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WorksheetsLaw MCQ SET 1
Total questions: 80
Worksheet time: 2hrs 0mins
Roma along with her six friends has incorporated Roma Trading Ltd. in May 2019. The paid-up share capital of the company is 30 lacs. Further, in April 2020, she noticed that in the last financial year, the turnover of the company was well below 40 crores. Advise whether the company can be treated as a ‘small company’.
Roma Trading Ltd. is definitely a ‘small company’ since its paidup capital is much below 4 crores and also its turnover has not exceeded the threshold limit of 40 crores.
The concept of ‘small company’ is applicable only in case of a private limited company/OPC and therefore, despite meeting the criteria of ‘small company’ it being a public limited company it cannot enjoy benefits of ‘small company’
Unlike a private limited company/OPC which automatically becomes a ‘small company’ as soon as it meets the criteria of ‘small company’, Roma Trading Ltd. being a public limited company has to maintain the norms applicable to a ‘small company’ continuously for two years so that, thereafter, it will be treated as a ‘small company’
If all the shareholders of Roma Trading Ltd. give an undertaking to the ROC stating that they will not let the paid-up share capital and also turnover exceed the limits applicable to a ‘small company’ in the next two years, then it can be treated as a ‘small company’.
Abhilasha and Amrita have incorporated a ‘not for profit’ private limited company which is registered under Section 8 of the Companies Act, 2013. One of their friends has informed them that their company can be categorized as a ‘small company’ because as per the last profit and loss account for the year ending 31st March, 2019, its turnover was less than 40 crores and its paid up share capital was less than 4 crores. Advise.
A section 8 company, which meets the criteria of ‘turnover’ and ‘paid-up share capital’ in the last financial year, can avail the status of ‘small company’ only if it acquires at least 5% stake in another ‘small company’ within the immediately following financial year.
If the acquisition of minimum 5% stake in another ‘small company’ materializes in the second financial year (and not in the immediately following financial year) after meeting the criteria of ‘turnover’ and ‘paid-up share capital’ then with the written permission of concerned ROC, it can acquire the status of ‘small company’
The status of ‘small company’ cannot be bestowed upon a ‘not for profit’ company which is registered under Section 8 of the Companies Act, 2013.
A section 8 company, if incorporated as a private limited company (and not as public limited company) can avail the status of ‘small company’ with the permission of concerned ROC, after it meets the criteria of ‘turnover’ and ‘paid-up share capital’.
Namita Ceramic Goods Limited having 152 members was incorporated with the main objects of manufacture of ceramic goods, glazed, unglazed floor and wall tiles, etc. and to carry on trading in such products. After three years of successful operation, it wants to diversify its business by entering into the field of manufacturing electronic goods for which it is required to alter its objects clause. Advise the company in relation to alteration of Memorandum.
The company can alter its Memorandum of Association by passing an ordinary resolution and obtaining the confirmation of the Regional Director (RD).
The company can alter its Memorandum of Association by passing a special resolution at the shareholders’ meeting.
The company can alter its Memorandum of Association in relation to the objects clause by passing a special resolution at the shareholders’ meeting and obtaining the confirmation of the Regional Director (RD)
The company can alter its Memorandum of Association in relation to the objects clause by passing a special resolution at the shareholders’ meeting and simultaneously publishing the contents of special resolution in two newspapers (one in English and the other one in vernacular language) circulating in that area
Due to the management disputes, Flow Writing Industries Limited could not hold its current Annual General Meeting by the latest due date. Even after lapse of the due date, it seemed rather impossible to convene the AGM. In such a grim situation, one option available was to approach National Company Law Tribunal (NCLT) and seek direction for the calling of AGM. Out of the following four options, which one is applicable in the given case:
Any member of the company can make an application to the National Company Law Tribunal (NCLT) and seek direction for the calling of AGM
A member of the company holding at least 1% of the total paidup share capital must make an application to the National Company Law Tribunal (NCLT) and seek direction for the calling of AGM.
