Q1Creation and registration of charges — Companies Act 2013
2 marks hard
Case: ACC Private Limited was incorporated in July 2001. Its shares are listed on BSE and NSE. Authorised share capital: ₹20 crore (2 crore equity shares of ₹10 each); paid-up share capital: ₹10 crore (1 crore equity shares of ₹10 each). The Board declared interim dividend in their meeting held on 11th August 2023. The AGM was held on 1st September 2023. The company incurred losses in the previous financial year and in the current financial year upto June 30, 2023. Dividend history for previous five years: FY March 31, 2023 — Nil (0%); March 31, 2022 — ₹1.00/share (10%); March 31, 2021 — ₹1.10/share…
The company can create charge in favour of the lender on the assets which are:
(A) Tangible Assets and situated in India only
(B) Intangible Assets and situated in India only
(C) Assets that are tangible or otherwise and situated in India or Germany
(D) Assets that are tangible or otherwise and situated in India only
Q1(a)Applicability of Companies Act 2013; deemed public company v
5 marks medium
Cross Limited is a company incorporated under the erstwhile Companies Act, 1956 while XYZ Private Limited is a company registered under the Companies Act, 2013. XYZ Private Limited has issued ₹1,00,000 convertible preference shares (carrying right to vote) of ₹100 each and 10,00,000 equity shares of ₹10 each fully paid. Cross Limited is holding all the preference shares and 1,00,000 equity shares of XYZ Private Limited. Examine whether:
Q1(b)CSR applicability and minimum spend calculation — Companies
5 marks medium
HelpIndia Limited was incorporated on 1st April 2022. The balances extracted from its audited financial statements are: FY 2022-23 — Net Profit before tax ₹11.00 crore, Net Profit after tax ₹4 crore; FY 2023-24 — Net Profit before tax ₹10.00 crore, Net Profit after tax ₹5 crore. HelpIndia Limited is considering allocating the minimum required amount for Corporate Social Responsibility (CSR) activities to be undertaken during FY 2024-25, provided it is mandatory to do so. They seek advice on this matter. Furthermore, HelpIndia Limited requests assistance in calculating the minimum amount to be allocated, if necessary, considering the relevant provisions of the Companies Act, 2013.
Q1(c)Foreign exchange for sports event abroad — FEMA 1999
4 marks medium
Mr. Rohan Sharma, an international cricket player, has started Rohan Sharma Cricket Academy, a private coaching club which provides coaching for cricket. The Academy has a cricket team which participates in cricket matches all over India as well as outside India. Rohan Sharma Cricket Academy, in collaboration with Melbourne Cricket Academy, is organizing a cricket event in Melbourne, Australia in May 2024 and June 2024. Rohan Sharma Academy is required to remit USD 2,00,000 to Melbourne Cricket Academy as its share for organizing the cricket event in Melbourne. Advise whether it can get foreign exchange and if so, under what conditions.
Q2Interim dividend — maximum rate restriction when losses incu
2 marks hard
Case: ACC Private Limited was incorporated in July 2001. Its shares are listed on BSE and NSE. Authorised share capital: ₹20 crore (2 crore equity shares of ₹10 each); paid-up share capital: ₹10 crore (1 crore equity shares of ₹10 each). The Board declared interim dividend in their meeting held on 11th August 2023. The AGM was held on 1st September 2023. The company incurred losses in the previous financial year and in the current financial year upto June 30, 2023. Dividend history for previous five years: FY March 31, 2023 — Nil (0%); March 31, 2022 — ₹1.00/share (10%); March 31, 2021 — ₹1.10/share…
The maximum rate at which interim dividend can be declared by the Board during the current financial year is as under:
(A) The board cannot declare the interim dividend at a rate higher than the average dividend declared by the company immediately during preceding two financial years, i.e. 5%.
(B) The board cannot declare the interim dividend at a rate higher than the average dividend declared by the company immediately during preceding three financial years, i.e. 7%.
