Question 1

What is the last date for conducting AGM for E Limited?

Accepted Answer

**Answer: (D) 31st December, 2023**

Under **Section 96(1) of the Companies Act, 2013**, every company must hold its Annual General Meeting. For the **first AGM**, it must be held within **9 months from the end of the first financial year**.

E Limited was incorporated on **2nd January, 2022** and elected to prepare its first financial statements for the period **2nd January, 2022 to 31st March, 2023**. This is permissible under **Section 2(41) of the Companies Act, 2013**, which allows the first financial year of a newly incorporated company to be a period of less than or up to **15 months** from the date of incorporation (2nd Jan 2022 to 31st March 2023 = approx. 14 months and 29 days, within the 15-month limit).

Since the **first financial year ends on 31st March, 2023**, the last date for holding the first AGM is:

31st March, 2023 + 9 months = **31st December, 2023**

This is further corroborated by the fact stated in the question that E Limited actually conducted its AGM on **16th August, 2023**, which falls well within this deadline. The last permissible date, however, remains **31st December, 2023**.

Question 2

What is the due date for conducting AGM for Golden Limited for the year ended March 31, 2023?

Accepted Answer

**Answer: (A) 30th September, 2023**

Under **Section 96(1) of the Companies Act, 2013**, every company (other than a One Person Company) must hold its Annual General Meeting within **6 months from the close of its financial year**. Since Golden Limited's financial year ends on **31st March, 2023**, the due date for holding its AGM is **30th September, 2023**.

Golden Limited is a listed company incorporated in 2013; it is not holding its first AGM (which would have a 9-month window under the proviso to Section 96(1)). For all subsequent AGMs, the 6-month rule applies. Accordingly, the statutory due date is 30th September, 2023.

In the given facts, Golden Limited actually held its AGM on **26th September, 2023**, which is within the due date, confirming compliance with Section 96 of the Companies Act, 2013.

Question 3

The Companies Act, 2013 provides that in addition to standalone financial statement, the company shall also prepare consolidated financial statements which shall also be presented at AGM. Accordingly, the consolidated financial statements of Golden Limited for the financial year ended 31st March, 2022 includes, financial statements of:

Accepted Answer

**Answer: (C)**

For the consolidated financial statements of Golden Limited for the financial year ended 31st March, 2022, the scope of consolidation includes:

**Entities to be included:**

**1. Golden Limited:** The holding/parent company is always the base entity in consolidation.

**2. D Limited:** Incorporated on 8th January, 2022 as a wholly owned subsidiary of Golden Limited. Being incorporated before the reporting date of 31st March, 2022, D Limited existed during the financial year and should be consolidated from the date of its acquisition/incorporation. Its first financial statements are for 8th January, 2022 to 31st March, 2022 (3 months).

**3. E Limited:** Incorporated on 2nd January, 2022 as a wholly owned subsidiary of Golden Limited. This subsidiary also exists on 31st March, 2022 and should be consolidated. The fact that E Limited has elected to prepare its first financial statements for a 14-month period (2nd January, 2022 to 31st March, 2023) does not affect its consolidation in Golden Limited's FS for 31st March, 2022. Adjustments for different reporting periods are made during consolidation, but the subsidiary must be included. Under Ind AS 110 and Section 129 of the Companies Act, 2013, subsidiaries acquired/incorporated during the year are consolidated from the date of acquisition if they exist on the reporting date.

**4. XYZ & Co. (Partnership Firm):** On 5th January, 2022, E Limited acquired 100% partnership interest in XYZ & Co. Under Ind AS 110 (…

Question 4

The Companies Act, 2013 provides that in addition to standalone financial statement, the company shall also prepare consolidated financial statements which shall also be presented before AGM. Accordingly, the consolidated financial statements of Golden Limited for the financial year ended 31st March, 2023 includes:

Accepted Answer

**Answer: (D) Golden Limited, D Limited, E Limited, F Limited and XYZ & Co., partnership firm**

Under **Section 129(3) of the Companies Act, 2013**, a company having subsidiary or subsidiaries shall prepare a **consolidated financial statement (CFS)** of the company and all its subsidiaries. The relevant standard governing consolidation is **Ind AS 110 – Consolidated Financial Statements**, which requires consolidation of all entities **controlled** by the parent, including indirect subsidiaries and entities that are not companies (such as partnership firms).

