Q1(i)Deposits from public — eligibility criteria under Companies
2 marks hard
Case: Kaisha Packers and Movers Limited was incorporated on 20th September, 2014 to provide moving and relocation services in the northern region. The authorised capital is Rs. 150.00 lacs divided into 15,00,000 equity shares of Rs. 10 each. At incorporation, paid-up capital was Rs. 1,00,00,000 with 50 shareholders. During the mid of the current financial year, it offered remaining 5,00,000 shares to 120 persons at a premium of Rs. 10 per share on private placement basis. Ruchi (freelance software consultant) and her sister Rumi (management consultant in Info Solutions Limited), along with twelve ot…
According to the case scenario, the company is desirous of raising deposits from its members to augment the funding requirements. In case, the company also contemplates to raise deposits from public in addition to its members, which of the following option is applicable:
(A) In order to raise deposits from public besides members, the company should have net worth of minimum Rs. 100 crores and a turnover of minimum Rs. 500 crores.
(B) In order to raise deposits from public besides members, the company should have net worth of minimum Rs. 150 crores and a turnover of minimum Rs. 250 crores.
(C) In order to raise deposits from public besides members, the company should have net worth of minimum Rs. 150 crores or a turnover of minimum Rs. 750 crores.
(D) In order to raise deposits from public besides members, the company should have net worth of minimum Rs. 100 crores or a turnover of minimum Rs. 500 crores.
Q1(ii)Private placement — limit on number of offerees per financia
2 marks hard
Case: Kaisha Packers and Movers Limited was incorporated on 20th September, 2014 to provide moving and relocation services in the northern region. The authorised capital is Rs. 150.00 lacs divided into 15,00,000 equity shares of Rs. 10 each. At incorporation, paid-up capital was Rs. 1,00,00,000 with 50 shareholders. During the mid of the current financial year, it offered remaining 5,00,000 shares to 120 persons at a premium of Rs. 10 per share on private placement basis. Ruchi (freelance software consultant) and her sister Rumi (management consultant in Info Solutions Limited), along with twelve ot…
According to the case scenario, during the mid of the current financial year, the company offered 5,00,000 shares to 120 persons at a premium of Rs. 10 per share on private placement basis. During the remaining part of the current financial year, the company is desirous of tapping more prospective investors by offering them equity shares on private placement basis. How many more such prospective shareholders can be invited by the company for investment in the capital of the company?
(A) The company can offer equity shares maximum up to the 30 prospective shareholders in the remaining part of the current financial year.
(B) The company can offer equity shares maximum up to the 55 prospective shareholders in the remaining part of the current financial year.
(C) The company can offer equity shares maximum up to the 80 prospective shareholders in the remaining part of the current financial year.
(D) The company can offer equity shares maximum up to the 130 prospective shareholders in the remaining part of the current financial year.
Q1(iii)Refund of application money on failure to allot shares — tim
2 marks hard
Case: Kaisha Packers and Movers Limited was incorporated on 20th September, 2014 to provide moving and relocation services in the northern region. The authorised capital is Rs. 150.00 lacs divided into 15,00,000 equity shares of Rs. 10 each. At incorporation, paid-up capital was Rs. 1,00,00,000 with 50 shareholders. During the mid of the current financial year, it offered remaining 5,00,000 shares to 120 persons at a premium of Rs. 10 per share on private placement basis. Ruchi (freelance software consultant) and her sister Rumi (management consultant in Info Solutions Limited), along with twelve ot…
In the given case scenario, suppose the company has failed to allot the shares within the statutorily allowed period. In such a case, the only remedy available with the company is to refund the application money. State the time period within which the company is required to refund the application money to the subscribers if it has failed to allot the shares within the statutorily allowed period.
(A) The application money must be refunded within sixty days from the expiry of statutorily period allowed within which the allotment of shares ought to have been made.
(B) The application money must be refunded within forty-five days from the expiry of statutorily period allowed within which the allotment of shares ought to have been made.
(C) The application money must be refunded within thirty days from the expiry of statutorily period allowed within which the allotment of shares ought to have been made.
(D) The application money must be refunded within fifteen days from the expiry of statutorily allowed period within which the allotment of shares ought to have been made.