Minimum two members of the company holding at least 1% of the total paid-up share capital must make a joint application to the National Company Law Tribunal (NCLT) and seek direction for the calling of AGM
Minimum five members of the company holding at least 1% of the total paid-up share capital must make a joint application to the National Company Law Tribunal (NCLT) and seek direction for the calling of AGM
Anupam incorporated a ‘One Person Company’ (OPC) with his sister Alpana as the nominee and about three years have passed satisfactorily. Anupam does a number of charitable works and is associated with three NGOs. His business under his OPC has also flourished. Now he is planning to convert the OPC into a Section 8 company (i.e. a company formed with charitable objects). Choose the correct option.
Since the company belongs to Anupam, he has full discretion to convert the OPC either as a Section 8 company or as a private or public company
Since the company was formed as a private company, the only option available with Anupam is to convert it into a public limited company.
There is specific prohibition on converting OPC into a Section 8 company; otherwise it can be converted into a private or public company without any hindrance.
Since Anupam does a lot of charitable works there is no prohibition on converting his OPC into a Section 8 company
An issuing house (share broker) has issued an advertisement in two leading newspapers for selling a large number of shares allotted to it by a company under a private placement. In which of the following conditions will the advertisement NOT be deemed to be a prospectus:
Advertisement was given within six months from the date of allotment
Advertisement was given after six months from the date of allotment and the issuing house has paid the entire consideration to the company
The issuing house did not pay entire consideration to the company till the date of allotment
advertisement was given within three month from the date of allotment
Which of the following statements is not true?
in case of shares, the rate of underwriting commission to be paid shall not exceed five percent of the issue price of the share.
underwriting commission should not be more than the rate specified by the Article of Association.
in case of debentures, the rate of underwriting commission shall not exceed five percent of the issue price of the debentures.
amount of commission may be paid out of profits of the company.
Which of the following statement is contrary to the provisions of the Companies Act, 2013?
A private company can make a private placement of its securities.
The company has to pass a special resolution for private placement.
Minimum offer per person should have Market Value of ` 20,000
A public company can make a private placement of its securities.
A shelf prospectus filed with the ROC shall remain valid for a period of:
one year from the date of registration
one year from the date of closing of first issue
one year from the date of opening of first issue
Ninety days from the date on which a copy was delivered to ROC
Shripad Religious Publishers Limited has received application money of 20,00,000 (2,00,000 equity shares of 10 each) on 10th October, 2019 from the applicants who applied for allotment of shares in response to a private placement offer of securities made by the company to them. Select the latest date by which the company must allot the shares against the application money so received.
9th November, 2019
24h November, 2019
9th December, 2019.
8th January, 2020
Being in need of further capital, Rimsi Cotton-Silk Products Limited offered 50 lacs equity shares of ` 1 each to 50 identified persons on ‘private placement’ basis and accordingly a letter of offer accompanied by application the necessary form was sent to them after fulfillment of due formalities including passing of special resolution. One of the applicants Rajan made a written complaint to the company highlighting the fact that the offer letter was incomplete as well as illegal, as it did not contain ‘renunciation clause’ as he wanted to exercise his ‘right of renunciation’ in favour of his son Uday. By choosing the correct option, advise the company in this matter.
As the ‘Right of Renunciation’ cannot be denied, the company needs to rectify its mistake by including the same in the offer letter and the application form
The company is prohibited from providing ‘Right of Renunciation’ so the offer letter and the application form need not include any such clause.
Instead of absolute prohibition, the company can provide ‘Right of Renunciation’ limited to twenty five percent of offering.
Instead of absolute prohibition, the company can provide ‘Right of Renunciation’ limited to fifty percent of offering.
Innovative Tech Sol Limited intends to invite subscription for 1.10 crores equity shares of 10 each on private placement basis. The persons identified as potential subscribers are within the statutory limit and also include the two other categories to which such statutory limit is not applicable. One such category is employees of the company who are offered equity shares under Employees’ Stock Option Scheme. the other excluded category is:
Quality Institutional Buyers
Qualified Institutional Buyers.
Qualificational Institutional Buyers.
Qualified Investing Institutional Buyers.
Neptune Metal Tools Limited was incorporated on 2nd December, 2018 with twenty-five subscribers and authorised capital of 50,00,000 (5,00,000 equity shares of 10 each). The directors of the company are in a dilemma whether to issue share certificates to the subscribers in physical form or in dematerialized form. Advise them correctly on this matter:
Being an unlisted company, Neptune may either issue physical share certificates to the subscribers or alternatively, issue them in dematerialized form.