**Inclusion of each entity:**

**D Limited** is a wholly owned direct subsidiary of Golden Limited, incorporated on 8th January 2022. Its first financial statements covered 8 Jan 2022 to 31 March 2022, meaning for FY 2022-23 it prepares normal financial statements for 1 April 2022 to 31 March 2023. D Limited must be **included** in the CFS.

**E Limited** is a wholly owned direct subsidiary of Golden Limited, incorporated on 2nd January 2022. It elected to prepare its first financial statements for the period **2 January 2022 to 31 March 2023** (a 15-month period permitted under Section 2(41) of the Companies Act, 2013 for newly incorporated companies). E Limited's AGM was held on **16 August 2023**, which is **before** Golden Limited's Board meeting date of 20 August 2023. Therefore, E Limited's financial statements for the period ending 31 March 2023 were available before Golden Limited's CFS was approved. E Limited …

Question 5

Please select which is the correct option / which is the most correct statement:

Accepted Answer

**Answer: (B)**

Golden Limited is a **listed company** with its **registered office at Delhi** and corporate office in Noida. The question tests knowledge of AGM venue and timing requirements under the Companies Act, 2013.

**Venue Requirement**: Section 110 of the Companies Act, 2013 mandates that the AGM shall be held at the **registered office of the company** or at such other place as may be prescribed. For Golden Limited, the registered office is in **Delhi** (not Noida, the corporate office, and not Mumbai). Options A and C are therefore incorrect on venue.

**Timing Requirement**: Section 110 specifies that the AGM shall be held during **business hours between 9:00 A.M. and 5:00 P.M.** The time 8:30 A.M. falls **before the prescribed business hours**, making Option D incorrect. The time 11:00 A.M. is appropriate and within prescribed hours.

**Date Compliance**: The AGM for FY 2022-23 (year ended 31st March, 2023) was held on 26th September, 2023, which is within the **6-month period** required by Section 96 of the Companies Act, 2013 (by 30th September, 2023).

**Analysis of Options**:
- **(A)** Mumbai venue - incorrect; venue must be registered office (Delhi)
- **(B)** Delhi venue - correct; 11:00 A.M. time - correct; most accurate option
- **(C)** Noida venue - incorrect; venue must be registered office (Delhi), not corporate office; also date is 27th, not 26th
- **(D)** 8:30 A.M. time - incorrect; violates Section 110 (before business hours commence at 9:00 A.M.)
…

Question 6

Considering the provisions of the Foreign Exchange Management Act, 1999, which of the following options correctly determines the residential status of Mr. Rajat Kapoor:

Accepted Answer

**Answer: (B)**

Under **Section 2(v) of the Foreign Exchange Management Act, 1999 (FEMA)**, a "**person resident in India**" means a person residing in India for **more than 182 days during the course of the preceding financial year**. However, this definition explicitly **excludes** a person who has gone out of India or stays outside India **for carrying on a business or vocation outside India**, or for any other purpose indicating an intention to stay outside India for an uncertain period.

**Residential Status for FY 2022-23:**

To determine Mr. Rajat's status for FY 2022-23, we examine his presence in the **preceding financial year FY 2021-22**.

Mr. Rajat was present in India from **1st April 2021 to 2nd November 2021** (approx. 216 days), and again from **12th February 2022 to 26th February 2022** (14 days) — totalling more than 182 days in FY 2021-22. Ordinarily, this would make him a resident for FY 2022-23.

