Q1Sweat equity shares lock-in period under Companies Act, 2013
2 marks hard
Case: Green Wave Beverages Private Limited, incorporated by two close friends, Arjun (MBA–Finance) and Kabir (MBA–Marketing) with Authorised Capital of ` 30 crore consisting of 3,00,00,000 equity shares of ` 10 each, had its Registered office at Indore, Madhya Pradesh. The company, having paid-up share capital of `20,00,00,000, subscribed by 102 shareholders, has been making its niche in the beverage industry for the last six years. With quality and taste as its pillars, Green Wave made its presence felt not only in the city of Indore but also in Gwalior (Uttar Pradesh) and neighbouring areas throug…
The Case Scenario states that the directors of Green Wave Beverages Private Limited decided to reward and motivate the top ten employees of the product development team and marketing team, who contributed significantly to the success of the company and made available rights in the nature of IPR, by issuing 5,00,000 equity shares for consideration other than cash. You are required to choose the correct option from those stated below as to whether the said Sweat Equity shares shall be subject to lock-in/non-transferable for any specified period or not:
(A) The 5,00,000 Sweat Equity shares, when allotted to the top employees of the product development team and marketing team of Green Wave Beverages Private Limited, shall not be subject to lock-in/non-transferable for any period, whatsoever.
(B) The 5,00,000 Sweat Equity shares, when allotted to the top employees of the product development team and marketing team of Green Wave Beverages Private Limited, shall be subject to lock-in/non-transferable for a period of three years from the date of allotment.
(C) The 5,00,000 Sweat Equity shares, when allotted to the top employees of the product development team and marketing team of Green Wave Beverages Private Limited, shall be subject to lock-in/non-transferable for a period of four years from the date of allotment.
(D) The 5,00,000 Sweat Equity shares, when allotted to the top employees of the product development team and marketing team of Green Wave Beverages Private Limited, shall be subject to lock-in/non-transferable for a period of five years from the date of allotment.
Q2Private placement allotment time period under Companies Act,
2 marks hard
Case: Green Wave Beverages Private Limited, incorporated by two close friends, Arjun (MBA–Finance) and Kabir (MBA–Marketing) with Authorised Capital of ` 30 crore consisting of 3,00,00,000 equity shares of ` 10 each, had its Registered office at Indore, Madhya Pradesh. The company, having paid-up share capital of `20,00,00,000, subscribed by 102 shareholders, has been making its niche in the beverage industry for the last six years. With quality and taste as its pillars, Green Wave made its presence felt not only in the city of Indore but also in Gwalior (Uttar Pradesh) and neighbouring areas throug…
The above Case Scenario states that Green Wave Beverages Private Limited needed a fresh dose of additional capital for production and marketing of newly developed health drinks and for that purpose it issued 50,00,000 equity shares of ` 10 each through private placement to the existing shareholders which were duly allotted. Select the appropriate option from those given below as to what is the maximum permissible time period within which the equity shares must have been allotted to the existing shareholders after receipt of application money for such securities from them:
(A) The maximum permissible time period is sixty days, within which the equity shares must have been allotted to the existing shareholders after receipt of application money for such securities from them.
(B) The maximum permissible time period is fifteen days, within which the equity shares must have been allotted to the existing shareholders after receipt of application money for such securities from them.
(C) The maximum permissible time period is ninety days, within which the equity shares must have been allotted to the existing shareholders after receipt of application money for such securities from them.
(D) The maximum permissible time period is thirty days, within which the equity shares must have been allotted to the existing shareholders after receipt of application money for such securities from them.
Q3Sweat equity shares allotment timeline from date of resoluti
2 marks hard
Case: Green Wave Beverages Private Limited, incorporated by two close friends, Arjun (MBA–Finance) and Kabir (MBA–Marketing) with Authorised Capital of ` 30 crore consisting of 3,00,00,000 equity shares of ` 10 each, had its Registered office at Indore, Madhya Pradesh. The company, having paid-up share capital of `20,00,00,000, subscribed by 102 shareholders, has been making its niche in the beverage industry for the last six years. With quality and taste as its pillars, Green Wave made its presence felt not only in the city of Indore but also in Gwalior (Uttar Pradesh) and neighbouring areas throug…
According to the Case Scenario, Green Wave Beverages Private Limited issued 5,00,000 Sweat Equity shares to the top ten employees of the product development team and marketing team, for consideration other than cash, after passing the specified resolution. You are required to choose the correct option from those mentioned below as to within a period of how many months, the allotment of Sweat Equity shares must be made from the date of passing of the specified resolution which authorised the said issue, if the allotment is not made immediately after its passing:
(A) Within a period of not more than three months, the allotment of Sweat Equity shares must be made from the date of passing of the specified resolution which authorised the said issue, if the allotment is not made immediately after its passing.
