Downloaded from castudyweb.

com

Mock Test Paper - Series I: July, 2025

Date of Paper: 22nd July, 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
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.
The company has appointed Arun & Co., a chartered accountancy firm, as the auditors for two
terms of 5 consecutive years each, from FY 2014–15 to FY 2023–24. The firm had two main
partners CA. Rajan Mehta and CA. Nupur Jain. For the FY 2024–25 to F.Y. 2029-30, the
company wanted to appoint Jain & Associates. However, it was later noted that CA Nupur Jain
is a sleeping partner in Jain & Associates. The board is of view that since CA Nupur Jain is

1
 Downloaded from castudyweb.com

sleeping partner in the company, there should be no issues in continuing the services of Jain
&Associates as their auditors.
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 1-4, of 2 marks each) given herein under:
1. Considering the applicable provisions related to private placement as given 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.
2. The company had defaulted on repayment of deposits but wishes to accept 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 company completed two audit terms (10 years) with Arun & Co. and now intends to
appoint Jain & Associates as its new auditor firm. But it found that CA. Nupur Jain is a

2
 Downloaded from castudyweb.com

common partner in both firms. Which of the following best explains why Jain & Associates
qualifies/disqualifies for the appointment as an auditor?
(a) Appointment of Jain & Associates would violate the provisions of the Companies
Act, 2013, as the firm has common partner with the retiring auditor firm, making it
ineligible for five years under the Companies Act.
(b) Jain & Associates cannot be disqualified as CA. Nupur Jain is a sleeping partner
of the firm.
(c) Jain & Associates can be appointed as the new auditor firm since it has partners
apart from CA. Nupur Jain also.
(d) Jain & Associates disqualifies to be appointed as auditor of the firm as it needs to
observe a cooling-off period of 2 years as it has common partners.
4. The board of directors are of view that they should maintain a register at 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.
Case Scenario 2
Divine Associates was a well-established partnership firm operating in engineering and
infrastructure consulting for over two decades. It includes four partners—Mr. Aryan (designated
Partner), Ms. Simran (sleeping partner), Mr. Junaid (Finance Head) and Mr. Roy (Operations).
The firm saw immense growth after securing multiple government infrastructure contracts. As
the business expanded, they faced increasing compliance complexities, risk of personal
liabilities and tax inefficiencies.
In early FY 2023-24, the partners unanimously decided to convert the partnership into a Limited
Liability Partnership (LLP) for better risk protection and corporate governance. The firm was
registered as Stellar Associates LLP on 20th October, 2023.

3
 Downloaded from castudyweb.com

Ten days later after conversion, due to some chronic health issues Mr. Junaid resigned. The
LLP continued operations with the remaining three partners. However, from 1st November, 2023,
to 1st June, 2024, no new partner was appointed. During this time, significant project contracts
and vendor negotiations were executed by Mr. Aryan and Mr. Roy.
Ms. Simran, despite being a silent partner, extended a ` 20 lakh personal loan to the LLP for
temporary working capital. She signed a standard loan agreement and expected repayment
within 18 months. The LLP treated this as external borrowing, with interest and principal
obligations to her similar to a non-partner lender.
In April 2025, the LLP faced internal disputes regarding a transfer of Mr. Roy’s profit share to
Mr. Ketan (a third-party investor). The investor insisted on participating in decision-making after
acquiring 20% profit rights, which was denied by the remaining partners.
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 5-8, of 2 marks each) given herein
under:
5. Mr. Junaid resigned from Stellar Associates LLP on 30th October, 2023. Choose the
correct option:
(a) The LLP should file a notice with the Registrar within 30 days from the date Mr.
Junaid ceases to be a partner.
(b) The LLP should file a notice with the Registrar within 7 days from the date of
resignation.
(c) There is no statutory time limit for informing the Registrar of a partner's
resignation.
(d) The LLP is under no obligation to inform the Registrar about such change. It is
only the responsibility of outgoing partner to inform the Registrar.
6. From 1st November, 2023 to 1st June, 2024, the LLP functioned with only two partners.
What is the most critical legal consequence under LLP law?
(a) The LLP must dissolve immediately after 3 months.
(b) All decisions taken during this period are valid as it needs two partners run an LLP
(c) The continuing partners may be personally liable for obligations incurred during
the 6+ month period.
(d) There is no consequence if the partners are aware of the shortage.