However, Mr. Rajat **left India on 2nd November 2021 for carrying on the business of Omx Software Inc (a business situated outside India)**, and again departed on **26th February 2022** for the same purpose. His visit from 12th–26th February 2022 was a temporary family visit and does not break the continuity of his stay abroad for business purposes.

Since he left India **for carrying on a business outside India**, he falls under the **exclusion clause of Section 2(v) of FEMA**. Accordingly, **Mr. Rajat is treated as a Non-Resident for FY 2022-23**.

**Residenti…

Question 7

Considering the provisions of the Foreign Exchange Management Act, 1999, how much amount can the company remit outside India for obtaining consultancy services from the US company without prior approval of RBI?

Accepted Answer

**Answer: (A)**

Under the **Foreign Exchange Management (Current Account Transactions) Rules, 2000** read with RBI Master Directions on Import of Goods and Services, an Indian company can remit foreign exchange for **consultancy services** obtained from a foreign entity without prior approval of the Reserve Bank of India up to **USD 1,000,000 (USD Ten Lakh) per project**.

In the given case, Omx Software Private Limited is importing consultancy services from a company situated in USA for the development of software to be used for rendering services to its customers in India. Such a remittance constitutes a **current account transaction** under Section 2(j) of the **Foreign Exchange Management Act, 1999**. Current account transactions are generally permissible unless restricted by the Central Government in consultation with RBI.

The prescribed limit for remittance towards **technical/consultancy services** from abroad without obtaining prior RBI approval is **USD 1,000,000 per project**, to be routed through an Authorized Dealer Bank. Any remittance beyond this threshold requires prior approval of the RBI.

Therefore, the permissible amount that Omx Software Private Limited can remit to the US company for obtaining consultancy services **without prior RBI approval is USD 1,000,000 per project**.

Question 8

Considering the provisions of the Foreign Exchange Management Act, 1999, in respect of purchase of residential property by Mr. Rajat in USA, which of the following statements is correct?

Accepted Answer

**Answer: (C) Purchase of residential property by Mr. Rajat is neither a capital account transaction nor a current account transaction.**

**Determining Mr. Rajat's Residential Status under FEMA at the time of purchase (27th April, 2022):**

Under **Section 2(v) of the Foreign Exchange Management Act, 1999 (FEMA)**, a "Person Resident in India" means a person residing in India for more than 182 days during the course of the preceding financial year, **but does not include** a person who has gone out of India or who stays outside India for the purpose of carrying on a business or vocation outside India (or for any purpose indicating intention to stay outside India for an uncertain period).

Mr. Rajat departed India on **2nd November, 2021** specifically to look after the business of Omx Software Inc. (USA). Although he was physically present in India for approximately 230 days during FY 2021-22, the **exception clause** under Section 2(v) applies because he left for business purposes outside India. Accordingly, Mr. Rajat is treated as a **Person Resident Outside India (PROI)** from the date of his departure, i.e., 2nd November, 2021 onwards (the brief visit in February 2022 does not change his PROI status as it was a temporary return and he left again for the same purpose).

On **27th April, 2022** (date of property purchase), Mr. Rajat was physically outside India attending to overseas business → he remains a **PROI**.

**Classification of the transaction under FEMA:**

**"Ca…

Question 9

Bhavesh, Yash and Chirag incorporated a Limited Liability Partnership for doing the business of trading of timber under the name Solid Lakkad LLP. Chirag has shifted his residence from 12, Block C, Kamla Nagar, Agra to 808, Sector 1, Bodla, Agra on 16th November, 2023. Chirag informed the firm about change of his address on 20th November, 2023 sending a written notice. Now, by which date is Solid Lakkad LLP required to file a notice with the registrar?

Accepted Answer

**Answer: (B)**

Under Rule 47 of the Limited Liability Partnership Rules, 2009, every LLP shall intimate to the Registrar of Companies all changes in the particulars of partners within a period of **fifteen days from the date of receipt of intimation of the change by the limited liability partnership**.