(B) Within a period of not more than twelve months, the allotment of Sweat Equity shares must be made from the date of passing of the specified resolution which authorised the said issue, if the allotment is not made immediately after its passing.
(C) Within a period of not more than six months, the allotment of Sweat Equity shares must be made from the date of passing of the specified resolution which authorised the said issue, if the allotment is not made immediately after its passing.
(D) Within a period of not more than nine months, the allotment of Sweat Equity shares must be made from the date of passing of the specified resolution which authorised the said issue, if the allotment is not made immediately after its passing.
Q4Audit of foreign branch office under Companies Act, 2013
2 marks hard
Case: Green Wave Beverages Private Limited, incorporated by two close friends, Arjun (MBA–Finance) and Kabir (MBA–Marketing) with Authorised Capital of ` 30 crore consisting of 3,00,00,000 equity shares of ` 10 each, had its Registered office at Indore, Madhya Pradesh. The company, having paid-up share capital of `20,00,00,000, subscribed by 102 shareholders, has been making its niche in the beverage industry for the last six years. With quality and taste as its pillars, Green Wave made its presence felt not only in the city of Indore but also in Gwalior (Uttar Pradesh) and neighbouring areas throug…
According to the Case Scenario, Green Wave Beverages Private Limited established its sixth branch in Lisbon, Portugal, after establishing first five Indian branches in a row. As regards auditing the accounts of the present overseas branch, who according to you is authorised to audit the accounts of this foreign branch as per the applicable provisions? Choose the correct option from those stated below:
(A) As regards auditing of sixth branch established in Lisbon, by Green Wave Beverages Private Limited, only the company's auditor R. K. Deshpande & Associates is authorised to audit its accounts.
(B) As regards auditing of sixth branch established in Lisbon, by Green Wave Beverages Private Limited, the company's auditor R. K. Deshpande & Associates or an accountant or any other person duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of Portugal is authorised to audit its accounts.
(C) As regards auditing of sixth branch established in Lisbon, by Green Wave Beverages Private Limited, the company's auditor R. K. Deshpande & Associates or any other person duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of Portugal, is authorised to audit its accounts.
(D) As regards auditing of sixth branch established in Lisbon, by Green Wave Beverages Private Limited, an accountant or any other person duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of Portugal is authorised to audit its accounts.
Q5Pari passu rights of sweat equity shareholders under Compani
2 marks hard
Case: Green Wave Beverages Private Limited, incorporated by two close friends, Arjun (MBA–Finance) and Kabir (MBA–Marketing) with Authorised Capital of ` 30 crore consisting of 3,00,00,000 equity shares of ` 10 each, had its Registered office at Indore, Madhya Pradesh. The company, having paid-up share capital of `20,00,00,000, subscribed by 102 shareholders, has been making its niche in the beverage industry for the last six years. With quality and taste as its pillars, Green Wave made its presence felt not only in the city of Indore but also in Gwalior (Uttar Pradesh) and neighbouring areas throug…
It is evident that Green Wave Beverages Private Limited issued 5,00,000 Sweat Equity shares for consideration other than cash to the top employees of the product development team and marketing team. Keeping in view the applicable provisions, you are required to select the apt answer from the options given below as to when the holders of these sweat equity shares shall rank pari passu with other equity shareholders of the company:
(A) The top ten employees of the product development team and marketing team, being the holders of 5,00,000 sweat equity shares, shall rank pari passu with other equity shareholders of the company only after the expiry of three years from the date of allotment.
(B) The top ten employees of the product development team and marketing team, being the holders of 5,00,000 sweat equity shares, shall rank pari passu with other equity shareholders of the company only after the expiry of four years from the date of allotment.
(C) The top ten employees of the product development team and marketing team, being the holders of 5,00,000 sweat equity shares, shall rank pari passu with other equity shareholders of the company immediately from the date of allotment.
(D) The top ten employees of the product development team and marketing team, being the holders of 5,00,000 sweat equity shares, shall rank pari passu with other equity shareholders of the company only after the expiry of five years from the date of allotment.
