a)

(Inter) Test 3 - Corporate & Other Laws

Total no. of questions: 6 Total no. of printed pages: 9
Time allowed: 3 hours 15.12.2024 Maximum marks: 70
In Part II, Question no. 1 is compulsory.
Answer any 4 out of remaining 5 questions.
Questions first answered will be valued and subsequent extra questions will be ignored.
Wherever necessary, suitable assumptions may be made and shall be disclosed clearly.
Exam tips -
1. Format for writing case law based questions -
- Facts of the case
- Provisions of law
- Conclusion
2. Start with main point. Write to the point answers.
3. Give headings to points and underline it.
4. Write section numbers only if you are confident. Don’t quote wrong section numbers.
5. Good handwriting is expected.
-x-x-x-x-

Part II - Descriptive Questions

1. (a) XYZ Tech Solutions Limited is a growing technology company that has seen significant (5)
contributions from its employees and directors in the development of a ground breaking
software product. To reward these key contributors, the board proposed issuing sweat equity
shares to certain employees and directors. XYZ Tech Solutions Limited already has issued ordinary
equity shares but has never issued sweat equity shares before.
The company has a paid up equity share capital 20 crore. The company has proposed to issue
sweat equity shares worth 4 crore of face value. The company’s board has drafted a special
resolution outlining the proposed issuance of sweat equity shares and including specific details,
such as the number of shares, the current market price, consideration (if any), and the classes of
directors and employees eligible to receive the shares.
The company has approached you to advise them about the issue of the said sweat equity
shares, in line with the provisions of the Companies Act, 2013.

1. (b) Shikhar Cement Limited passed two resolutions by means of postal ballot. Keeping in view the (5)
relevant provisions of the Companies Act, 2013, you are required to advise the directors of the
company regarding the provisions applicable for making entries in the minutes book including the
time limit within which the entries must be made.

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1. (c) Mr. L was employed as a fashion designer in Elegant Textile Ltd., a public limited company in (4)
Gurugram, India during the financial year 2023 -24. He had efficiently provided his services for 183
days during the above said period. On 01.04.2024, Mr. H. the Human Resource Manager of Jeff
Fashion Ltd., Paris (a foreign country) offered him a better employment opportunity in such
company.
On 02.04.2024, Mr. L. left India for taking up employment as a production controller at Jeff Fashion
Ltd. in Paris. On 30.04.2024 he flew back to India for a 10 day family function in Manali, India.
In light of the provisions of the Foreign Exchange Management Act, 1999 , elucidate: The residential
status of Mr. L-
(i) On his return for attending the family function on 30.04.2024.
(ii) In case, instead of vacation, he joins an employment in an Indian company after
arriving on 30.04.2024.

2. (a) The Government of India is holding 51% of the paid-up equity share capital of Sun Ltd. The (5)
Audited financial statements of Sun Ltd. for the financial year 2021-22 were placed at its annual
general meeting held on 31st August 2022. 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. On receipt of CAG comments on the accounts, the adjourned annual
general meeting was held on 15th October, 2022 whereat the accounts were adopted. Thereafter,
Sun Ltd. filed its financial statements relevant to the financial year 2021-22 with the Registrar of
Companies on 12th November, 2022. Examine, with reference to the applicable provisions of the
Companies Act, 2013, whether Sun Ltd. has complied with the statutory requirement regarding
filing of accounts with the Registrar?

2. (b) State, with reasons, whether the following statements are ‘True or False’. (5)
(i) ABC Private Limited may accept deposits from its members to the extent of 50 lakh, if the
aggregate of its paid-up capital, free reserves and security premium account is 50 lakh.
(ii) A Government Company, which is eligible to accept deposits under Section 76 of the
Companies Act, 2013, cannot accept deposits from public exceeding 25% of the aggregate of
its paid-up capital, free reserves and security premium account.

2. (c) State the provisions regarding following with respect to General Clauses Act, 1897. (4)
i. Commencement and termination of time
ii. Computation of time

3. (a) “ABC & Co.” is an audit firm having partners “Mr. A”, “Mr. B” and “Mr. C”, Chartered Accountants. (5)
“Mr. A”, “Mr. B” and “Mr. C” are holding appointment as auditors in 4, 6 and 10 companies
respectively.
i. Provide the maximum number of audits remaining in the name of “ABC & Co.”
ii. Provide the maximum number of audits remaining in the name of individual partner i.e.
Mr. A, Mr. B and Mr. C.