4
 Downloaded from castudyweb.com

7. Regarding Ms. Simran’s ` 20 lakh loan to the LLP, what is the correct classification and
its legal effect?
(a) It must be treated as a capital contribution, but priority will be given to creditors
loan.
(b) It qualifies as a partner’s contribution and offers no creditor protection.
(c) It is treated as a third-party transaction and must be honoured like any external
loan.
(d) Such loans are not permitted between partners and LLP.
8. Mr. Roy transferred 20% of his profit rights to Mr. Ketan who now demands management
rights. So as per the provision of LLP Act how will you define Mr. Ketan position in the
LLP?
(a) The transferee automatically becomes a partner entitled to manage the LLP.
(b) Profit transfer doesn’t entitle the transferee to management or access to LLP
affairs.
(c) The transferee can veto management decisions involving Roy’s capital.
(d) Only if more than 25% is transferred, management rights apply.
Case Scenario 3
Evercrest Agro Equipments Private Limited ("EAEPL") was in the process of establishing a new
agricultural machinery manufacturing unit in Nashik, Maharashtra. On 28 th February 2024, the
Board of Directors passed a resolution to acquire the following assets:
• An industrial warehouse
• 30 acres of farmland located next to the warehouse
• 150 tractors for operational use and resale
• A plantation of 200 timber trees on part of the farmland
Later, on 15th March 2024, the company received a government notification requiring that all
newly established agro-industrial units must obtain a special regulatory clearance within 45 days
from the date of establishment.
The notification also clarified that all existing permissions or orders issued under the repealed
Agro-Industrial Development Act shall remain valid under the new replacement legislation.
As per the notification, intimation or service of orders must be made through registered post to
all concerned stakeholders.

5
 Downloaded from castudyweb.com

Now, the Managing Director of the company seeks your legal opinion on various implications
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 9-11, of 2 marks each) given herein under:
9. Among the assets acquired by EAEPL, which of the following would not be classified as
immovable property under the General Clauses Act, 1897?
(a) The industrial warehouse
(b) 30 acres of farmland
(c) 150 tractors
(d) Plantation of 200 timber trees
10. If the requirement was to obtain regulatory clearance within 45 days from the date of
establishment (which was 28th February 2024), and 13th April 2024 was a public holiday,
by which date must the clearance be obtained (assuming 13th April, 2024 is a Saturday)?
(a) 13th April 2024
(b) 12th April 2024
(c) 14th April 2024
(d) 15th April 2024
11. The government notification dated 15th March 2024 was sent to EAEPL via registered
post on 18th March 2024, and the company returns it with an endorsement of refusal. As
per the General Clauses Act, 1897, choose the correct option.
(a) It will be presumed that the notice has been served
(b) It will be deemed that the notice has not been served
(c) The notice has to be sent again till the time, the company does not validly accept
the notice
(d) The notice will now be served on the shareholders of the company
Independent case scenarios
12. ABC Limited has its shares listed on a recognized stock exchange in India. During the
current financial year ending on 31st March 2025, the Securities and Exchange Board of
India (SEBI) has found some irregularities in the filings made by the company.
Accordingly, SEBI proposes to make an application to the Tribunal for reopening of the
books of accounts of the Company. You, as an expert, are called upon by SEBI to advise
with which last financial year for reopening of books of accounts an application can be
made?