(C) The board cannot declare the interim dividend at a rate higher than the average dividend declared by the company immediately during preceding four financial years, i.e. 8.5%.
(D) The board cannot declare the interim dividend at a rate higher than the average dividend declared by the company immediately during preceding five financial years, i.e. 9.2%.
Q2(a)Annual return — abridged form and signing requirements — Com
5 marks medium
Explain the following as per the provisions of the Companies Act, 2013:
Q2(b)Bonus issue — conditions and manner — Companies Act 2013
5 marks medium
APR Limited, a company renowned for manufacturing various types of mats, has established a strong brand presence and garnered a commendable reputation over the years. As of March 31, 2023, its Balance Sheet reflects the following financial position: Authorized Share Capital (25,00,000 equity shares of ₹10 each) — ₹2,50,00,000; Issued, subscribed and paid-up Share Capital (10,00,000 equity shares of ₹10 each, fully paid-up) — ₹1,00,00,000; Free Reserves — ₹3,00,00,000. The Board of Directors intends to propose a bonus issue wherein existing shareholders would receive 1 additional share for every 2 shares held. The Board wants to know the conditions and the manner of issuing bonus shares under the provisions of the Companies Act, 2013.
Q2(c)Definitions under General Clauses Act 1897 — movable propert
4 marks medium
Explain the following with reference to the provisions of the General Clauses Act, 1897:
Q3Dividend — deposit, payment and unpaid dividend account time
2 marks hard
Case: ACC Private Limited was incorporated in July 2001. Its shares are listed on BSE and NSE. Authorised share capital: ₹20 crore (2 crore equity shares of ₹10 each); paid-up share capital: ₹10 crore (1 crore equity shares of ₹10 each). The Board declared interim dividend in their meeting held on 11th August 2023. The AGM was held on 1st September 2023. The company incurred losses in the previous financial year and in the current financial year upto June 30, 2023. The company deposited the dividend in a separate account with ABC Bank on 14th August 2023. ₹60,000 of unclaimed dividend was transferre…
In respect of dividend declared which of the Statement is not correct?
(A) The company has transferred the dividend amount to separate bank account within 5 days from the date of declaration of dividend.
(B) The company is required to pay dividend within 30 days from the date of declaration of dividend.
(C) The company is required to transfer the Unpaid dividend to a separate bank account within 10 days from the date of expiry of statutory period from the date of declaration of dividend.
(D) The company is required to prepare a statement containing the names of shareholders, their last known address and the unpaid dividend amount to such each shareholder and place on its website within 90 days from the date of transferring the amount to Unpaid Dividend Account.
Q3(a)Section 8 company — eligibility for licence — Companies Act
5 marks medium
Explain the provisions of the Companies Act, 2013 — who can get a licence to operate as a section 8 company (non-profit organization)?
Q3(b)Security deposit from employee — whether constitutes deposit
5 marks medium
Wood Limited has received ₹4,00,000 as a non-interest bearing security deposit under a contract of employment, from its employee Mr. Cotton. Mr. Cotton draws an annual salary of ₹3,85,000. Analyse under the provisions of the Companies Act, 2013, whether the said amount received by Wood Limited will be considered as deposits or not.
Q3(c)Internal aid to statutory interpretation — reading statute a
4 marks medium
Explain the interpretation of statute aid — 'Read the Statute as a Whole'.
Q4CSR applicability — threshold criteria — Companies Act 2013
2 marks hard
Case: ACC Private Limited was incorporated in July 2001. Its shares are listed on BSE and NSE. Authorised share capital: ₹20 crore (2 crore equity shares of ₹10 each); paid-up share capital: ₹10 crore (1 crore equity shares of ₹10 each). The Board sought advice on CSR applicability and constitution of CSR committee for FY 2023-24. Financial particulars for the immediately preceding financial year: Net worth ₹100 crore, Turnover ₹1010 crore, Net Profit ₹4.9 crore, Borrowings ₹60 crore.