In this case:
- Chirag's change of address occurred on 16th November 2023
- The LLP received intimation of this change on 20th November 2023
- Filing deadline = 20th November 2023 + 15 days = **5th December 2023**

The 15-day period is calculated from the date the LLP actually received notice of the change (20th November), not from the date the change occurred. This is because the firm can only take action after becoming aware of the change.

Question 10

Druk Software Company Inc., a company incorporated in Australia, proposes to establish a place of business at Mumbai. The list of the Directors includes (i) Mr. Arun – Managing Director, (ii) Mr. Ranveer – Director, (iii) Mr. Ramesh Malik - Director and (iv) Mr. Navaaz - Director. Ms. Lavina has been appointed as the Secretary of Druk Software Company Inc. It is to be noted that Mr. Ramesh Malik and Mr. Navaaz, resident in India, are the persons who have been authorised by Druk Software Company Inc. to accept on behalf of the company service of process, notices or other documents required to be served on Druk Software Company Inc. In relation to the company's establishment, you are required to enlighten Druk Software Company Inc. with respect to whose declaration will be required to be sub…

Accepted Answer

**Answer: (A)**

When a foreign company establishes a place of business in India, it must file a declaration with the Registrar of Companies under **Section 380 of the Companies Act, 2013**. The declaration must be submitted within 30 days of establishing the place of business.

**Rule 6 of the Companies (Registration of Foreign Companies) Rules, 2014** specifies that the declaration shall be signed and verified by: (i) all directors of the foreign company, and (ii) the secretary or manager of the company (if any).

In this case:
- **Directors**: Mr. Arun (Managing Director), Mr. Ranveer, Mr. Ramesh Malik, and Mr. Navaaz—all four must give the declaration
- **Secretary**: Ms. Lavina must also give the declaration

The fact that Mr. Ramesh Malik and Mr. Navaaz are authorized to accept service of process is a separate legal requirement and does not restrict the declaration requirement only to them. The declaration is required from all directors (irrespective of their residency status) and the secretary to certify that the company has not been convicted or debarred from formation of companies and complies with the statutory requirements.

Question 11

Ram Pvt. Ltd. is the holding company of Laxman Pvt. Ltd. As per the last profit and loss account for the year ending 31st March, 2023 of Laxman Pvt. Ltd., its turnover was ₹ 1.80 crore; and paid up share capital was ₹ 80 lakh. The Board of Directors wants to avail the status of a small company. The Company Secretary of the company advised the directors that the company cannot be categorized as a small company. In the light of the above facts and in accordance with the provisions of the Companies Act, 2013, you are required to examine whether the contention of Company Secretary is correct, explaining the relevant provisions of the Act.

Accepted Answer

The contention of the Company Secretary is **correct**. Laxman Pvt. Ltd. cannot be categorized as a small company despite meeting the financial thresholds.

**Definition of Small Company under Section 2(85):**
Section 2(85) of the Companies Act, 2013 defines a small company as a company, other than a public company, which satisfies two conditions: (i) paid-up share capital not exceeding ₹50 crore (or higher amount as prescribed, but not exceeding ₹250 crore) as on the date of the balance sheet; and (ii) turnover not exceeding ₹250 crore (or higher amount as prescribed, but not exceeding ₹2000 crore) during the immediately preceding financial year. Importantly, the section contains an explicit exclusion clause stating that a **holding company or a subsidiary company** does not fall within the definition of a small company.

**Application to the Given Facts:**
While Laxman Pvt. Ltd. meets the financial criteria for small company classification—paid-up share capital of ₹80 lakh (well below the ₹50 crore threshold) and turnover of ₹1.80 crore (significantly below the ₹250 crore threshold)—it cannot be classified as a small company because it is a **subsidiary company** of Ram Pvt. Ltd. The exclusion applies based on the corporate status and relationship, not on financial performance or size.