Q6Newly admitted LLP partner's liability for past compliance d
2 marks hard
Case: Ramneek and Madhu, two young entrepreneurs, founded "New Education Innovators LLP" under the Limited Liability Partnership Act, 2008, with a focus on providing digital education solutions. Ramneek brought technical expertise, while Madhu managed the business operations. According to the LLP Agreement, both contributed equally and shared profits equally. After two years of growth, they decided to admit Amit, an industry expert, as a partner to expand their reach. Amit agreed to contribute additional capital and bring industry contacts. However, shortly after joining, Amit discovered that certai…
When Amit joined New Education Innovators LLP, he discovered that key compliance filings, including the Annual Return and Statement of Accounts and Solvency, were pending. What is Amit's liability as a newly admitted partner concerning these past compliance lapses?
(A) Amit has no liability for past compliance lapses since he was not a partner when they occurred.
(B) Amit shares equal liability for past compliance lapses because he is now a partner in the LLP.
(C) Amit is only liable if the LLP Agreement specifically assigns responsibility to him for compliance.
(D) Amit's liability for past compliance is limited to his capital contribution in the LLP.
Q7Designated partners' compliance responsibilities under LLP A
2 marks hard
Case: Ramneek and Madhu, two young entrepreneurs, founded "New Education Innovators LLP" under the Limited Liability Partnership Act, 2008, with a focus on providing digital education solutions. Ramneek brought technical expertise, while Madhu managed the business operations. According to the LLP Agreement, both contributed equally and shared profits equally. After two years of growth, they decided to admit Amit, an industry expert, as a partner to expand their reach. Amit agreed to contribute additional capital and bring industry contacts. However, shortly after joining, Amit discovered that certai…
In light of Amit's concern about the pending compliance filings, which of the following best describes the responsibilities of the partners in New Education Innovators LLP regarding compliance with the LLP Act, 2008?
(A) Only the designated partners are responsible for ensuring compliance with filing obligations under the LLP Act.
(B) All partners, including new partners like Amit, are equally responsible for compliance, regardless of the LLP Agreement.
(C) Compliance responsibilities can only be assigned to one partner, who will bear full accountability.
(D) The legal advisor is responsible for handling compliance, and the partners have no liability once they hire legal counsel.
Q8Consequence of non-filing of LLP annual return for five cons
2 marks hard
Case: Ramneek and Madhu, two young entrepreneurs, founded "New Education Innovators LLP" under the Limited Liability Partnership Act, 2008, with a focus on providing digital education solutions. Ramneek brought technical expertise, while Madhu managed the business operations. According to the LLP Agreement, both contributed equally and shared profits equally. After two years of growth, they decided to admit Amit, an industry expert, as a partner to expand their reach. Amit agreed to contribute additional capital and bring industry contacts. However, shortly after joining, Amit discovered that certai…
Suppose in the given scenario, New Education Innovators LLP fails to file the Statement of Account and Solvency or Annual Return for any five consecutive financial years, which of the following could occur?
(A) New Education Innovators LLP may be wound up the Tribunal.
(B) Takeover of New Education Innovators LLP by the persons appointed by the Registrar of Companies.
(C) Revocation of all partner rights until filings are complete.
(D) The losses for these 5 consecutive years shall be shared equally by all the partners irrespective of the profit sharing ratio as decided in the LLP agreement.
Q9FEMA foreign exchange limit for studies abroad
2 marks hard
Case: Arnav Mehta is a very bright student. He is a resident of Ahmedabad and lived in India throughout the Financial Year 2024–25. On 12 July 2025, he left India to pursue a two-year Master's program in Biotechnology at a reputed university in Geneva, Switzerland. To meet the cost of his education, Arnav required USD 25,000 per year towards tuition fees and USD 30,000 annually for his living and incidental expenses. He approached his authorised dealer bank to obtain foreign exchange for these requirements under applicable the Foreign Exchange Management Act (FEMA), 1999 and Current Account Transact…
Arnav requires USD 55,000 per year (tuition + living expenses). Can he obtain this foreign exchange?
(A) Yes, up to USD 55,000 per academic year without RBI approval.
(B) Yes, but only up to USD 25,000 without approval.
(C) No, he must obtain RBI approval for the entire amount.
(D) Yes, but only for tuition fees; living expenses require separate RBI approval.