Choose the correct option in terms that whether the provisions of Corporate Social Responsibility are applicable to ACC Private Limited.
(A) The provisions of Corporate Social Responsibility are not applicable to ACC Private Limited as it is a private limited company.
(B) Yes, as ACC Private Limited is having turnover of more than ₹1000 crore.
(C) Yes, as ACC Private Limited is having net profit of more than ₹2.5 crore in the immediately preceding financial year.
(D) Yes, as ACC Private Limited is having net worth of more than ₹50 crore in the immediately preceding financial year.
Q4(a)Periodical financial results — Central Government direction
5 marks medium
Crystal Limited recently received a communication from the Central Government requesting the preparation of periodical financial results along with the completion of either a full audit or a limited review of these financial results. The Board of Directors has raised an objection, arguing that Crystal Limited, being an unlisted company, is not obligated to prepare periodical financial results. Analyze the situation, citing relevant provisions of the Companies Act, 2013, with respect to the company's obligation regarding the preparation of periodical financial results.
Q4(b)Designated partners — eligibility when partners include body
5 marks medium
Mr. Prateek (an individual) has started a Limited Liability Partnership firm along with Brown Limited and Picture Limited. As per the provisions of the Limited Liability Partnership Act, 2008, advise the Limited Liability Partnership firm about who can be the designated partners of the firm.
Q4(c)Internal aid to interpretation — headings and chapter titles
4 marks medium
In what way is 'Heading and Title of a Chapter' considered as internal aid in the interpretation of statutes?
Q5AGM notice period calculation — Companies Act 2013
2 marks hard
Case: ACC Private Limited was incorporated in July 2001. Its shares are listed on BSE and NSE. Authorised share capital: ₹20 crore (2 crore equity shares of ₹10 each); paid-up share capital: ₹10 crore (1 crore equity shares of ₹10 each). The Annual General Meeting of the company was held on 1st September 2023.
The notice for the Annual General Meeting should be served by:
(A) 6th August 2023
(B) 7th August 2023
(C) 8th August 2023
(D) 10th August 2023
Q5(a)Winding up of LLP by Tribunal — grounds — LLP Act 2008
5 marks medium
Enumerate the circumstances in which a Limited Liability Partnership may be wound up by the Tribunal. Give your answer in respect of the provisions of the Limited Liability Partnership Act, 2008.
Q5(b)Mandatory internal auditor — threshold for unlisted company
5 marks medium
Kesar Limited, an unlisted company, furnishes the following data: (a) Paid-up share capital as on 31st March 2024 — ₹49 crore; (b) Turnover for the year ended 31st March 2024 — ₹100 crore; (c) Outstanding loan from bank as on 3rd March 2024 is ₹102 crore (₹105 crore loan originally obtained from bank) and the outstanding balance as on 31st March 2024 is ₹95 crore after repayment. Considering the above scenario and in accordance with the provisions of the Companies Act, 2013, determine whether Kesar Limited is required to appoint an Internal Auditor during the financial year 2024-2025.
Q5(c)Dividend payment timeline after AGM declaration — General Cl
4 marks medium
Sheesham Limited is a company engaged in the business of manufacturing premium quality furniture in the state of Tamil Nadu. In light of the provisions of the General Clauses Act, 1897, and the Companies Act, 2013, please advise on the specific timelines regarding the payment of dividends subsequent to its declaration at the Annual General Meeting (AGM) held on 8th August 2023.