Neptune needs to issue shares to the subscribers only in dematerialized form.
A company having more than 100 shareholders needs to issue shares in dematerialized form and therefore, Neptune may issue physical share certificates to the subscribers.
A company having authorised capital of fifty lakhs and above needs to issue shares in dematerialized form and therefore, Neptune may issue physical share certificates to the subscribers.
The amount that an unlisted public company is required to maintain as security deposit, at all times, with the respective depository when it dematerializes its securities shall be
Equal to not less than one year’s fees payable to the depository
Equal to not less than two years’ fees payable to the depository
Equal to not less than two and a half years’ fees payable to the depository
Equal to not less than three years’ fees payable to the depository
Commission is permitted to be paid to any underwriter by the company only in respect of an offer of securities:
where securities are offered on rights basis
where securities are offered in the form of bonus issue
where securities are offered on private placement basis
where securities are offered to the public for subscription
In case of ‘offer of sale of shares by certain members of the company’, which of the following options is applicable:
The provisions relating to minimum subscription are not applicable
Entire minimum subscription amount is required to be received within three days of the opening date
25% of the minimum subscription amount is required to be received on the opening date and the remaining 75% within three days thereafter
50% of the minimum subscription is required to be received by the second day of the opening date and the remaining 50% within next three days after the second day
The time limit within which a copy of the contract for the payment of underwriting commission is required to be delivered to the Registrar is:
Three days before the delivery of the prospectus for registration
At the time of delivery of the prospectus for registration
Three days after the delivery of the prospectus for registration
Five days after the delivery of the prospectus for registration
Shares issued by a company to its directors or employees at a discount or for a consideration other than cash for their providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called are known as:
Equity Shares
Preference Shares
Sweat Equity Shares
Redeemable preference shares
The Articles of Association of a private limited company state that the company may issue preference shares which will have preference with respect to payment of dividend only but no preference as to the repayment of capital, in the case of winding up. Is it possible for the company to issue such preference shares?
No; as per section 43 preference shares should have both preferences
No; this will become an equity share as per section 43
Yes; because as per section 43 preference shares should have any one preference.
Yes; because Articles of Association of the company allow issue of such preference shares and the issuing company is a private limited company.
A general meeting of the company is to be held on 30th August, 2020. The company has not paid dividend in respect of its preference shares for the financial year 2018-19 as well as 2019-20. In such case preference shareholders:
will not have the right to vote because preferential shareholders have no right to vote
will have the right to vote because dividend has not been paid for the last two years
will not have the right to vote because only equity shareholders can vote in general meetings
will have right to vote because preference shareholders have the right to vote in general meetings
Where there is a change in the rights of one class of shareholders of a company that also affects the rights of another class therein, then:
A special resolution should be passed at a general meeting in this regard
The company need not to do anything further
the consent in writing of three-fourths of such other class of shareholders shall also be obtained
A resolution at a joint meeting of both the classes should be passed
Rajesh Infrastructure Limited wants to issue preference shares for a period exceeding 20 years for financing its proposed infrastructure project. On the basis of which statement, company can do so?
Yes, the company can issue irredeemable preference shares by passing a special resolution
Yes, company can issue preference shares for a period exceeding 20 years with the prior approval of Central Government
Yes, the company can issue irredeemable preference shares for infrastructure project
Yes, the company can issue preference shares for financing an infrastructure project for a period exceeding to 20 years
If a company has Authorised Share Capital of 6,00,000, Paid-up Share Capital of 5,00,000 and a loan of ` 2,00,000 obtained from the State Government. The State Government has directed the company to convert its loan into equity shares, then such order shall have the effect of increasing:
The subscribed share capital of the company
The paid-up share capital of the company
The Authorised Share Capital of the company
All of the above
A company bought back 10% of its equity shares in August 2020. Due to certain miscalculations during the first buy-back, it again bought back another 10% equity shares in September 2020. Is second buy-back valid?
