Q1(a)Conversion of public company to private company - Companies
15 marks very hard
MNP Limited is a registered public company having the following members: Promoter: 15, Employees: (blank), Public: 15, Members holding shares purely[?]: 12, Other Members: 13. The Board of Directors of MNP Limited proposes to convert the company into a private limited company. Referring to the provisions of the Companies Act, 2013, advise:
i) Whether the company can be converted into a private company?
ii) Whether certain number of members need to be reduced before proposing the private company?
Q1(b)(i)Corporate Social Responsibility (CSR) - Companies Act 2013
3 marks medium
SKIP Limited (the Company) was incorporated on 01.04.2019. The balances extracted from its audited financial statement are as given below:
Financial Year (FY) | Net Profit before tax | Net Profit after tax (figure Income Tax computation)
2019-20 | ₹ 3.60 crore | ₹ 3.75 crore
2020-21 | ₹ 7.60 crore | ₹ 5.25 crore
The Company proposes to allocate the minimum required amount for CSR Activities to be undertaken during FY 2021-22, if it is mandatory. You are requested to advise the Company in this regard and compute the minimum amount to be allocated, if so required, taking into account the relevant provisions of the Companies Act, 2013.
Q1(b)(iii)Redeemable Preference Shares - Companies Act 2013
3 marks medium
SKS Limited issued 8%: 1,50,000 Redeemable Preference Shares of ₹ 100 each in the month of May, 2010, to be redeemed within a period of 10 years. Due to the Covid-19 pandemic, the Company is neither in a position to redeem nor pay the stated terms of issue. The Company with the consent of Redeemable Preference Shareholders of 70% in value, made a petition to the Tribunal (NCLT) to accord approval to issue further redeemable preference shares equal to the amount due. Will the petition be maintainable in the light of the provisions of the Companies Act, 2013? Can the company include the dividend unpaid in the balance sheet regarding the amount due to redeem redeemable preference shares?
Q1(c)(i)Agency - Ratification and Authority
3 marks hard
Ramit has given authority to Prem to buy certain goods at market rate. Prem buys the goods at a higher rate than the market rate. Afterwards, Ramit comes to know that the goods purchased belonged to Prem himself. Decide, whether, Ramit is bound by ratification does?
Q1(c)(ii)Agency - Sub-delegation, Indian Contract Act 1872
3 marks hard
Hari authorises Bharal, a merchant in Mumbai, to recover debt from Bankley & Co. Bharat instructs Deepak, a solicitor, to take legal proceedings against Bankley & Co. for recovery of the money. Explain the legal position of Deepak, referring to provisions of the Indian Contract Act, 1872, related to agency.
Q1(d)Negotiable Instruments Act 1881
3 marks medium
Examine the validity of the following statements with reference to the Negotiable Instruments Act, 1881:
(i) When payment on an instrument is made in the course, both the instrument and the parties to it are discharged.
(ii) Alteration of rate of interest specified in the Promissory Note is not a material alteration.
(iii) Conversion of the blank indorsement into an indorsement to bearer is not a material alteration and it does not require authorisation.
Q5Company Act disclosure provisions
5 marks medium
HD Software Private Limited is engaged in the business of providing software services. The company received an advance payment later via signed with a clause that the fee in be initially agreed. However, the company was not finalized. Explain all relevant disclosure provisions of the Company Act, 2013.
Q6Statutory audit provisions
3 marks medium
Chartered Accountants are statutory auditors of the firm has a period of 5 years in Bangalore manner and carried by fixed to two.
Q7Bailment and warehousing
4 marks hard
Mr. Trish deposited 100 bags of groundnut in the factory of Mr. Paise for safe keeping. M. Paise has kept all the other goods bags in the factory with the consent of Mr. Trish and has stored inside in the warehouse.
Q8Indian Contract Act provisions
3 marks medium
What will be the consequences in case the ground-nut bag were not delivered under the provisions of the Indian Contract Act, 1872? Explain the provisions which Mr. Trish under the above said Act ?
Q9Statutory interpretation
3 marks medium
What is the effect of proviso 7 Does it qualify the main provisions of the enactment? Explain it with reference to Interpretation of Statutes.