Q6Resident status of designated partner — LLP Act 2008
2 marks hard
Case: Sudeep and Ankit formed M/s Etharkkum Advisors LLP on 17th April 2020 to provide Financial and Investment Consultancy Services. The LLP Deed provides that a new partner may be admitted with capital contribution in kind or cash, and must deposit the agreed capital within six months of admission. The LLP's office was destroyed due to an earthquake. M/s Etharkkum Advisors LLP approached Manoj on 1st January 2023 to join as third partner. Manoj was out of India from 1st September 2021 to 23rd December 2022. He agreed to contribute his office premises at Sanjay Place, Palwal and ₹5,00,000 as capita…
Whether Manoj could be considered as resident or not as per the Limited Liability Partnership Act, 2008?
(A) Manoj could not be considered resident in India as he was not in India for 182 days in preceding one year
(B) Manoj could not be considered resident in India as he was not in India for 120 days in preceding one year i.e. only for 33 days from 24th December 2022 to 25th January 2023
(C) Manoj could not be considered as he was not in India for 182 days during the financial year
(D) Manoj will be considered as resident in India as he was in India for 120 days during the financial year (2021-2022)
Q6(a)Inspection of register of charges — Companies Act 2013
5 marks medium
Explain the provisions of the Companies Act, 2013, in respect of 'Inspection of Register of Charges and Instrument of Charges'.
Q6(a)-ORMinutes of meetings — exclusions by Chairman and time limit
5 marks medium
Enumerate the provisions of the Companies Act, 2013 in respect to the following:
Q6(b)Prospectus of foreign company — documents to be annexed — Co
5 marks medium
What are the documents that must be annexed to a prospectus offering for subscription in securities of a company incorporated or to be incorporated outside India, as per the Companies (Registration of Foreign Companies) Rules, 2014?
Q6(c)Foreign exchange withdrawal for cultural performance abroad
4 marks medium
University of Oxford is planning a cultural event in UK in May 2024 and has invited Ms. Kanika Tripathi and her group, an Indian artist, to perform at the event. Ms. Kanika Tripathi needs to withdraw foreign exchange of USD 75,000 for the purpose of her visit to UK for performing at the cultural event of University of Oxford. Advise whether she can withdraw foreign exchange and if so, under what conditions.
Q7Valuation of capital contribution in kind — LLP Act 2008
2 marks hard
Case: Sudeep and Ankit formed M/s Etharkkum Advisors LLP on 17th April 2020 to provide Financial and Investment Consultancy Services. The LLP Deed provides that a new partner may be admitted with capital contribution in kind or cash, and must deposit the agreed capital within six months of admission. M/s Etharkkum Advisors LLP approached Manoj on 1st January 2023 to join as third partner. Manoj was out of India from 1st September 2021 to 23rd December 2022. He agreed to contribute his office premises at Sanjay Place, Palwal and ₹5,00,000 as capital contribution. Manoj joined the firm on 25th January…
What would be the worth of Capital Contribution by Manoj?
(A) ₹25,00,000
(B) ₹32,25,000
(C) ₹37,25,000
(D) ₹35,00,000
Q8Partner's obligation to contribute capital post-dissolution
2 marks hard
Case: Sudeep and Ankit formed M/s Etharkkum Advisors LLP on 17th April 2020 to provide Financial and Investment Consultancy Services. The LLP Deed provides that a new partner may be admitted with capital contribution in kind or cash, and must deposit the agreed capital within six months of admission. Manoj joined the firm on 25th January 2023 as limited liability partner, agreeing to contribute his office premises and ₹5,00,000 as capital contribution. He provided the office from his admission date and promised to deposit ₹5,00,000 within six months. Before Manoj could deposit the amount, the firm w…
Whether Manoj will be liable to contribute ₹5,00,000 after dissolution of the firm?
(A) Yes, because a partner is personally liable for the deficiency arising at the time of dissolution of LLP.
(B) No, because a partner is never personally liable for the deficiency arose at the time of dissolution of LLP.
(C) Yes, the partner is under obligation to contribute money also to LLP as per the agreement.
(D) No, because a partner is personally liable only upto the amount contributed to the LLP on the date of dissolution of LLP.