**Legislative Intent:**
The exclusion of holding companies and subsidiary companies reflects the legislative intent that entities forming part of a group structure should be subject to conso…

Question 12

Prakash and some of his friends are members of Focus Limited, a company with a paid-up share capital of ₹ one crore. They all intend to propose a resolution at the forthcoming General Meeting of the company which is going to be held in CP, New Delhi i.e. the place where Registered Office of Focus Limited is situated.

Accepted Answer

**Part (i): Minimum Paid-up Share Capital Requirement**

Under **Section 111(1) of the Companies Act, 2013**, members have the right to requisition for calling a General Meeting or propose a resolution at a General Meeting if they hold:

The **lesser of the following two conditions**:
- **1/10th of paid-up share capital** carrying voting rights, OR
- **100 or more members**

For Focus Limited with paid-up capital of ₹1 crore:
- 1/10th of ₹1 crore = **₹10,00,000 (₹10 lakhs)**

Therefore, Prakash and his friends collectively must hold shares worth at least **₹10,00,000** to initiate a members' resolution. Alternatively, if they number 100 or more members with lesser shareholding, they can still exercise this right if they are fewer in number than 1/10th shareholding criterion.

**Part (ii): Other Requirements for Moving a Members' Resolution**

**1. Requisition Form and Signature Requirements:**
The requisition must be in writing and signed by all requisitionists or a copy signed by them or their duly authorized representatives must be deposited at the Registered Office of the company.

**2. Memorandum with Requisition:**
The requisition must be accompanied by a **memorandum** containing:
- Names and postal addresses of each member making the requisition
- Number of shares held by each requisitionist
- Details establishing their eligibility

**3. Statement of Objects:**
The requisition must clearly state the **objects or purposes** for which the General Meeting is being requisi…

Question 13

PQR Private Limited operates as a manufacturing company, generating a turnover of ₹ 150 crore and holds an outstanding loan of ₹ 75 crore from a public financial institution solely in the previous financial year (with a total loan availed of ₹ 110 crore, but ₹ 35 crore were repaid during the same year). The company's Board has delegated the authority to Chief Executive Officer (CEO) to designate an internal auditor to conduct internal audit. However, the CEO believes that the company is not legally obligated to have an internal auditor. Analyse the accuracy of the CEO's perspective by referring to the provisions outlined in the Companies Act, 2013. What would be your response if the Board of Directors wanted to appoint Mr. Nagendra (an ex-employee who is a qualified Chartered Accountant) a…

Accepted Answer

**Analysis of CEO's Perspective: INACCURATE**

The CEO's belief that PQR Private Limited is not legally obligated to have an internal auditor is **incorrect**. Section 138 of the Companies Act, 2013 mandates the appointment of internal auditor(s) for companies meeting specified thresholds. The company satisfies both criteria for mandatory appointment:

**First Criterion - Turnover:** Section 138(1) applies to every company having turnover exceeding ₹50 crore in any financial year. PQR Private Limited's turnover of ₹150 crore clearly exceeds this threshold.

**Second Criterion - Outstanding Loan:** Section 138(1) also applies to every company having outstanding loan from a public financial institution exceeding ₹25 crore at any point during the financial year. The company has outstanding loan of ₹75 crore from a public financial institution, which exceeds the ₹25 crore limit. (Note: The total loan availed of ₹110 crore with ₹35 crore repaid is irrelevant; what matters is the **outstanding** loan balance of ₹75 crore at any point during the FY).

Since PQR Private Limited meets **both** criteria, appointment of internal auditor is **mandatory and not optional**. The delegation of authority by the Board to the CEO does not absolve the company from this statutory obligation—it merely delegates the administrative function of designation, but the appointment itself remains a statutory requirement.

