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Past papers › Corp Laws › May 2020

CA Inter Corp Laws — Mock Test Paper (MTP) — May 2020

This page contains all 25 questions from the CA Inter Corporate & Other Laws Mock Test Paper (MTP) for the May 2020 attempt cycle, sourced from VSI Jaipur.

QB.1Sweat equity shares; interim dividend; discharge of surety;
19 marks very hard
Answer the following sub-questions:
QB.2Authentication of financial statements; poll demand at AGM;
17 marks very hard
Answer the following sub-questions:
QB.3Expert liability in prospectus; auditor disqualification; ho
17 marks very hard
Answer the following sub-questions:
QB.4Doctrine of indoor management; deposit provisions; dividend
17 marks very hard
Answer the following sub-questions:
QB.5Forged transfer of shares; charge registration under Compani
17 marks very hard
Answer the following sub-questions:
Q1(A)CSR Committee mandatory formation criteria
2 marks hard
Case: Vishal Crockery Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office located in Jaipur and its manufacturing units spread out in Mumbai, Kanpur, Delhi and Ludhiana. Under the dynamic leadership of Hans Rajpal, the Chairman and Managing Director (CMD) of the company, it could easily be ascertained that the company had reached the new heights of success. The directors of the company numbered eight including CMD of which two were the independent directors. The turnover of the company for the Financial Year 2018-201…
Which of the following criterion prompted Vishal Crockery 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 increased by 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.
Q1(B)CSR minimum spending requirement – Section 135
2 marks hard
Case: Vishal Crockery Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office located in Jaipur and its manufacturing units spread out in Mumbai, Kanpur, Delhi and Ludhiana. Under the dynamic leadership of Hans Rajpal, the Chairman and Managing Director (CMD) of the company, it could easily be ascertained that the company had reached the new heights of success. The directors of the company numbered eight including CMD of which two were the independent directors. The turnover of the company for the Financial Year 2018-201…
What is the minimum amount (in percentage form) that Vishal Crockery Limited is required to spend during the Financial Year 2019-20 on the CSR activities after it formed a Corporate Social Responsibility Committee?
(A) Minimum 2% of the average net profits made during the two immediately preceding financial years.
(B) Minimum 2% of the average net profits made during the three immediately preceding financial years.
(C) Minimum 2.5% of the average net profits made during the two immediately preceding financial years.
(D) Minimum 2.5% of the average net profits made during the three immediately preceding financial years.
Q1(C)CSR implementation through external Section 8 company – trac
2 marks hard
Case: Vishal Crockery Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of Companies, Rajasthan with its registered office located in Jaipur and its manufacturing units spread out in Mumbai, Kanpur, Delhi and Ludhiana. Under the dynamic leadership of Hans Rajpal, the Chairman and Managing Director (CMD) of the company, it could easily be ascertained that the company had reached the new heights of success. The directors of the company numbered eight including CMD of which two were the independent directors. The turnover of the company for the Financial Year 2018-201…
In the given case scenario, Vishal Crockery Limited decided to undertake CSR activities at 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 Vishal 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 Vishal Crockery 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) None of the above
Q2(A)Acceptance of deposits – amount received from director's rel
2 marks hard
Case: Vivek Shah is the Chief Finance Officer (CFO) and Sachin Bhatt is the Company Secretary of Jitendra Iron Works Private Ltd (JIWPL), in Manipal, Karnataka. JIWPL is an integrated set up of foundries and machine shops that add value by machining more than 75% of the castings manufactured to fully finished condition. JIWPL is one of the largest jobbing foundries producing grey iron castings required for automobile, farm equipment sector and diesel engines industry. JIWPL serves customers globally. The turnover of JIWPL is about Rs. 600 Crores, including export turnover of about Rs. 250 Crores. Du…
JIWPL received an amount of Rs 25 Crores from Malini Shetty, wife of one of the promoter directors Mahesh Shetty of JIWPL. Mahesh Shetty wanted to know from Sachin Bhatt any compliance needed from the perspective of acceptance of deposits. The CS has to ensure:
(A) That the particulars of amount received are immediately entered in the register of deposits maintained in such manner and in such format as prescribed.
(B) To issue immediately a circular to the members of the company with a statement of deposits accepted as on date with the names of each depositor, amount(s) received as on date, the due date(s) and the liability(ies) on the due date(s) in respect of each depositor.