Q9Private placement — QIB exclusion from prescribed limit — Co
2 marks easy
Finload Limited wants to raise funds for its upcoming project. Accordingly, it has issued private placement offer letters for issuing equity shares to 57 persons, of which six are qualified institutional buyers and remaining are individuals. Choose the correct statement as per the provisions of the Companies Act, 2013.
(A) Finload Limited company is a public limited company hence it cannot issue shares through private placement.
(B) Since Finload Limited has made an offer or invitation to more than the prescribed number of persons, it shall be deemed to be an offer to the public and accordingly, it shall be governed by the provisions relating to prospectus.
(C) Finload Limited has made an offer or invitation to less than the prescribed number of persons as qualified institutional buyers are not counted to calculate the prescribed limit.
(D) Finload Limited cannot issue shares to qualified institutional buyers, as under private placement shares cannot be issued to qualified institutional buyers.
Q10Associate company — significant influence — Companies Act 20
2 marks easy
Company X, a leading automobile manufacturer, has invested in Company Y, a start-up specializing in electric vehicle technology. Company X holds a 25% stake in Company Y and actively participates in its strategic decisions. Based on the provisions of the Companies Act 2013 regarding associate companies, which of the following statements is correct?
(A) Company X's investment in Company Y does not qualify as an associate company because Company X does not have control of at least 50% of the total voting power.
(B) Company Y qualifies as an associate company of Company X since Company X holds a 25% stake in Company Y and actively participates in its strategic decisions.
(C) Company Y cannot be considered an associate company of Company X because it is a start-up and does not meet the minimum criteria for significant influence.
(D) Company X's investment in Company Y falls under the category of joint venture and does not qualify as an associate company according to the Companies Act 2013.
Q11Body corporate definition — General Clauses Act s.8 — LLP Ac
2 marks hard
Case: M/s Aryan & Aryan LLP was registered on 2nd July 2019. Sudeep and Ankit were partners and designated partners. The LLP deals in manufacturing and trading of electric ceiling fans. Krtiken Electronics Private Limited was incorporated on 1st June 2017 to deal in electronics; its memorandum and articles of association authorised it to work as partner in a LLP. Mrs. Archika Jain advised that Krtiken Electronics Private Limited could not be a partner in M/s Aryan & Aryan LLP because the term 'body corporate' in the LLP Act 2008 was defined as a company under section 3 of the Companies Act, 1956, an…
Whether Krtiken Electronics Private Limited could be partner in M/s Aryan & Aryan LLP?
(A) No, as Krtiken Electronics Private Limited is not a body corporate as per the definition of 'Body Corporate' given in Limited Liability Partnership Act, 2008.
(B) Yes, because section 8 of the General Clauses Act, 1897 provides where any Act or Regulation made after the commencement of this Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted. Therefore, after the enactment of Companies Act, 2013, the definition of 'Body Corporate' should be construed as a company which is defined in section 2(20) of the Companies Act, 2013.
(C) No, as provisions of section 8 of the General Clauses Act, 1897 will not be applicable because the Limited Liability Partnership (Amendment) Act, 2021, which amended the definition of 'Body Corporate' considering the company registered under Companies Act, 2013, came to effect from 01.04.2022.
(D) Yes, as the provisions of the General Clauses Act, 1897 are not applicable while interpreting the provisions of the Limited Liability Partnership Act, 2008.
Q12Intimation of new partner to registrar — deadline calculatio
2 marks hard
Case: M/s Aryan & Aryan LLP was registered on 2nd July 2019. Sudeep and Ankit were partners and designated partners. Ms. Shanaya was admitted as a new partner on 17th January 2024; the firm intimated the registrar about her admission on 31st January 2024. On 3rd February 2024, Ms. Shanaya met with an accident and lost her memory; she was declared of unsound mind by a competent court.
Following the provisions of Limited Liability Partnership Act, 2008 read with the General Clauses Act, 1897, what should be the last date to inform the registrar about the admission of Ms. Shanaya?