**Regarding Appointment of Mr. Nagendra:**

While Mr. Nagendra is a qualified Charte…

Question 14

The Governments of Tamil Nadu and Andhra Pradesh collectively hold 60% of the paid-up Equity Share Capital of Orange Limited. The audited financial statements of Orange Limited for the financial year 2022-23 were presented at its Annual General Meeting convened on 17th August, 2023. However, pending the comments of the Comptroller and Auditor General of India (CAG) on the said accounts the meeting was adjourned without adoption of the accounts. Therefore, the company did not file its financial statements with the Registrar of Companies. Afterwards, on receipt of CAG comments on the accounts, the adjourned annual general meeting was held on 20th September, 2023 whereat the accounts were adopted. Thereafter, Orange Limited filed its financial statements relevant to the financial year 2022-23…

Accepted Answer

**Compliance Analysis under Section 137 of the Companies Act, 2013:**

Orange Limited has **COMPLIED** with the statutory requirements regarding filing of financial statements. The applicable provisions and analysis are as follows:

**Applicable Provisions:**

**Section 137** requires that audited financial statements, along with the auditor's report, be filed with the Registrar of Companies within 30 days of their adoption by the company in general meeting.

**First Proviso to Section 137** states that unadopted financial statements shall NOT be filed with the Registrar. This is a mandatory requirement—filing can only be done after formal adoption at the AGM.

**Second Proviso to Section 137** (applicable to Government companies) provides that a Government company may file its financial statements within 30 days of adoption even if comments of the Comptroller and Auditor General of India remain pending. The company need not delay filing awaiting CAG observations.

**Compliance Assessment:**

1. **Non-filing of Unadopted Accounts:** The meeting held on 17th August 2023 was adjourned without adoption due to pending CAG comments. Consequently, Orange Limited appropriately did NOT file the financial statements at that stage. This complies with the first proviso, which prohibits filing of unadopted accounts.

2. **Filing After Adoption:** The adjourned AGM was reconvened on 20th September 2023, and the accounts were formally adopted. Orange Limited subsequently filed the financia…

Question 15

NOP Limited, since its incorporation in 2002, is engaged in the production of premium quality glass bottles. According to financial results of the company as on 31.3.2023 net worth of the company was ₹ 90 crore and turnover for the year 2022-23 was ₹ 510 crore. The company proposed to accept the deposits as on 1st February, 2024, which would be due for repayment on 30th September, 2028 from the public for expansion and redevelopment programs of company. Furthermore, the company has accepted a loan of ₹ 1.5 crore from Mr. P Kishore (Director) and the loan was to be repaid after 24 months. Company in its books of account, records the receipt as a loan under non-current liabilities. At the time of advancing loan, Mr. P Kishore affirms in writing that such amount is not being given out of fund…

Accepted Answer

**Part (i): Eligibility and Tenure of Public Deposits**

**Eligibility Criteria for Acceptance of Public Deposits:**
Under Section 73 and Section 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, a company is eligible to accept deposits from the public only if it satisfies the following criteria:

1. **Operational History:** The company must have worked for at least 3 consecutive financial years.
2. **Profitability:** The company must have earned profits in all the 3 preceding financial years.
3. **Minimum Net Worth:** The net worth at the close of the preceding financial year should not be less than ₹10 crore.
4. **Minimum Turnover:** The turnover during the preceding financial year should not be less than ₹5 crore.
5. **Credit Rating:** The company must obtain a credit rating from any rating agency.

**Eligibility Assessment for NOP Limited:**
Based on the given facts:
- **Operational History:** Incorporated in 2002, hence working for 22 years (well exceeds 3 years) ✓
- **Net Worth:** ₹90 crore as on 31.3.2023 (exceeds ₹10 crore minimum) ✓
- **Turnover:** ₹510 crore for 2022-23 (far exceeds ₹5 crore minimum) ✓
- **Profitability:** While not explicitly stated, the substantial net worth and turnover imply profits in preceding years ✓

**Conclusion on Eligibility:** NOP Limited is **eligible** to accept public deposits, provided it has obtained the required credit rating.