(C) That a declaration is to be obtained to the effect that the amount given is not sourced from borrowed funds or accepting loans or deposits from others and disclose the details in the Board's Report.
(D) To file the particulars of deposits received within 30 days from the date of its receipt with the Registrar.
Q2(B)Floating charge – mode of creation
2 marks hard
Case: Vivek Shah is the Chief Finance Officer (CFO) and Sachin Bhatt is the Company Secretary of Jitendra Iron Works Private Ltd (JIWPL), in Manipal, Karnataka. JIWPL is an integrated set up of foundries and machine shops that add value by machining more than 75% of the castings manufactured to fully finished condition. JIWPL is one of the largest jobbing foundries producing grey iron castings required for automobile, farm equipment sector and diesel engines industry. JIWPL serves customers globally. The turnover of JIWPL is about Rs. 600 Crores, including export turnover of about Rs. 250 Crores. Du…
JIWPL was sanctioned an amount of Rs. 50 Crores for meeting the working capital needs of the expansion project, which included interchangeable limits of cash credit, foreign and inland bills for negotiation and acceptance. The security cover was floating charge on the book debts, inventory and other current assets of the expansion project of JIWPL. A floating charge, in general, is created by way of:
(A) Passing a board resolution
(B) Signing and acknowledging the Credit Sanction letter
(C) Mortgage
(D) Hypothecation or lien
Q2(C)Maintenance of Register of Members at place other than regis
2 marks hard
Case: Vivek Shah is the Chief Finance Officer (CFO) and Sachin Bhatt is the Company Secretary of Jitendra Iron Works Private Ltd (JIWPL), in Manipal, Karnataka. JIWPL is an integrated set up of foundries and machine shops that add value by machining more than 75% of the castings manufactured to fully finished condition. JIWPL is one of the largest jobbing foundries producing grey iron castings required for automobile, farm equipment sector and diesel engines industry. JIWPL serves customers globally. The turnover of JIWPL is about Rs. 600 Crores, including export turnover of about Rs. 250 Crores. Du…
The registered office of JIWPL is located in Manipal. Out of the company's 180 Members, 20 members, who are entered in the Register of Members (ROM) reside in Mangaluru, a nearby city. These members requested the company to maintain the Register of Members (ROM) in the company's liaison office in Mangaluru, instead of Manipal henceforth. Which of the following positions is legally correct?
(A) The ROM shall be maintained only at the registered office in Manipal and maintaining in a place other than the registered office is not permitted under the Companies Act 2013 and the relevant Rules thereunder.
(B) By passing a Special Resolution in a General Meeting, the ROM can be maintained in Mangaluru.
(C) The Board of Directors by passing a Board Resolution in one of its meetings, may direct the Company Secretary to maintain the ROM in Mangaluru.
(D) If more than 1/3rd of the members, whose names are entered in the ROM request for the change, then only the ROM can be maintained at Mangaluru after passing a Special Resolution in a General Meeting.
Q3Notice requirement for appointing auditor other than retirin
1 marks easy
For appointing an auditor other than the retiring auditor, which of the following is required?
(A) Special notice is required.
(B) Ordinary notice is required.
(C) Neither ordinary nor special notice is required.
(D) Approval of Central Government is required.
Q4Types of resolutions – ordinary resolution
1 marks easy
Which one of the following requires ordinary resolution?
(A) to change the name of the company
(B) to alter the articles of association
(C) to reduce the share capital
(D) to declare dividends
Q5Effective date of company name change – certificate of incor
1 marks easy
Swastik Private Limited passed a Special Resolution to change its name to Swastik Darshan Private Limited on 30th May, 2019. Relevant MCA filing was done on due time and then Company got its new stationery printed on 1st July, 2019. However there was a delay in issue of Certificate and Company received new certificate on 20th August, 2019 which was issued on 10th August, 2019. Company wants to enter into a lease agreement for new premise. When can they do such agreement in the new name of the Company?
(A) 30th May, 2019
(B) 1st July, 2019
(C) 20th August, 2019
(D) 10th August, 2019
Q6Shelf prospectus – validity and use for repeated public offe
1 marks easy
Extra Limited is a growing Company and requires additional funds for expansion from time to time. They are following the same process for making an offer to public and then issue those shares. This is very time and energy consuming for them. Kindly advise them if there is any way out.