(A) 15th February 2024
(B) 16th February 2024
(C) 17th February 2024
(D) 18th February 2024
Q13Cessation of partner declared unsound mind — masculine gende
2 marks hard
Case: M/s Aryan & Aryan LLP was registered on 2nd July 2019. Sudeep and Ankit were partners and designated partners. Ms. Shanaya was admitted as a new partner on 17th January 2024; the firm intimated the registrar about her admission on 31st January 2024. On 3rd February 2024, Ms. Shanaya met with an accident and lost her memory; the doctor declared her of unsound mind to work as partner in M/s Aryan & Aryan LLP, as confirmed by a competent court.
What would be the status of Ms. Shanaya in the firm, M/s Aryan & Aryan LLP after the accident?
(A) She would continue as a partner in M/s Aryan & Aryan LLP even after being declared as of unsound mind.
(B) Section 24(2) of the Limited Liability Partnership Act, 2008 provides that a person shall cease to be a partner of a LLP if he is declared to be of unsound mind by a competent court. As this sub-section provides only for male person ('he'), she would continue as a partner in M/s Aryan & Aryan LLP.
(C) Following the provisions of the General Clauses Act, 1897 which provides that in all legislations and regulations, unless there is anything repugnant in the subject or context words importing the masculine gender shall be taken to include females. Hence, Ms. Shanaya will cease to be a partner of M/s Aryan & Aryan LLP.
(D) She can continue as partner if all other partners agree for that.
Q14Current account transactions — RBI approval under FEMA 1999
2 marks easy
HBL Private Limited is a project engineering, procurement and construction company. The company has bagged a contract from the Government of Tamil Nadu for construction of a Water Dam. The company involved a project consultancy firm situated in Netherlands for preparing a techno-economic feasibility report and paid USD 7,000,000. The company also availed services of a Software Company in UK for migration of its accounting software from SAP to Oracle and paid USD 2,000,000. Considering the provisions of the Foreign Exchange Management Act, 1999, which of the below mentioned statements is correct?
(A) The company can make payment of USD 7,000,000 and USD 2,000,000 without any approval.
(B) The company can make payment of USD 7,000,000 without any approval and USD 2,000,000 after obtaining prior approval of the Reserve Bank of India (RBI).
(C) The company can make payment of USD 7,000,000 and USD 2,000,000 after obtaining prior approval of RBI.
(D) The company can make payment of USD 7,000,000 after obtaining prior approval of RBI and USD 2,000,000 without any approval.
Q15Residential status under FEMA 1999 — student going abroad fo
2 marks easy
Ms. Shalini Gupta had enrolled for a three-year management course with IIM, Ahmedabad — two years at the IIM campus and one year at University of Auckland under a student exchange programme. She was required to pay tuition fee of ₹10 lakh to IIM, Ahmedabad and USD 2,00,000 to University of Auckland. Ms. Shalini left India on 20th August 2022 to complete her degree from University of Auckland. In the last month of her final year, she got an offer from a reputed company in Auckland, accepted it, and decided to work there. On 1st September 2023, Ms. Shalini visited India for 30 days to meet her family and on 1st October 2023 left India to carry on her employment. Considering the provisions of the Foreign Exchange Management Act, 1999, which of the below mentioned options correctly determines the residential status of Ms. Shalini Gupta?
(A) Ms. Shalini Gupta to be treated as resident in India for Financial Year (FY) 2023-2024 and FY 2024-2025.
(B) Ms. Shalini Gupta to be treated as resident in India for FY 2022-2023 and FY 2023-2024.
(C) Ms. Shalini Gupta to be treated as non-resident for FY 2023-2024 and FY 2024-2025 as she left India for higher studies.
(D) Ms. Shalini Gupta to be treated as resident in India for FY 2023-2024 since she stays in India for more than 182 days and non-resident for FY 2024-2025.