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3. (b) Nivedita Limited hypothecated its plant to a Nationalized Bank and availed a term loan. The (5)
Company registered the charge with the Registrar of Companies. The Company settled the
term loan in full. The Company requested the Bank to issue a letter confirming the settlement
of the term loan. The Bank did not respond to the request. State the relevant provisions of
the Companies Act, 2013, to register the satisfaction of charge in the above circumstance.
State the time frame upto which the Registrar of Companies may allow the Company to
intimate satisfaction of charges.

3. (c) Explain in reference to Interpretation of Statutes, the cases where Rule of Ejusdem Generis (4)
will not apply.

4. (a) Shipra Sugar Mills Limited has been regularly declaring dividend at the rate of 20% on its equity (5)
shares for the past 3 years. However, the company has not made adequate profits during the
current year ending on 31st March, 2020, but it has got adequate free reserves which can be
utilized for maintaining the rate of dividend at 20%.
Advise the company as to how it should proceed in the matter if it wants to declare dividend
at the rate of 20% for the year 2019-20, as per the provisions of the Companies Act, 2013.

4. (b) M/s Strong Steels Limited Liability Partnership firm was incorporated on 01st April 2010 with (5)
ten partners. The LLP had very good business and made considerable profits during the past years.
Recently due to obsolete practices, M/s Strong Steels Limited LLP started making loss. Also, M/s
Strong Steels LLP did not file its annual returns from 2020-21. Three partners decided that the LLP
be wound up by the Tribunal. The remaining partners objected to it. Referring to section 64 of the
Limited Liability Partnership Act, 2008, can the Tribunal pass an order to wound up M/s Strong
Steels LLP? Also state the provisions and penalty for not filling annual return with the Registrar.

4. (c) Explain the term "Generalia specialibus non derogant" in connection with interpretation of (4)
statues.

5. (a) (5)
i. Mr. Abhinav, a member of Elixir Logistics Limited, filed a complaint against the company for not
serving him a notice for attending the Annual General Meeting. The company, in turn,
provided the proof that they had sent the notice, by way of an email to Mr. Abhinav, inviting
him to attend the annual general meeting of the company. Mr. Abhinav alleges that he never
received the email. State whether the company is liable to be guilty for contravening the
provisions of section 101 of the Companies Act, 2013 read with the applicable Rules.

ii. The paid-up share capital of Aakash Soaps Limited is Rs. fifty lakh divided into five lakh shares of
10 each. The directors of the company are desirous of calling an extra-ordinary general meeting
(EGM) by giving a shorter notice which is less than 21 days. Sixty percent of the members holding
shares worth Rs. forty lakh accorded their consent by electronic mode to the shorter notice.
Whether EGM can be validly called?

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5. (b)
1. Examine the validity of the following statement with reference to the provisions of the (3)
Companies Act, 2013.
The Articles of Association of X Limited contained a provision that the underwriting commission
may be paid up to 4% of the issue price of the shares. However, the Board of Directors have
decided to pay the underwriting commission of 5% to Deal & Co., the underwriters."

2. What do you mean by "Key Managerial Person" in relation to a company? (2)

5. (c) X owned a land with fifty tamarind trees. He sold his land and the timber (obtained after (4)
cutting the fifty trees) to Y. X wants to know whether the sale of timber tantamount to sale of
immovable property. Advise him with reference to provisions of the General Clauses Act, 1897.

6. (a) State the difference between LLP and Limited Liability Company. (5)

OR

6. (a) Explain how the auditor will be appointed in the following cases:
(i) A Government company within the meaning of section 394 of the Companies Act, 2013.
(ii) A public company whose shareholders include XYZ Bank (a nationalized bank) holding
18% of the subscribed capital of the company.

6. (b)
1. XY Ltd. has its registered office at Mumbai in the State of Maharashtra. For better administrative (3)
conveniences the company wants to shift its registered office from Mumbai to Pune (within the
State of Maharashtra, but from Mumbai ROC to Pune ROC). What formalities the company has to
comply with under the provisions of the Companies Act, 2013 for shifting its registered office as
stated above? Explain.

2. Search & Find Pte. Ltd., incorporated in Singapore. The Company sells its goods through (2)
electronic mode on the e-commerce platforms in India, however, it does not have any branch or
office in India. Is the Company required to submit the documents as required under Section 380 of
the Companies Act, 2013.

6. (c) Mr. Sane, an Indian National desires to obtain Foreign Exchange for the following purposes: (4)
(i) Remittance of US Dollar 50,000 out of winnings on a lottery ticket.
(ii) US Dollar 100,000 for sending a cultural troupe on a tour of U.S.A.

Advise him whether he can get Foreign Exchange and if so, under what conditions?

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