6
 Downloaded from castudyweb.com

(a) 2016-2017
(b) 2017-2018
(c) 2020-2021
(d) 2022-2023 (2 Marks)
13. Entrenchment enhance the protection. ABC Limited, an existing private company willing
to insert the provisions for entrenchment; it
(a) Can amend the article by passing an ordinary resolution
(b) Can amend the article by passing a special resolution
(c) Can amend the article agreed by all the members
(d) Can’t amend article to make the provisions for entrenchment (2 Marks)
14. In September, 2024, Pawan visited Atlanta as well as Athens and thereafter, London and
Berlin on a month-long business trip, for which he withdrew foreign exchange to the
extent of US$ 50,000 from his banker State Bank of India, New Delhi branch. In
December, 2024 he further, withdrew US$ 50,000 from SBI and remitted the same to his
son Aryan who was studying in Toronto, Canada. In the first week of January, 2025, he
sent his ailing mother Mrs. Savita for a specialised treatment along with his wife
Mrs. Rashmi to Seattle where his younger brother Pranav, holder of Green Card, is
residing. For the purpose of his mother’s treatment and to help Pranav to meet increased
expenses, he requested his banker SBI to remit US$ 75,000 to Pranav account
maintained with Citibank, Seattle. In February, 2025, Pawan’s daughter Devanshi got
engaged and she opted for a ‘destination marriage’ to be held in August, 2025 in Zurich,
Switzerland. While on a trip to Dubai in the last week of March, 2025, he again withdrew
US$ 35,000 to be used by him and Devanshi for meeting various trip expenses including
shopping in Dubai. Later, the event manager gave an estimate of US$ 2,50,000 for the
wedding of Devanshi at Zurich, Switzerland. Which option do you think is the correct one
in the light of applicable provisions of Foreign Exchange Management Act, 1999 including
obtaining of prior approval, if any, from Reserve Bank of India since Pawan withdrew
foreign exchange on various occasions from his banker State Bank of India.
(a) In respect of withdrawal of foreign exchange on various occasions from his banker
State Bank of India and remitting the same outside India during the financial year
2024-25, Pawan is not required to obtain any prior approval.
(b) In respect of withdrawal of US$ 35,000 in the last week of March, 2025, for a trip
to Dubai, Pawan must have obtained prior approval of Reserve Bank of India since
the maximum amount of foreign exchange that can be withdrawn in a financial
year is US$ 1,75,000.

7
 Downloaded from castudyweb.com

(c) After withdrawing US$ 1,00,000, Pawan must have obtained prior approval of
Reserve Bank of India for the remaining remittances made during the financial
year 2024-25, otherwise SBI would not have permitted further withdrawals.
(d) After withdrawing US$ 50,000, Pawan must have obtained prior approval of
Reserve Bank of India for the remaining remittances made during the financial
year 2024-25, otherwise SBI would not have permitted further withdrawals.
(2 Marks)
15. ABC Limited, an Indian company, holds a commercial plot in Chennai which it intends to
sell. WXY, a real estate broker with its Head Office in the USA, has been appointed by ABC
Limited to find some suitable buyers for the said commercial plot in Chennai which is
situated at a prime location. WXY identifies Glory Estate Inc., based out of USA, as the
potential buyer. It is to be noted that Glory Estate Inc. is controlled from India and hence,
is a ‘Person Resident in India’ under the applicable provisions of Foreign Exchange
Management Act, 1999. A deal is finalised and Glory Estate Inc. agrees to purchase the
commercial plot for USD 600,000 (assuming 1 USD = ` 70). According to the agreement,
ABC Limited is required to pay commission @ 7% of the sale proceeds to WXY for
arranging the sale of commercial plot to Glory Estate Inc. and commission is to remitted in
USD to the Head Office of WXY located in USA. Considering the relevant provisions of
Foreign Exchange Management Act, 1999, which statement out of the four given below is
correct (ignoring TDS implications arising under the Income-tax Act, 1961):
(a) There is no requirement of obtaining prior permission of Reserve Bank of India
(RBI) for remittance of commission upto USD 25,000 by ABC Limited to WXY but
for the balance commission of USD 17,000, prior permission of RBI is required to
be obtained.
(b) There is no requirement of obtaining prior permission of Reserve Bank of India
(RBI) for remittance of commission upto USD 30,000 by ABC Limited to WXY but
for the balance commission of USD 12,000, prior permission of RBI is required to
be obtained.
(c) There is no requirement of obtaining prior permission of Reserve Bank of India
(RBI) for remittance of entire commission of USD 42,000 by ABC Limited to WXY.
(d) It is mandatory to obtain prior permission of Reserve Bank of India (RBI) for
remittance of entire commission of USD 42,000 by ABC Limited to WXY.
(2 Marks)

8
 Downloaded from castudyweb.com

PART – II Descriptive Questions (70 Marks)

Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) Referring the relevant provisions of the Companies Act, 2013, examine, whether
following companies will be considered as listed company or unlisted company:
(i) ABC Limited, a public company, has listed its non-convertible Debt
securities issued on private placement basis in terms of SEBI (Issue and
Listing of Debt Securities) Regulations, 2008.
(ii) XYZ Limited, a public company, has listed its non-convertible redeemable
preference shares issued on private placement basis in terms of SEBI
(Issue and Listing of Non-Convertible Redeemable Preference Shares)
Regulations, 2013.
(iii) RAM Limited, a public company, which has not listed its equity shares on
a recognized stock exchange but whose equity shares are listed on a stock
exchange in a jurisdiction as specified in sub-section (3) of section 23 of
the Companies Act, 2013. (5 Marks)
(b) Zeeta Polymers (P) Ltd. has earned profits for the first two quarters of the financial
year 01.04.2024 to 31.03.2025. The Company has calculated, declared and paid
interim dividends based on profits earned in the first two quarters after providing
for full-year depreciation. The Company incurred losses in the next two quarters.
The Company has incurred overall losses for the financial year ending 31.08.2025,
leaving no surplus in its profit and loss account. The Company has not
carried-over losses and unabsorbed depreciation. Applying the provisions of the
Companies Act, 2013, decide whether the company contravened the provisions
of the Companies Act, 2013 by declaring interim dividends despite incurring
overall losses for the financial year? (5 Marks)
(c) ‘Lalji’ is a Singapore based company having several business units all over the
world. It has a unit for manufacturing computer chips with its Headquarters in
Pune. It has a Branch in Dubai which is controlled by the Headquarters in Pune.
What would be the residential status under the Foreign Exchange Management
Act (FEMA), 1999 of printer chips in Pune and that of Dubai branch? (4 Marks)
2. (a) Blue Limited passed two resolutions by means of postal ballot. Keeping in view
the relevant provisions of the Companies Act, 2013, you are required to advise
the directors of the company regarding the provisions applicable for making

9
 Downloaded from castudyweb.com

entries in the minutes book including the time limit within which the entries must
be made. (5 Marks)
(b) Aarna Ltd. was dealing in export of cotton fabric to specified foreign countries.
The company was willing to purchase cotton fields in Punjab State. The
prospectus issued by the company contained some important extracts of the
expert report. The report was found untrue. Mr. Nick purchased the shares of
Aarna Ltd. on the basis of the expert's report published in the prospectus.
However, he did not suffer any loss due to purchase of such shares. Would Mr.
Nick have any remedy against the company? State the circumstances where an
expert is not liable under the Companies Act, 2013. (5 Marks)
(c) What is the meaning of service by post as per provisions of the General Clauses
Act, 1897? (4 Marks)
3. (a) Shubhkamna Private limited has registered its articles along with memorandum at
the time of registration of company in 2010. Now directors of the company are of
the view that provisions of articles regarding forfeiture of shares should not be
changed except by a resolution of 90% majority. While as per section 14 of the
Companies Act, 2013 articles may be changed by passing a special resolution
only. One of the directors said that they cannot make a provision against the
Companies Act. You are required to advise the company on this matter.
(5 Marks)
(b) Mr. A and Mr. B are joint holders of 5,000 equity shares of XYZ Limited. The
company has a total share capital of 40,000 equity shares. A requisition for
convening an Extraordinary General Meeting (EGM) was submitted to the
company and was signed by Mr. A and Mr. B. The Board of Directors refuses to
call the EGM, citing that the requisition is invalid since it does not meet the criteria
as prescribed under the law.
Examine the validity of the Board of Directors refusal with reference to the relevant
provisions of the Companies Act, 2013. (5 Marks)
(c) Define Grammatical Interpretation. What are the exceptions to grammatical
interpretation? (4 Marks)
4. (a) M/s AT & Co. is a proprietary firm and M/s VK Associates, a partnership firm, had
been appointed as the Joint statutory auditors of PQR Ltd. for & consecutive years
from 1.4.2021 to 31.3.2026. The shareholders had delegated the responsibility to
fix the auditor's remuneration to the Managing Director, Mr. D. On 29.03.2023,
there was a change in the constitution of M/s AT & Co. from proprietorship to a
partnership. In light of the above facts and referring to the provisions of the