(A) During first offer they shall file prospectus with a validity of one year, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required.
(B) During first offer they shall file prospectus with a validity of two years, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required.
(C) During first offer they shall file shelf prospectus with a validity of one year, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required.
(D) During first offer they shall file shelf prospectus with a validity of two years, so subsequent offer issued during the period of validity of that prospectus, no further prospectus is required.
Q7Definition of immovable property
1 marks easy
Which of the following is not an Immovable Property?
(A) Land
(B) Building
(C) Timber
(D) Machinery permanently attached to the land
Q8Maturity of instrument falling on public holiday – NI Act 18
1 marks easy
As per the Negotiable Instruments Act, 1881, when the day on which a promissory note or bill of exchange is at maturity is a public holiday, the instrument shall be deemed to be due on the ______.
(A) said public holiday
(B) 5 days succeeding public holiday
(C) next succeeding business day
(D) next preceding business day
Q9Rules of statutory interpretation – beneficial construction
1 marks easy
Rule of Beneficial construction is also known as—
(A) Purposive construction
(B) Mischief Rule
(C) Heydon's Rule
(D) All of the Above
Q10Legal terminology – deed
1 marks easy
Formal legal document which creates or confirms a right or records a fact is a—
(A) Document
(B) Deed
(C) Statute
(D) Instrument
Q11Negotiable instrument drawn in favour of a minor
1 marks easy
A negotiable instrument drawn in favor of a minor is
(A) Void
(B) void but enforceable
(C) Valid
(D) none of the above
Q12Purpose and role of preamble in legislation
1 marks easy
The preamble is most important in any legislation, it:
(A) Provides definitions in the Act.
(B) Expresses scope, object and purpose of the Act.
(C) Provides summary of the entire Act.
(D) None of the above.
Q13Maximum number of members in a private company – joint holde
2 marks easy
In Roopali Marketing Company Private Limited (Authorised capital 50,000 shares of Rs. 10 each and paid-up share capital of Rs. 4,50,000), 1000 shares are jointly held by Abeer and Abheek; another 800 shares are jointly held by Seema and Srividya; and another 1200 are jointly held by Ramesh, Raksha and Rajneesh. Further, 42,000 shares are held by 193 individual persons in their individual capacity. Is it possible for the company to induct more persons?
(A) The company is unable to induct more persons since it already has two hundred individual members.
(B) The company can induct four more persons as members.
(C) The company can induct another 20 persons (i.e. 10% of two hundred individual members) after seeking permission from the concerned ROC.
(D) If the company does not want to seek permission of the concerned ROC, it can induct only 10 more persons (i.e. 5% of two hundred individual members).
Q14Contract of indemnity – rights of indemnified party and cred
2 marks easy
Atul contracts to indemnify Neha against the consequences of any proceedings which Chirag may take against Neha in respect of a sum of Rs. 15000/- advanced by Chirag to Neha. Now, Neha who is called upon to pay the sum of money to Chirag but she fails to do so. As per the provisions of the Indian Contract Act, 1872, advise the future course of action to be taken by Chirag.
(A) Chirag can recover the amount only from Neha
(B) Chirag can recover the full amount from Atul
(C) Chirag cannot recover the amount from Atul
(D) Chirag can recover at least 10% of the total amount from Neha
Q15Bailment vs custody – car parking with keys retained
2 marks easy
Mr. Vishal parks his car at a parking lot, locks it, and keeps the keys with himself. Which of the following statement is correct in this regard?
(A) This is a case of bailment
(B) The parking people has possession of the car of Mr. Vishal
(C) The parking people has custody of car of Mr. Vishal
(D) This is the case of mortgage
Q16Endorsement under NI Act – finder of cheque after endorsee's
2 marks easy
M drew a cheque amounting to Rs. 2 lakh payable to N and subsequently delivered to him. After receipt of cheque N endorsed the same to C but kept it in his safe locker. After sometime, N died, and P found the cheque in N's safe locker. State the nature of the instrument as amounting to endorsement under the Negotiable Instruments Act, 1881.
(A) Yes it's an endorsement, as P becomes the holder of the cheque that he found in the N's safe locker.
(B) No, it's not an endorsement, as P does not become the holder of the cheque.
(C) Yes, it's an endorsement, as P was a ultimate custodian of the cheque.
(D) No, it's not an endorsement, as N endorsed it to C and not to the P.