Q2(i)CSR Committee — mandatory formation criteria (net worth / tu
2 marks hard
Case: Krishnakant Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office in Jaipur and manufacturing units in Mumbai, Kanpur, Delhi and Ludhiana. It has 8 directors including CMD, of which two are independent directors. For FY 2019-20: turnover was Rs. 750.00 crores (more than 20% rise from previous year), net profit was Rs. 6.60 crores (increase of Rs. 1.80 crores over previous year), net worth was Rs. 250.00 crores (more than 15% increase), and authorised and paid-up share capital was Rs. 8.00 crores. A CSR Committee …
Which of the following factors would have prompted Krishnakant Limited to mandatorily form a Corporate Social Responsibility (CSR) Committee for the current financial year?
(A) The net profit had increased to Rs. 6.60 crores and it was more by Rs. 1.80 crores in comparison to previous year's net profit.
(B) The turnover was Rs. 750.00 crores which was an increase of more than 20% as compared to the previous year.
(C) The net worth was Rs. 250.00 crores which when compared to the previous year had registered an increase by more than 15%.
(D) The paid-up share capital was Rs. 8.00 crores.
Q2(ii)CSR spending — minimum percentage of average net profits
2 marks hard
Case: Krishnakant Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office in Jaipur and manufacturing units in Mumbai, Kanpur, Delhi and Ludhiana. It has 8 directors including CMD, of which two are independent directors. For FY 2019-20: turnover was Rs. 750.00 crores (more than 20% rise from previous year), net profit was Rs. 6.60 crores (increase of Rs. 1.80 crores over previous year), net worth was Rs. 250.00 crores (more than 15% increase), and authorised and paid-up share capital was Rs. 8.00 crores. A CSR Committee …
What is the minimum amount (in percentage) that Krishnakant Limited is required to spend during the Financial Year 2020-21 on the CSR activities?
(A) 2% of the average net profits made during the two immediately preceding financial years.
(B) 2% of the average net profits made during the three immediately preceding financial years.
(C) 2.5% of the average net profits made during the two immediately preceding financial years.
(D) 2.5% of the average net profits made during the three immediately preceding financial years.
Q2(iii)CSR implementation via external Section 8 company — minimum
2 marks hard
Case: Krishnakant Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office in Jaipur and manufacturing units in Mumbai, Kanpur, Delhi and Ludhiana. It has 8 directors including CMD, of which two are independent directors. For FY 2019-20: turnover was Rs. 750.00 crores (more than 20% rise from previous year), net profit was Rs. 6.60 crores (increase of Rs. 1.80 crores over previous year), net worth was Rs. 250.00 crores (more than 15% increase), and authorised and paid-up share capital was Rs. 8.00 crores. A CSR Committee …
In the given case scenario, Krishnakant Limited decided to undertake CSR activities on its own. In case, it had decided to engage an external Section 8 company for undertaking its CSR activities and such charitable company is not established by Krishnakant Limited nor it is established by the Central/State Government or by any entity established under an Act of Parliament or a State Legislature, then what should be the established track which this Section 8 company should have in undertaking similar programs or projects which Krishnakant Limited wants it to accomplish?
(A) Track record of minimum one year
(B) Track record of minimum two years
(C) Track record of minimum three years
(D) Track record of minimum four years
Q3Preservation period for charge instrument after satisfaction
1 marks easy
The instrument creating a charge or modification thereon shall be preserved for a period of ______ years from the date of satisfaction of charge by the company.
Q4Board meeting via video conferencing — validity of director'
1 marks easy
Neha is a director of Primus Limited. She intends to participate in the board meeting through video conferencing and has intimated the same to the chairperson at the beginning of calendar year. Advise, Neha for how long such declaration shall be valid.
(A) 1 month
(B) 6 month
(C) 1 year
(D) She has to furnish declaration for each meeting separately
Q5Section 8 company — eligibility for small company status
2 marks easy
Abhilasha and Amrita have incorporated a 'not for profit' private limited company which is registered under Section 8 of the Companies Act, 2013. One of their friends has informed them that their company can be categorized as a 'small company' because as per the last profit and loss account for the year ending 31st March, 2019, its turnover was less than Rs. 2.00 crores and its paid up share capital was less than Rs. 50 Lacs. Advise.