It can do so subject to the fulfilment of other conditions because maximum buy-back in a financial year is up to 25%
It cannot do so because there must be a time gap of 12 months between two buy-backs
It can buy back shares within one year but the company should pass an ordinary resolution at a meeting of its board
It can buy back shares within one year but the company will have to pass a special resolution
Swagat Hospitality Limited defaulted in the repayment of last two instalments of term loan availed from National Commercial Bank. On 30th September, 2019, they cleared all the dues by repaying it. When can it issue equity shares with differential voting rights?
Upon expiry of five years from the date on which the default was made good
Upon expiry of three years from the end of the financial Year in which the default was made good
Upon expiry of five years from the end of the financial Year in which the default was made good
Upon expiry of seven years from the end of the financial Year in which the default was made good
Radha, the original allottee of 2000 equity shares in Murti Mechanical Toys Private Limited has transferred the same to Ruchi. The instrument of transfer dated 21st August, 2020, duly stamped and signed by Radha was handed over to Ruchi. Advise Ruchi regarding the latest date by which the instrument of transfer along with share certificates must be delivered to the company, to register the transfer in its register of members.
21st August, 2020
20th September, 2020
20th October, 2020
19th November, 2020
Shreem Lakshmi Jewellery Store Private Limited was incorporated on 27th August, 2020 with 30 persons as subscribers to the Memorandum of Association and with an Authorised share capital of 1 crore divided into equal number of shares off 1 each. Each subscriber subscribed for ` 1.00 lac shares. Advise the company about by what date it needs to deliver the share certificates to the subscribers.
17th September, 2020
30th September, 2020
27th October, 2020
27th November, 2020
Keshika, the original allottee and owner of 1000 equity shares of ` 50 eachin Modern Biscuits Private Limited, wanted to transfer these shares to her younger sister Vanshika by way of gift. She completed the transfer deed in all respects and delivered the same to the company along with the share certificates on 17th July, 2020. However, the company di not register the transfer even after the expiry of more than one month nor did it send any notice of refusal. The lone reminder to the company remained unanswered. An appeal is to be filed against the company with the National Company Law Tribunal (NCLT) against this failure to register transfer of the said shares. Who has the right to file the appeal in this regard?
Keshika, who continues to remain owner and transferor of the said equity shares till they are registered in the name of Vanshika, has the right to file an appeal with NCLT against the company
Vanshika, as transferee and potential owner of equity shares, has the right to file an appeal with NCLT against the company.
Both Keshika and Vanshika have to file a joint appeal with NCLT against the company, for neither Keshika nor Vanshika are authorised to file the appeal individually.
As per its discretion, NCLT may allow either Keshika or Vanshika to file an appeal against the company
Vanita Watches Limited has proposed to issue sweat equity shares to five of its employees for the ‘value additions’ made by them in term of economic benefits which proved beneficial to the company. The period for which the employees who have been allotted the said sweat equity shares cannot transfer them is:
One year from the date of allotment
Three years from the date of allotment
Five years from the date of allotment
Six months from the date of allotment
Prithvi Cements Limited is desirous of issuing debentures carrying voting rights. Choose the right option from the following:
Prithvi Cements Limited can issue debentures carrying voting rights by passing an ordinary resolution at a general meeting of the company
Prithvi Cements Limited can issue debentures carrying voting rights by passing a special resolution at a general meeting of the company.
Prithvi Cements Limited can issue such debentures carrying voting rights only if it mortgages its land and buildings worth two times the amount of the debentures.
Prithvi Cements Limited cannot issue debentures carrying voting rights.
While making an application to the Tribunal for seeking its confirmation in respect of extinguishing the liability of ` 3 per equity share, Medhavi Publishers Limited has to file a certificate along with the application, that the accounting treatment proposed by it for such reduction of share capital is in conformity with the accounting standards specified in the prescribed Section. Advise the company as to who can issue such certificate?
Any of the directors of the company as authorised by the Board may issue such certificate
A practicing company secretary is authorised to issue such certificate
The auditor of the company is authorised to issue such certificate
The legal advisor of the company is authorised to issue such certificate
A reserve account that shall not be used by the company for any purpose other than repayment of deposits is called:
Debenture redemption reserve account
Deposit repayment reserve account
Capital redemption reserve account
Free reserve account
Normally no deposits are repayable earlier than ______ from the date of such deposits or renewal thereof.