10
 Downloaded from castudyweb.com

Companies Act, 2013, answer each of the following questions:

(i) Does the Company have the authority to delegate the power to the
Managing Director to fix the remuneration of the statutory auditors?
(ii) Whether annual ratification necessary since the auditor is appointed for a
consecutive term of 5 years?
(iii) Whether a revised ADT-1 Form is required to be filed with the details of the
new firm, M/s AT & Co. after the change in its constitution? (5 Marks)
(b) A dispute among the partners of Limited Liability Partnership (the LLP)
jeopardized the stability of the business. Out of two partners, one due to a quarrel,
left the LLP. The other partner alone continued the business of the LLP. You are
being an expert in law is requested to explain the provisions governing the LLP
being operated by a single partner. Give your answer as per the provisions of the
Limited Liability Partnership Act, 2008. (5 Marks)
(c) Explain the rule in ‘Heydon’s Case’ while interpreting the Statutes quoting an
example. (4 Marks)
5. (a) Mr. Rock and Amaan are partners in a Chartered Accountant's firm. Their firm has
been appointed as the statutory auditor of a company. The accounts manager of the
company obtained the signatures from the Directors, CFO, and CEO on the board
reports, financial statements and other documents and submitted them to the statutory
auditor for the audit. The audit was conducted by a team led by Mr. Rock, while
Mr. Amaan signed the auditor's report on behalf of the firm Referring the provisions
contained in the Companies Act, 2013, answer each of the following:
(i) Has the Board complied with the relevant provisions?
(ii) Can Mr. Amaan sign the audit report in this case? (5 Marks)
(b) Following are the extracts of information (as per the latest audited balance sheet)
in respect of Play World Ltd.:
(`in crore)
(i) Paid-up share capital 20
(ii) Share premium 10
(iii) Free reserves 30
(iv) Turnover 510
The Company wants to accept deposits of 50 crore from the public and has
obtained a credit rating. The tenure of the deposit is 36 months.

11
 Downloaded from castudyweb.com

In light of the above data and referring to the provisions in the Companies Act.
2013, answer each of the following:
(i) Can Play World Ltd. be permitted to accept deposits from the public other
than its members after passing an ordinary resolution?
(ii) Play World Ltd. needs 5 crore of funds for its short-term requirements and
promises to repay the deposits within 5 months. Can the Company raise
deposits under the Companies Act, 2013 and the applicable rules?
(5 Marks)
(c) The Companies Act, 2013 provides that the amount of dividend remained
unpaid/unclaimed on expiry of 30 days from the date of declaration of dividend
shall be transferred to unpaid dividend account within 7 days from the date of
expiry of such period of 30 days. If the expiry date of such 30 days is 30.10.2024,
decide the last date on or before which the unpaid/unclaimed dividend amount
shall be required to be transferred to a separate bank account in the light of the
relevant provisions of the General Clauses Act, 1897? (4 Marks)
6. (a) Tulip Gardens Ltd. maintains its Register of Members at its registered office in
Mumbai. A group of members residing in Kolkata wants to keep the register of
members at Kolkata.
(i) Keeping in view the provisions of the Companies Act, 2013, explain
whether Tulip Gardens Ltd. can keep the Registers and Returns at Kolkata.
(ii) Whether Mr. Rich, a director holding only 400 shares of worth ` 4000, has
the right to inspect the Register of Members? (5 Marks)
(b) Raysun Limited is an unlisted public company. As per its audited financial
statements for the financial year 2023–24, the company had a paid-up share
capital of ` 40 crore, a turnover of ` 210 crore, and outstanding loans of ` 90
crore from public financial institutions. The company also accepted public deposits
amounting to ` 28 crore during the same financial year.
Based on the above facts, examine whether Raysun Limited is required to appoint
an internal auditor as per the provision of the Companies Act, 2013. (5 Marks)
(c) As per the provisions of the Foreign Exchange Management Act, 1999, a person
resident in India is allowed to hold, own, transfer, or invest in foreign currency,
foreign security, or immovable property situated outside India. List the
transactions that are covered/ allowed to undertake. Support your answer with
any clarifications issued by the Reserve Bank of India. (4 Marks)

12