CA Inter Law Test Marathon – Test 3

CORPORATE AND OTHER LAWS

CA Intermediate Test Series – July 2020

Chapter 7 – Management & Administration

Chapter 8 – Declaration of Dividend

1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Multiple Choice Questions (MCQs).
3. There is no requirement to give any reasoning for MCQs.
4. Part II comprises questions which require descriptive type answers.
5. Duration of the examination is 1 hour.
______________________________________________________________________________________

PART – I
(10 MCQs x 1 marks each = 10 marks)

Q1: Swiss Commodities Private Limited was incorporated in 2015. Company was not running its business properly due to
unexpected ups and downs. It could not hold its first annual general meeting in the year 2016. The company is planning
to apply for extension of time for holding the AGM from the Registrar of Companies. On which grounds Company can
get an extension?
(a) They will not get any extension.
(b) It Company proves that their financial statements are confiscated.
(c) If they prove that directors have fell below numbers.
(d) If they prove that members are not available.

Q2: The Board of Directors of Gama Ltd. did not call the Extra Ordinary General meeting within 21 days from the date of
receipt of requisition from members, then the requisitionists may themselves call a meeting within a period of …….. from
the date of requisition.
(a) 15 days
(b) 30 days
(c) 1 month
(d) 3 months

Q3: Soya Limited was incorporated in 2014 and has its registered office in Noida. Company wants to call its 4th Annual
General Meeting in Mumbai. Whether it is possible?
(a) It is not possible as Annual General Meeting has to be held in Noida;
(b) It is possible with consent of 50% members is received;
(c) It is possible if consent of 75% members is received;
(d) It is possible if consent of 100% members is received;

Q4: Mr. N is a Company Secretary of Mayo Private Limited. For calling Company’s Annual General meeting, Mr. N has to
issue notice of that meeting before stipulated period of time. Draft notice is ready with him. However, he is confused on
agenda items for which he has to attach explanatory statement to the notice. Please help him to understand which agenda
item needs explanatory Statement?
(a) Consideration of Auditors Report
(b) Fixing remuneration of Auditor
(c) Fixing remuneration of Manager
(d) Declaration of any dividend

Q5: Wide Infra Limited is a Company with 1350 members. Extra General Meeting of Wide Infra Limited was scheduled on
15th November, 2018 at 11 am. On the day of meeting, 3 members were present at 10.45 am. What number of members is
required to fulfil quorum requirement?
(a) Additional 4 members before 11.30 am
(b) Additional 4 members before 11.15 am

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 CA Inter Law Test Marathon – Test 3
(c) Additional 12 members before 11.30 am
(d) Additional 12 members before 11.15 am

Q6: ABC Infrastructures Limited is a listed company quoted at National Stock Exchange. The company closed its Register of
Members in June and August, 2017 for 12 and 21 days respectively. The CFO of company has informed the company
secretary to consider closing of register in December for another 15 days for some strategic reasons. Referring to the
provisions of Companies Act, 2013, examine the validity of above action of the company.
(a) Valid, as the closure of register of members by company each time is not exceeding 30 days.
(b) Invalid, as company cannot go for closure of Register of members more than twice in a year.
(c) Invalid, as the period of closing register of members exceeding 30 days in a year.
(d) Invalid, as the period of closing the Register of members by the company is exceeding 45 days in a year.

Q7: In the current financial year Zunee Traders Limited, a non-listed company, has 556 members, increased from 451
members which it had in the immediate previous financial year. For the forthcoming Annual General Meeting (AGM),
advise the company whether it is required to provide to its members the facility to exercise their right to vote at this AGM
by electronic means.
(a) Since the company has more than 500 members it is required to provide to its members the facility to exercise their right
to vote at the forthcoming AGM by electronic means.
(b) The company is not required to provide to its members the facility to exercise their right to vote at the forthcoming AGM
by electronic means since its members are less than one thousand.
(c) Though the company is required to provide to its members the facility to exercise their right to vote at the forthcoming
AGM by electronic means because it has more than 500 members, it can, as a one-time measure, seek exemption from
ROC beforehand and in that case, it need not provide facility of voting by electronic means.
(d) Only a listed company is required to provide to its members the facility to exercise their right to vote at the General
Meetings by electronic means.

Q8: Amount to be transferred to reserves out of profits before any declaration of dividend is ___________
(a) 5%
(b) 7.5%
(c) 10%
(d) at the discretion of the company

Q9: Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which matured four years back.
However, 1000 such debentures of 100 each are still remaining unclaimed and unpaid even after the maturity. State the
period after which the company needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain
unclaimed and unpaid.
(a) After the expiry of five years from the maturity date.
(b) After the expiry of six years from the maturity date
(c) After the expiry of seven years from the maturity date
(d) After the expiry of eight years from the maturity date.