**Tenure for Public Deposits:**
Rule 5 of the Companies (Accept…

Question 16

Fine Publishers, registered in Tokyo, began operating in India during the financial year 2009. The company has duly submitted all necessary documents to the registrar within the specified due date. On 1st March, 2023, Fine Publishers has shifted its principal office in Tokyo. Is Fine Publishers required to undertake any steps due to change in address of principal office? Give your answer in reference to the provisions of the Companies Act, 2013.

Accepted Answer

Yes, Fine Publishers is **required to undertake necessary steps** following the shift in its principal office address.

**Applicable Provision:** Section 380(3) of the Companies Act, 2013 specifically provides that "In case of a foreign company, any alteration in the Memorandum of Association, Articles of Association or any other document affecting the constitution of the company or any change in the particulars relating to the registered office or principal office of the company shall be lodged with the Registrar within thirty days of such alteration or change."

Since Fine Publishers has shifted its principal office in Tokyo, this constitutes a "change in the particulars relating to...principal office" as envisaged in Section 380(3). The change in principal office address triggers the obligation to file with the Registrar regardless of whether the office is located within or outside India.

**Required Steps:** Fine Publishers must lodge the altered or certified copies of documents showing the change in principal office address with the Registrar of Companies within **30 days of the change** (by 30th March 2023 in this case). The documents must be certified and authenticated as per the Companies (Registration of Foreign Companies) Rules, 2014, signed by the authorized representative or duly appointed person, and accompanied by the applicable filing fee.

**Non-Compliance:** Failure to comply with Section 380(3) attracts penalties under Section 397 of the Companies Act, 2013,…

Question 17

Mohit is a creditor of ABC LLP. He has a claim of ₹ 10,00,000 against the LLP. However, the assets of the LLP are valued at only ₹ 7,00,000. Now, Mohit seeks to hold the partners of the LLP personally accountable for the shortfall of ₹ 3,00,000. Under the provisions of the Limited Liability Partnership Act, 2008, can Mohit demand for the deficit from the partners of ABC LLP?

Accepted Answer

**Answer: No, Mohit cannot demand the deficit of ₹3,00,000 from the partners of ABC LLP.**

Under the Limited Liability Partnership Act, 2008, the **limited liability principle** is a fundamental feature that protects partners from personal liability for the debts and obligations of the LLP.

**Legal Framework:**

Section 4(2) of the Limited Liability Partnership Act, 2008 provides that an LLP shall be a body corporate with perpetual succession and a common seal, capable of entering into contracts and holding property in its own name. Importantly, an LLP is treated as a separate legal entity distinct from its partners.

Section 13 of the LLP Act, 2008 explicitly states that a partner is not personally liable for the acts or omissions of other partners unless such partner is directly involved. This provision establishes that personal liability does not automatically extend to all partners for the acts of the LLP or other partners.

Section 14 of the LLP Act, 2008 provides that **the liability of a partner is limited to their contribution to the LLP or any amount they have agreed to contribute**. Once a partner has contributed their agreed amount, their personal assets remain protected and cannot be attached for the debts of the LLP.

**Application to the Given Scenario:**

In the present case, the assets of ABC LLP amount to ₹7,00,000, which can be used to satisfy Mohit's claim up to that extent. However, the shortfall of ₹3,00,000 cannot be recovered from the personal assets …

Question 18

Yogveer Singh has a mango orchard at Manchanga Village, Bilaspur. The orchard has more than one hundred Mango trees. Yogveer Singh has sold the orchard along with all the mango trees. Explain, in the light of provisions of the General Clauses Act, 1897, whether the sale of trees will be considered as sale of Immovable Property?

Accepted Answer

**Yes, the sale of the mango orchard along with the mango trees will be considered a sale of Immovable Property under the General Clauses Act, 1897.**

**Definition of Immovable Property under Section 3(26), General Clauses Act, 1897:**

Section 3(26) defines immovable property to include: (1) Land; (2) Benefits to arise out of land; (3) Things attached to the earth or permanently fastened to anything which is attached to the earth.