(A) A section 8 company, which meets the criteria of 'turnover' and 'paid-up share capital' in the last financial year, can avail the status of 'small company' only if it acquires at least 5% stake in another 'small company' within the immediately following financial year.
(B) If the acquisition of minimum 5% stake in another 'small company' materializes in the second financial year (and not in the immediately following financial year) after meeting the criteria of 'turnover' and 'paid-up share capital' then with the written permission of concerned ROC, it can acquire the status of 'small company'.
(C) The status of 'small company' cannot be bestowed upon a 'not for profit' company which is registered under Section 8 of the Companies Act, 2013.
(D) A section 8 company, if incorporated as a private limited company (and not as public limited company) can avail the status of 'small company' with the permission of concerned ROC, after it meets the criteria of 'turnover' and 'paid-up share capital'.
Q6Bailment — bailee's liability for loss without negligence (I
2 marks easy
Mr. Sharad has recently shifted from Delhi to Noida. During the shifting some of the furniture was damaged. Mr. Sharad gave the items to Asian Arts, Greater Noida for repair, refabrication, and painting, etc. Asian Arts deals in the sale of furniture and repair thereof. It was decided that the whole work will be done on a lumpsum amount of Rs. 50,000. In between this period, the workshop at Asian Arts caught fire and there was no fault of the proprietors. Goods bailed by Mr. Sharad along with another furniture destroyed in this fire incident. Mr. Sharad has lost furniture due to fire at workshop of Asian Arts. What is the correct statement considering there was no specific contract?
(A) Asian Arts is liable, because fire took place at his place
(B) Asian Arts is liable, because bailment is on going
(C) Asian Arts is not liable because risk of any loss during bailment is need to bear by bailor.
(D) Asian Arts is not liable because fire is not due to any negligence of their part.
Q7Definition of charge under Companies Act
1 marks easy
An interest or lien created on the property or assets of a company or any of its undertakings or both as security is known as:
(A) Debt
(B) Charge
(C) Liability
(D) Hypothecation
Q8Cheque validity period for presentment
1 marks easy
Validity period for the presentment of cheque in bank is—
(A) 3 months
(B) 6 months
(C) 1 year
(D) 2 years
Q9Contract of indemnity — identification
2 marks easy
A contracts to save B against the consequences of any proceedings, which C may take against B in respect of a certain sum of 500 rupees. This is a:
(A) Contract of guarantee
(B) Quasi contract
(C) Contract of indemnity
(D) Void contract
Q10Variation of class rights — effect on another class of share
1 marks easy
In a company if any change of right of one class also affects the right of other class, then:
(A) A resolution should be passed in general meeting in this case
(B) Company need not to do anything else
(C) Written consent of three fourth majority of that other class should be obtained
(D) A resolution in joint meeting of both the classes should be passed
Q11Types of agency — express agency by power of attorney
2 marks easy
A is residing in Delhi and has a house in Mumbai. A appoints B by a power of attorney to take care of his house. State the nature of agency created between A and B:
(A) Implied agency
(B) Agency by ratification
(C) Agency by necessity
(D) Express agency
Q12Transfer of order instrument — indorsement and delivery
1 marks easy
A negotiable instrument that is payable to order can be transferred by:
(A) Simple delivery
(B) Indorsement and delivery
(C) Indorsement
(D) Registered post
Q13Negotiable instrument drawn in favour of minor — validity
1 marks easy
A negotiable instrument drawn in favour of a minor is
(A) Void
(B) Void but enforceable
(C) Valid
(D) Quasi contract
Q14Rules of statutory interpretation — Heydon's Case / Mischief
1 marks easy
The Rule in Heydon's case is also known as—
(A) Purposive construction
(B) Mischief Rule
(C) Golden Rule
(D) None of the Above
Q15Aids to statutory interpretation — internal vs external aids
1 marks easy
Pick the odd one out of the following aids to interpretation—
(A) Preamble
(B) Marginal Notes
(C) Proviso
(D) Usage
Q16Commencement of Act — default date when no specific day is m
1 marks easy
Where an act of parliament does not expressly specify any particular day as to the day of coming into operation of such Act, then it shall come into operation on the day on which
(A) It receives the assent of the President
(B) It receives the assent of the Governor General
(C) It is notified in the official gazette
(D) It receives assent of both the houses of Parliament