3 months
6 months
12 months
1 year
Bhumi Real Estate Developers Limited has accepted deposits from its members. There is no default in repayment of such deposits on their maturity. The statutory amount to be deposited by the company on or before 30th April of each year in a specified account opened with its bankers, till the deposits are fully repaid is:
Not less than 50% of the amount of its deposits maturing during the following financial year.
Not less than 30% of the amount of its deposits maturing during the following financial year
Not less than 20% of the amount of its deposits maturing during the following financial year.
Not less than 10% of the amount of its deposits maturing during the following financial year.
A Limited Company is accepting deposits of various tenures from its members from time to time. The current Register of Deposits, maintained at its registered office is complete. State the mandatory minimum period for which it should be preserved in good order.
Four years from the financial year in which the latest entry is made in the Register.
Six years from the financial year in which the latest entry is made in the Register.
Eight years from the financial year in which the latest entry is made in the Register.
Ten years from the latest date of entry
Dream World Entertainment Limited, has accepted deposits worth ` 50.00 lacs from public on 1st April 2019 for a period of 24 months i.e. repayment of deposit would be made on 31st March 2021. The rate of interest payable on such deposits is 9% p.a. One of the depositors Mr. Aman requested the company on 1st June 2020 for premature repayment of his deposit of ` 6.00 lacs along with interest. Advise the company in the said matter.
The company can make premature repayment of deposits only with an intention to reduce the total amount of deposits to bring it within permissible limits. Hence, in the given case, the company cannot repay the deposit before the actual maturity.
The company can prematurely repay the deposit along with interest @9% p.a. for the period of 12 months (from 1st April 2019 to 31st March 2020).
The company can prematurely repay the deposit along with interest @8% p.a. for the period of 12 months (from 1st April 2019 to 31st March 2020).
The company can prematurely repay the deposit along with interest @8% p.a. for the period of 14 months (from 1st April 2019 to 31st May 2020).
Suneet Spices Limited decides to raise deposits of 20.00 lacs from its members. However, it proposes to secure such deposits partially by offering a security worth 15.00 lacs. Which of the following options best describe such deposits:
Fully secured deposits (except a small portion)
Unsecured deposits
Partially secured deposits
These cannot be classified as deposits
What is the maximum tenure for which a company can accept or renew deposits from its members as well as public?
12 months
24 months
36 months
48 months
Ruchita wants to renew her deposit of ` 5.00 lakh with Kewal Constructions Limited before the expiry of original period for availing higher rate of interest. The fresh period, for which Ruchita is required to renew her deposit to be eligible for the higher rate shall be
One and a half times the unexpired period of original deposit.
Double the unexpired period of original deposit.
Six months more in addition to the unexpired period of deposit.
Longer than the unexpired period of deposit.
Any person acquiring property, on which charge is registered under section 77, shall be deemed to have notice of the charge from:
the expiry of thirty days of such charge
the date of application for registration of the charge
the date of acquiring the property
the date of such registration
An interest or lien created on the property or assets of a company or any of its undertakings or both as security is known as:
Debt
Charge
Liability
Hypothecation
A charge was created by Cygnus Softwares Limited on its office premises to secure a term loan of ` 1.00 crore availed from Next Gen Commercial Bank Limited through an instrument of charge executed by both the parties on 16th February, 2019. Inadvertently, the company could not get the charge registered with the concerned Registrar of Companies (ROC) within the first statutory period permitted by law and the default was made known to it by the lending banker with a stern warning to take immediate steps for rectification. The latest date within which the company must register the charge with the ROC so as to avoid paying ad valorem fees for registration of the charge is
27th April, 2019
17th April, 2019
2nd May, 2019
16th June 2019
Which one of the following transactions requires the passing of an ordinary resolution?
To change the name of the company
To alter the articles of association
To reduce the share capital
To declare dividends
A resolution shall be a special resolution when the votes cast in favour of the resolution by members are not less than ______________the number of votes, if any, cast against the resolution.
Twice
Three times
Three fourth of
Two third of
Every listed company shall file with the Registrar a copy of the report on each annual general meeting within ______ of the conclusion of the annual general meeting.