**Analysis in the Context of Mango Trees:**

The critical principle is the concept of **attachment to the earth**. Mango trees, being rooted in the soil of the orchard, satisfy the test of attachment. The following factors establish that the trees are immovable property:

**1. Physical Attachment:** The mango trees are firmly rooted in the soil of the orchard and derive their sustenance from the land. This permanent attachment to the earth makes them part of the immovable property.

**2. Integral Part of Land:** Trees growing naturally on land form an integral part of the land itself. They cannot be separated from the land without altering the nature of the property. In horticultural properties like orchards, the trees constitute a significant portion of the immovable property.

**3. Legal Presumption:** When land is sold, all things attached to or forming part of the land pass to the buyer unless specifically excluded. The mango trees, being attached to the earth, are deemed to pass to the buyer as part of the immovable property.

**Important Di…

Question 19

What does the principle of 'reading the statute as a whole' imply in the interpretation of statutes? Explain with the help of an example.

Accepted Answer

The principle of **reading the statute as a whole** is a fundamental canon of statutory interpretation that requires every provision of a statute to be read in conjunction with other relevant provisions rather than in isolation. This principle implies several key concepts:

**Core Implications:**

1. **Contextual Interpretation**: Each section, clause, or provision must be interpreted with reference to the entire statute. No word or phrase can be lifted out of context and given a standalone meaning that contradicts the statute's overall purpose.

2. **Harmonious Construction**: Different provisions that may appear conflicting must be read together to give them a harmonious and consistent meaning. The court should avoid interpretations that create internal contradictions or render any provision otiose (meaningless).

3. **Legislative Intent**: The statute's true meaning emerges from reading all parts together, reflecting the complete legislative intention. No single provision represents the full legislative intent in isolation.

4. **Avoidance of Absurdity**: This principle prevents absurd, illogical, or internally inconsistent interpretations that would result from reading provisions separately.

5. **Hierarchy and Sequence**: Definitions provided early in a statute (e.g., in Section 2) apply to all subsequent sections using those terms. The structure and sequence of provisions carry interpretive significance.

**Illustrative Example:**

Consider a taxation statute with the f…

Question 20

Mr. Shivesh, an Indian National desires to obtain Foreign Exchange for the following purposes. Advise him whether he can get Foreign Exchange and if so, under what conditions?

Accepted Answer

**Part (i): Remittance of US $50,000 from Lottery Winnings**

Remittance is **permissible only if the lottery winnings are from a foreign lottery** (won outside India). If the winnings are from a domestic Indian lottery ticket, remittance **is NOT permitted** as India restricts the remittance of gambling and lottery winnings by law.

**Conditions for remittance (if from foreign lottery):**
- Valid documentary evidence of lottery winnings (foreign lottery ticket, winning certificate, or bank confirmation)
- Proof of tax compliance in India (lottery winnings are taxable income under the Income Tax Act)
- Conversion at the prevailing exchange rate through an Authorized Dealer
- Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines
- Declaration of the source of funds to the Authorized Dealer

**Part (ii): Remittance of US $100,000 for Cultural Troupe Tour to USA**

Remittance **is PERMITTED** under the **Liberalized Remittance Scheme (LRS)** of the RBI. Sponsoring a cultural troupe for a foreign tour falls within current account transactions and is a legitimate remittable purpose.

**Conditions for remittance:**
- Documentary evidence of the cultural tour (tour itinerary, invitation letter, tour operator contract, memorandum of understanding)
- Details of cultural troupe members and their roles
- Detailed breakdown of estimated expenses for the tour
- Proof of authorization to sponsor/organize the tour
- LRS limit compliance: USD 250,000 per financi…

CA Inter Corp Laws

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Worked Solution

Write it like this

1The skeleton

2Examiner-rewarded phrases

3Common trap

Worked Solution

Write it like this

1The skeleton

2Examiner-rewarded phrases

3Common trap