limited’s factory and the river be measured to determine compliance with the
Central Act?
(a) The distance should be measured along the shortest possible straight
line (horizontal plane) between the factory and the river.
(b) The distance should be measured along the road/ path actually travelled,
as argued by ABC Limited.
(c) The environmental agency’s estimate of 2.5 kilometres should be
automatically accepted since it favors environmental protection.
(d) The distance should be measured based on any reasonable method, as
long as it justifies the company’s compliance. (2 Marks)
15. Mr. Mukhiya owned a land with fifty neem trees. He sold his land and the
timber (obtained after cutting the trees) to Mr. Ambar. As per the General
Clauses Act, 1897, does the sale of timber amount to the sale of immovable
property?
(a) Yes, timber is part of the land, so its sale is a sale of immovable property.
(b) No, timber is considered movable property once it is cut from the land.
(c) Yes, since trees were earlier rooted in the land, selling timber is similar
to selling land.
(d) No, because movable property only includes motor cars, jewellery and
cash. (2 Marks)

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 PART – II Descriptive Questions (70 Marks)
Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) Alok incorporated a One Person Company making his sister Apeksha as
the nominee. Apeksha is an Indian citizen. She was born and brought up
in Moradabad. However, now Apeksha and her husband are leaving
India permanently to stay with their son who is settled abroad for the last
15 years. Due to this fact, she is withdrawing her consent of nomination
in the said One Person Company. Taking into considerations the
provisions of the Companies Act, 2013, advise whether Alok can appoint
his minor son Shambhu as the nominee of the OPC? (5 Marks)
(b) ABC Private Limited was incorporated on 30 th September 2020. It has a
paid up share capital of ` 45 crore. The company had a turnover of 250
crore for the financial year 2023-24. The accounts manager of the
company has intimated to the company that they are not required to
appoint internal auditor for the financial year 2024-25. The management
of the company have approached you to advise them about the
appointment of internal auditor, as per the provisions of the Companies
Act, 2013. (5 Marks)
(c) Analyse the below mentioned situation in the light of the provisions of
the Foreign Exchange Management Act, 1999.
(i) Mr. New has won a big lottery and wants to remit US Dollar 20,000
out of his winnings to his son who is in Singapore.
(ii) Mr. Manoj requires US Dollar 5,000 for remittance towards hiring
charges of transponders. (4 Marks)
2. (a) ABC Limited is a public company having its registered office in Mumbai.
It has 3680 members. The company sent notice to all its members for
its Annual general Meeting to be held on 2 nd September 2024 (Monday)
at 11:00 AM at its registered office. On the day of meeting there were
only 12 members personally present upto 11:30 AM. The Chairman
adjourned the meeting to same day in next week at the same time and
place.
On the day of adjourned meeting only 10 members were personally
present. The Chairman initiated the meeting after 11:30 AM and passed
the resolutions after discussion as per the agenda of the meeting given
in the notice. Advise, as per the provisions of the Companies Act, 2013:
(i) Whether the original meeting was validly adjourned?
(ii) Whether the adjourned AGM was validly conducted? (5 Marks)
(b) One of the matters contained in the articles of PQR Foundation,
incorporated as a limited company under section 8 of the Companies
Act, 2013, was altered by passing a special resolution in its general
meeting and thereafter, intimation for the same was given to Registrar
of Companies.
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 However, such alteration in the articles (on the grounds that it was not
valid), was opposed by ABC & Co., a partnership firm which is its
member.
Advise, as per the provisions of the Companies Act, 2013, whether the
contention of ABC & Co. was valid and whether it can be a member in
such company. (5 Marks)
(c) Explain the following with reference to the provisions of the General
Clauses Act, 1897:
(i) Affidavit
(ii) Good Faith (4 Marks)
3. (a) Examine that following offers of ABC Limited are in compliance with
provisions of the Companies Act, 2013, related to private placement or
should these offers be treated as public:
(i) ABC Limited wants to raise funds for its upcoming project. It has
issued private placement offer letters to 55 persons in their
individual name to issue its equity shares. Out of these four are
qualified institutional buyers.
(ii) If in case (i) before allotment under this offer letter company issued
another private placement offer to another 155 persons in their
individual name for issue of its debentures.
(iii) Being a public company can it issue securities in a private
placement offers? (5 Marks)
(b) Lily Private Limited on 5 th February 2024 obtained rupees 30 lakh
working capital loan by offering its Stock and Accounts Receivables as
security and rupees 5 Lakh adhoc overdraft on the personal guarantee
of a Director of Lily Private Limited, from a financial institution.
As per the provisions of the Companies Act, 2013, whether the company
is required to create charge for working capital loan and adhoc
overdraft? (5 Marks)
(c) Does an explanation added to a section widen the ambit of a section?
(4 Marks)
4. (a) Sriram Private Limited is a start-up company. Mr. Lovely has been
appointed as Accounts Manager of Sriram Private Limited. The Board
meeting for approval of accounts is to be held on 1 st August, 2024 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. Lovely
about the statements that are required to be prepared. (5 Marks)
(b) XYZ LLP was incorporated on 15 th March, 2023, with its registered office
in Mumbai. The LLP received a legal notice from a supplier at this
address. However, the partners claim they never received the notice, as

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 they had shifted their office to Pune on 10 th January, 2024, but had not
informed the Registrar about the change.
Based on the provisions of the provisions of the Limited Liability
Partnership (LLP) Act, 2008, advise whether the service of notice at the
Mumbai address is legally valid. (5 Marks)
(c) When can the Preamble be used as an aid to interpretation of a statute?
(4 Marks)
5. (a) Explain the provisions of the Companies Act, 2013 relating to the
‘Service of Documents’ on a company and the members of the
company? (5 Marks)
(b) Under the Companies Act, 2013, an auditor appointed by a company is
allowed to provide only those services that are approved by the Board
of Directors or the Audit Committee. However, there are certain services
that an auditor is expressly prohibited from rendering, whether directly
or indirectly, to the company, its holding company, or its subsidiary
company.
List any seven such restricted services that an auditor cannot provide.
(5 Marks)
(c) Ms. Alka was director in Sweets Private Limited. Once while dealing 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 Ms. Alka. 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. (4 Marks)
6. (a) In a general meeting of a company, the shareholders passed a special
resolution regarding some special matters. There were 30 members
present in the meeting. Out of which 15 voted in favour of the resolution,
6 voted against it and 5 votes were found invalid. The remaining 4
members abstained from voting. The chairman of the meeting declared
the resolution as passed. With reference to provisions of the Companies
Act, 2013 examine the validity of chairman's declaration.
(5 Marks)
(b) Namaste Limited, a foreign company having its Indian principal place of
business at Ranchi, Jharkhand is required to deliver various documents

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 to Registrar of Companies under the provisions of the Companies Act,
2013. State where should the said company deliver such documents.
(5 Marks)
(c) List any seven permissible classes of Capital account transactions that
a person resident in India can undertake, under the Foreign Exchange
Management Act (FEMA), 1999. (4 Marks)

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