Q10FEMA prohibition on remittance of lottery winnings abroad
2 marks hard
Case: Arnav Mehta is a very bright student. He is a resident of Ahmedabad and lived in India throughout the Financial Year 2024–25. On 12 July 2025, he left India to pursue a two-year Master's program in Biotechnology at a reputed university in Geneva, Switzerland. To meet the cost of his education, Arnav required USD 25,000 per year towards tuition fees and USD 30,000 annually for his living and incidental expenses. He approached his authorised dealer bank to obtain foreign exchange for these requirements under applicable the Foreign Exchange Management Act (FEMA), 1999 and Current Account Transact…
Mr. Rajesh Mehta won a local lottery and wants to remit a part of the winnings to Arnav in Switzerland. The authorised dealer must evaluate whether the transaction is permissible. Which of the following statement is correct in respect of the authorised dealer (AD)?
(A) AD will allow the remittance freely for an amount upto USD 5,000.
(B) AD will allow the remittance freely since it is below USD 2,50,000.
(C) AD will allow the remittance as long as it is for supporting education.
(D) AD will reject the request because lottery winnings cannot be remitted under any circumstances as it falls under prohibited current account transactions.
Q11FEMA foreign exchange release for medical treatment abroad e
2 marks hard
Case: Arnav Mehta is a very bright student. He is a resident of Ahmedabad and lived in India throughout the Financial Year 2024–25. On 12 July 2025, he left India to pursue a two-year Master's program in Biotechnology at a reputed university in Geneva, Switzerland. To meet the cost of his education, Arnav required USD 25,000 per year towards tuition fees and USD 30,000 annually for his living and incidental expenses. He approached his authorised dealer bank to obtain foreign exchange for these requirements under applicable the Foreign Exchange Management Act (FEMA), 1999 and Current Account Transact…
If Raghav submits a medical estimate from the US hospital showing expenses of USD 4,00,000, what can the authorised dealer do?
(A) Release only USD 2,50,000; the balance is prohibited.
(B) Release any amount without limit because it is a medical emergency.
(C) Authorised dealers shall release USD 2,50,000 without approval and release additional amounts if supported by medical estimate from the doctor/hospital without referring to RBI.
(D) Decline the request until Raghav becomes a non-resident.
Q12First financial year of a newly incorporated company under C
2 marks easy
A Ltd. is incorporated on 3rd January, 2023. As per the Companies Act, 2013, what will be the financial year for the company:
(A) 31st March, 2023
(B) 31st December, 2023
(C) 31st March, 2024
(D) 30th September, 2024
Q13Time limit for registration of charge with ROC under Compani
2 marks easy
A charge was created by Black Limited on its office premises to secure a term loan of ` 1 crore availed from Amro Bank Limited through an instrument of charge executed by both the parties on 16th February, 2025. Inadvertently, the company could not get the charge registered with the concerned Registrar of Companies (ROC) within the first statutory period permitted by law and the default was made known to it by the lending banker with a stern warning to take immediate steps for rectification. The latest date within which the company must register the charge with the ROC so as to avoid paying ad valorem fees for registration of the charge is:
(A) 27th April, 2025
(B) 17th April, 2025
(C) 2nd May, 2025
(D) 16th June 2025
Q14Definition of immovable property under General Clauses Act,
2 marks easy
ABC Real Estate Ltd., a prominent real estate company, has recently acquired a piece of land in a suburban area. The land has a small lake that is expected to generate significant tourism revenue in the future. Additionally, the land has several old structures that are permanently fastened to the earth, such as a stone pavilion and a historical monument. ABC Real Estate Ltd. plans to develop the area by refurbishing the existing structures and enhancing the natural surroundings to attract tourists. Considering the above scenario, identify which of the following components are classified as "Immovable Property" under the General Clauses Act, 1897:
(A) Only the land and the stone pavilion.
(B) Only the land and the benefits arising from the lake.
(C) The land, benefits arising from the lake, and the stone pavilion.
(D) The land, the benefits arising from the lake, the stone pavilion and the historical monument.
Q15Measurement of distance under General Clauses Act, 1897
2 marks easy
The Ministry of Transport is planning to construct a new highway that will connect City A and City B. According to the initial plan, the highway is expected to cover a distance of 180 kilometers. During the survey, the engineers measure the distance between the two cities as the crow flies, without considering the natural terrain and existing road curves. This method is in line with the provisions of the General Clauses Act, 1897 regarding the measurement of distance for the purposes of any Central Act or Regulation. Considering the above scenario, which statement is correct about the measurement of distance as per the General Clauses Act, 1897?
(A) The distance should be measured along the existing roadways and curves.
(B) The distance should be measured considering the natural terrain and obstacles.
(C) The distance should be measured in a straight line on a horizontal plane unless otherwise specified.
(D) The distance should be measured as a combination of straight lines and natural curves.