7 days
30 days
60 days
90 days
The AGM shall be called by giving 21 clear days’ notice. However, it can be called by giving shorter notice if members entitled to vote at that meeting give their consent in writing or by electronic mode. In such cases how many members have to give their consent?
75% of members entitled
90% of members entitled
91% of members entitled
95% of members entitled
Dividend once declared, should be paid within_____________ days from the date of declaration
14 days
21 days
30 days
45 days
Which of the following amount need not be credited to Investor Education and Protection Fund Account (IEPF)?
Amount in unpaid dividend account (UDA) of company
Amount of matured deposits with the company
Profit on sale of asset
Amount of matured debentures with the company.
Amount to be transferred to reserves out of profits before any declaration of dividend is ___________
5%
7.5%
10%
at the discretion of the company
The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is 50.00 lacs divided into 5,00,000 equity shares of 10 each. At its Annual General Meeting (AGM) held on 24th September, 2019, the company declared a dividend of ` 2 per share by passing an ordinary resolution. Mention the latest date by which the amount of dividend must be deposited in a separate account maintained with a scheduled bank
Latest by 29th September, 2019
Latest by 4th October, 2019
Latest by 9th October, 2019
Latest by 24th October, 2019
The Directors of Silver tongue Solutions Limited proposed dividend at 18% on equity shares for the financial year 2018-2019. The same was approved at the Annual general body meeting held on 30th September 2019. Mr. Jagan was the holder of 2000 equity of shares on 31st March, 2019, but he transferred the shares to Mr. Rajiv on 8th August 2019. Mr. Rajiv has sent the shares together with the instrument of transfer to the company for registration of the shares in his favour only on 25th September 2019. The registration of the transfer of shares is pending on 30th September 2019. With respect to the dividend declared the correct action to be taken by the company is:
vPay the dividend to Mr. Jagan
Pay the dividend to Mr. Rajiv
Transfer the dividend in relation to such shares to the Unpaid Dividend Account
Transfer the dividend in relation to such shares to the Investor Education and Protection Fund.
The Board of Directors of Jip Rise Pharmaceuticals Limited wish to declare interim dividend in the last week of July, 2018. The company has incurred a loss during the current financial year up to the end of June, 2018. However, it is noted that during the previous five financial years i.e., 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18, the company had declared dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current financial year.
10%
11%
10.5%
11.5%
CSR Committee of the Board of shall consist of:
Directors forming 1/3rd of the total no of directors.
At least 2 directors out of which one shall be independent director.
3 or more directors out of which one shall be managing director
3 or more directors, out of which at least 1 director shall be an independent director.
Provisions of CSR are applicable to:
Companies with net worth of ` 250 crore or more but less than 500 crore.
Companies with turnover of ` 1000 crore or more.
Companies with net profit of 1 crore or more but less than 5 crore in any financial year
Companies having aggregate outstanding loans and deposits exceeding ` 50 crore or more in any financial year.
One Person Company shall file a copy of the duly adopted financial statements to the Registrar within:
30 days of the date of meeting at which it was adopted.
90 days of the date of meeting at which it was adopted.
90 days from the closure of the financial year.
180 days from the closure of the financial year.
Rema formed and occupied the office of director in Rem Stationers (OPC) Private Limited which deals in manufacturing and trading of various items of stationery. Rema noticed a changed provision which mandates that from the Financial Year 2020-21 onwards, an OPC shall file its Annual Return in MGT - 7A. Rema is also one of the directors in another company which too is required to file its Annual Return in MGT - 7A. Which is that ‘other company’ where Rema also occupies the office of director in addition to OPC
That other company is a ‘small company’ where Rema also occupies the office of director in addition to OPC.
That other company is an ‘associate company’ where Rema also occupies the office of director in addition to OPC.
That other company is a ‘subsidiary company’ where Rema also occupies the office of director in addition to OPC.
That other company is a ‘dormant company’ where Rema also occupies the office of director in addition to OPC.