Q10: After declaration, dividend shall be paid within

(a) 14 days
(b) 21 days
(c) 30 days
(d) 45 days

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 CA Inter Law Test Marathon – Test 3
PART – II
(20 marks)

 Question paper comprises 4 questions. Answer Question No. 1 which is compulsory and any 2 out of the remaining 3
questions.
 Working notes should form part of the answer.

1.
(a) WL Limited is facing loss in business during the current financial year 2015-16. In the immediate preceding three
financial years, the company had declared dividend at the rate of 8%, 10% and 12% respectively. To maintain the
goodwill of the company, the Board of Directors has decided to declare 12% interim dividend for the current
financial year. Examine the applicable provisions of the Companies Act, 2013 and state whether the Board of
Directors can do so?
(4 marks)
(b) A General meeting was scheduled to be held on 15th April, 2016 at 4:00 P.M. As per the notice the members who
are unable to attend the meeting in person can appoint a proxy and the proxy forms duly filed should be sent to
the company so as to reach at least 48 hours before the meeting. Mr. X, a member of the company appoints Mr. Y
as his proxy and the proxy form dated April 10, 2016 was deposited by Mr. Y with the company at its registered
office on April 11, 2016. However, Mr. X changes his mind and on April 12, 2016 gives another proxy to Mr. Z
and it was deposited on the same day with the company. Similarly, another member Mr. W also gives 2 separate
proxies to 2 individuals named Mr. M and Mr. N. In the case of Mr. M, the proxy dated April 12, 2016 was
deposited with the company on the same day and the proxy form in favour of Mr. N was deposited on April 14,
2016. All the proxies viz. Y, Z, M and N were present before the meeting.
According to the provisions of Companies Act, 2013, who would be the persons allowed to represent as proxies
for members X and W respectively.
(4 marks)

2.
(a) Mr. Pink held 100 partly paid up shares of Red Limited. The company asked him to pay the final call money on the
shares. Due to some unavoidable circumstances he was unable to pay the amount of call money to the company. At
a general meeting of the shareholders, the chairman disallowed him to cast his vote on the ground that the articles
do not permit a shareholder to vote if he has not paid the calls on the shares held by him. Mr. Pink contested the
decision of the Chairman. Referring to the provisions of the Companies Act, 2013 decide whether the contention of
Mr. Pink is valid.
(3 marks)
(b) The Annual General Meeting of ABC Limited declared a dividend at the rate of 30% payable on paid up equity
share capital of the Company as recommended by Board of Directors on 30th April, 2019. But the Company was
unable to post the dividend warrant to Mr. Ranjan, an equity shareholder of the Company, up to 30th June, 2019.
Mr. Ranjan filed a suit against the Company for the payment of dividend along with interest at the rate of 20 percent
per annum for default period. Decide in the light of provisions of the Companies Act, 2013, whether Mr. Ranjan
would succeed? Also, state the directors’ liability in this regard under the Act.
(3 marks)

3. Due to heavy rains and floods Chennai Handloom Limited was unable to convene annual general meeting upto 30th
September, 2017. The company has not filed the annual financial statements, or the annual return as the directors of the
company are of the view that since the annual general meeting did not take place, the period of 60 days for filing of annual
return is not applicable and thus, there is no contravention of Section 92 of the Companies Act, 2013. Discuss whether the
contention of directors is correct. Further, who are the persons required to sign the annual return.
(6 marks)

4.
(a) Alpha Ltd., A Section 8 company is planning to declare dividend in the Annual General Meeting for the Financial
Year ended 31-03-2018. Mr. Chopra is holding 800 equity shares as on date. State whether the act of the company
is according to the provisions of the Companies Act, 2013.

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 CA Inter Law Test Marathon – Test 3
(2 marks)

(b) Examine the validity of the following decisions of the Board of Directors with reference of the provisions of the
Companies Act, 2013.
i. In an Annual General Meeting of Vrinda Ltd. having share capital, 80 members present in person or by
proxy holding more than 1/10th of the total voting power, demanded for poll. The chairman of the meeting
rejected the request on the ground that only the members present in person can demand for poll.
ii. In an annual general meeting, during the process of poll, the members who earlier demanded for poll want
to withdraw it. The chairman of the meeting rejected the request on the ground that once poll started, it
cannot be withdrawn.
(4 marks)

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