Ayush Power Limited has reported a net profit of 6 crore, 7.5 crore and ` 3 crore for the financial year(s) ended on March 2017, March 2018 and March 2019 respectively. The board’s report of the company for the year ended March 2020 did not disclose the composition of the CSR Committee on the grounds that company is not required to constitute CSR committee as net profit during the immediately preceding financial year is less than the statutory requirements laid down in section 135. You are required to examine in the given scenario whether the act of non-composition and non- disclosure of the composition of CSR committee in the Board’s Report is valid in law?
No, the act of the company is not valid in law as every company is required to constitute a CSR committee and disclose the constitution of same in the board’s report in every financial year irrespective of the profits earned by the company.
Yes, the act of the company is valid in law as the net profit of the company is less than ` 5 crore in the immediately preceding financial year.
No, the act of the company is not valid in law as composition and disclosure of composition of CSR Committee will be required only if the profits of the company are not less than ` 5 crore for a consecutive period of 3 financial years.
The act of the company is valid only to the extent of nondisclosure of the composition of CSR committee as the net profit of the company is less than ` 5 crore in the immediately preceding financial year.
During the half year ended September 2019, the board of directors (BOD) of Vidyut Manufacturing Limited has made an application to the Tribunal for revision in the accounts of the company for the financial year ended as on March 2017. Further during the year ended March 2020, the BOD has again made an application to the Tribunal for revision in the board’s report pertaining to the year ended March 2019. You are required to state the validity of the acts of the Board of directors.
The act of the BOD is valid only to the extent of application made for revisions in accounts as board’s report are not eligible for revision
The act of the BOD is valid as the applications made for revision in the accounts and board’s report pertain to two different financial years
The act of the BOD is invalid as the law provides for only one time application to be made in a financial year for revision of accounts and boards report
The act of the BOD is invalid as the application made for revision in accounts pertains to a period beyond 2 years immediately preceding the year 2020. The application made for revision in the Board report is however valid in law.
Adani Enterprises Limited has its shares listed on a recognized stock exchange in India. During the current financial year ending on 31st March 2020, the securities and exchange board of India (SEBI) has found some irregularities in the filings made by the company. Accordingly, SEBI proposes to make an application to the Tribunal for reopening of the books of accounts of the Company. You, as an expert, are called upon by SEBI to advise with which last financial year for reopening of books of accounts an application can be made?
2015-2016
2013-2014
2010-2011
2011-2012
Ganesh Company Ltd, a public company incorporated under the Companies Act, 2013 has Mr. Jay- Director, Mr. Sagar – Independent Director, Mr. Abhishek – Nominee Director and Mr. Yash – Whole time director. Mr. Abhishek wants to inspect the books of account of Shankar Company Limited, the subsidiary of Ganesh Company Limited. You are required to state whether Mr. Abhishek is eligible to inspect the books of accounts of Ganesh Company Limited?
Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only on authorization of the public financial institution on whose behalf he has been so appointed in the board of the Ganesh Company Ltd.
No. Mr. Abhishek being a nominee director can only inspect the books of account of Ganesh Company Ltd and not its subsidiary company.
Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only on authorization by way of resolution of the board of directors.
Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only on authorization by way of resolution of the members holding not less than 25% of the paid up share capital of the company.
For appointing an auditor other than the retiring auditor,
Special notice is required
Ordinary notice is required
Neither ordinary nor special notice is required
Approval of Central Government is required
The auditor of a Government Company shall be appointed or reappointed by-
The Central Government
Comptroller and Auditor General of India (CAG).
Central Government on the advice of Comptroller and Auditor General of India.
Chairman of the Board of Directors
Which of the following is a service prohibited to be rendered by the auditor of the Company?
Design and implementation of any financial information system
Making report to the members of the company on the accounts examined by him
Compliance with the auditing standards
Reporting of fraud against the company by officers or employees to the Central Government
The word ‘firm’ for the purpose of Section 139 shall include-
An individual auditor
LLP
Both an individual auditor and LLP
A company
In view of the fact that a private company enjoys a number of privileges, Orange Pharma Limited having 20 members is proposing to convert itself into a private company. For this purpose, the company needs to alter its articles by inserting three restrictive clauses as specified in Section 2(68) and the consequent change in the name of the company requires:
A special resolution and prior approval of the Central Government.
A special resolution prior approval of the National Company Law Tribunal (NCLT).
A special resolution and prior approval of the Registrar of Companies (ROC).
A special resolution and prior approval of the State Government
A contracts to save B against the consequences of any proceedings, which C may take against B in respect of a certain sum of 500 rupees. This is a:
Contract of guarantee
Quasi contract
Contract of indemnity
Void contract
S and P go into a shop. S says to the shopkeeper, C, “Let P have the goods, and if he does not pay you, I will.” This is a
Contract of Guarantee
Contract of Indemnity
Wagering agreement
Quasi-contract
A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person is called a :
Surety contract
Simple contract
Contract of indemnity
Contract of guarantee
Any guarantee obtained by means of misrepresentation made by the creditor or with his knowledge and assent concerning a material part of the transaction is
Valid
Invalid
voidable at the option of the surety
void
Mr. Sharad has recently shifted from Delhi to Noida. During the shifting some of the furniture was damaged. Mr. Sharad gave the items to Asian Arts, Greater Noida for repair, refabrication, and painting, etc. Asian Arts deals in the sale of furniture and repair thereof. It was decided that the whole work will be done on a lumpsum amount of ` 50,000. In between this period, the workshop at Asian Arts caught fire and there was no fault of the proprietors. Goods bailed by Mr. Sharad along with another furniture destroyed in this fire incident. Mr. Sharad has lost furniture due to fire at workshop of Asian Arts. What is the correct statement considering there was no specific contract?
Asian Arts is liable, because fire took place at his place
Asian Arts is liable, because bailment is on going
Asian Arts is not liable because risk of any loss during bailment is to be borne by bailor.
Asian Arts is not liable because fire is not due to any negligence of their part.
Atul contracts to indemnify Neha against the consequences of any proceedings which Chirag may take against Neha in respect of a sum of ` 15000/- advanced by Chirag to Neha. Neha who is called upon to pay the sum of money due to Chirag fails to do so. Advise Chirag on the course of action to be taken as per the provisions of the Indian Contract Act, 1872.
Chirag can file a suit only against Neha
Chirag can file a suit only against Atul
Chirag can file a suit against both Neha and Atul
Chirag can file a suit only against Atul but not against Neha
The position of a finder of lost goods is that of a
Bailor
Bailee
Surety
Principal debtor
The delivery of goods by one person to another for some specific purpose is known as:
Mortgage
Pledge
Bailment
Charge
With respect to Contract of Bailment, which of the following statement is incorrect:
No consideration is necessary to create a valid contract of bailment.
It involves the delivery of goods from one person to another for a specific purpose.
Bailment is only for immovable goods and never for moveable goods
Change of possession in bailment does not lead to change of ownership.
Vishal parks his car at a parking lot, locks it, and keeps the keys with himself. Which of the following statements is correct in this regard?
This is a case of bailment
The operator of the parking lot has possession of Vishal’s car
The operator of the parking lot has custody of Vishal’s car
This is a case of mortgage
The Pawnee doesn’t have the right to retain the goods pledged for
Performance of the promise
Extraordinary expenses incurred by him for preservation of goods pledged
Payment of debt
Necessary expenses incurred by him in respect of possession of goods pledged
A hires a carriage from B. The carriage is unsafe though B is not aware of it and A is injured. Choose the correct answer as per the provisions of the Indian Contract Act, 1872.
B is responsible to A for the injury
B is not responsible to A for the injury
Neither is responsible to the other
A himself is responsible for his injury
______________ is one who represents to be an agent of another when in reality he has no such authority from the other agent at all.
Substituted agent
Subordinate agent
Pretended agent
Both (a) & (b)
L made an offer to the Managing Director of a company. The Managing Director accepted the offer though he had no authority to do so. Subsequently L withdrew the offer but the company had already ratified the Managing Director’s acceptance. State which of the statements given below is correct:
L is bound by the offer due to ratification
An offer once accepted cannot be withdrawn
Both option (a) & (b) is correct
L is not bound by the offer
A is residing in Delhi and has a house in Mumbai. A appoints B by a power of attorney to take care of his house. State the nature of agency created between A and B:
Implied agency
Agency by ratification
Agency by necessity
Express agency
