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Question Paper

Corporate & Other Laws Duration: 75

Details: Test- 2 Marks: 40

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Q-1 Binoy, an employee of National Bank Private Limited which is actively engaged in
Banking business, drawing a salary of Rs. 50,000 p.m., borrowed Rupees One lakh and
invested in the shares of the bank. Explain whether there is any violation in the light ofthe
provisions of the Companies Act, 2013. Would your answer be different if Binoy is akey
managerial personnel of the bank? (Note: “National Bank Private Limited” is a public
company.)

(4 Marks)

Q-2 (A) The Board of directors of Aakash Limited, a listed company, at its meeting held on 1st
April, 2015 announced a proposal for issue of Bonus shares to all equity shareholders of the
company at 1:1 ratio. On 1st May, 2015, the directors at another meeting passed a
resolution to reserve the proposal of bonus issue announced on 1 st April, 2015. Discuss the
validity of proposal and the reversal.

(4 Marks)

(B) ABC Ltd. has following balances in their Balance Sheet as on 31 st March, 2018

1 Equity shares capital (3.00 lakhs equity shares of ` 10 each) 30.00 lacs

2 Free reserves 5.00 lacs

3 Securities Premium Account 3.00 lacs

4 Capital redemption reserve account 4.00 lacs

5 Revaluation Reserve 3.00 lacs

Directors of the company seeks your advice in following cases:

 (i) Whether company can give bonus shares in the ratio of 1:3?
(ii) What if company decide to give bonus shares in the ratio of 1:2?

(5 Marks)

Q-3 Ashish Ltd. having a net-worth of Rs. 80 crores and turnover of Rs. 30 crores wants to
accept deposits from public other than its members. Referring to the provisions of the
Companies Act, 2013, state the conditions and the procedures to be followed by AshishLtd.
for accepting deposits from public other than its members.

(4 Marks)

Q-4 State, with reasons, whether the following statements are true or false?

(i) XYZ Private Limited may accept the deposits from its members to the extent of
Rs.60.00 Lakh, if the aggregate of its paid-up capital, free reserves and security
premium account is Rs.60.00 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.

(4 Marks)

Q-5 Excel Ltd. declared dividend for its shareholder in its Annual General Meeting held on
30/09/2017. Under the provisions of the Companies Act, 2013, company is required to pay
declared dividend within 30 days from the date of declaration. As per the provisions of the
General Clauses Act, 1897, discuss what will be the commencement and termination time
for posting of declared dividend?

(4 Marks)
Q-6 Mr. Vyas is the owner of House No. 20 in Geeta Colony, Delhi. He has rented two rooms
in this house to Mr. Iyer. The Income Tax Authority has served a show cause notice to Mr.
Vyas. The said notice was received by Mr. Iyer and returned the notice with an endorsement
of refusal. Decide with reference to provisions of “General Clauses Act, 1897”, whether the
notice was rightfully served on Mr. Vyas?

(5 Marks)

Q-7 MCQs:-

1. Mr. A died at the age of 72 leaving behind come movable and immovable properties to be
distributed between his two sons C & D, as per his registered will. His Will clearly mentioned
that all the immovable properly should go to C and all the movable property should go to D.
Both the brothers divided the properly as per will except below mentioned properties,
because they could not establish which property should go to whom. Kindly help them by
ticking the property/ies which should go to D (as per the provisions of the general Clause
Act, 1897)

(a) Standing crop in the fields

(b) Cut crop, ready to sell
(c) Tube well in the agriculture land
(d) Sandal Wood Tree

2. Corrupt Limited has received a request from Mr. Suresh for transfer of 100 partly paid
equity shares, to Mr. Ramesh. However Mr. Ramesh expired in the meantime, but no
intimation of the same has been received by the company. In the given circumstances,
advise as per the provisions of the Companies Act, 2013

(a) Corrupt Limited will not register the transfer the shares in the name of Mr.
Ramesh, without verification from Mr. Suresh
 (b) Corrupt Limited can register the shares in the name of Mr. Ramesh as it is not
aware of the untoward incident.
(c) Corrupt Limited will not register the transfer the shares in the name of Mr.
Ramesh, without verification from Mr. Ramesh
(d) Corrupt Limited will give the shares back to Mr. Suresh

3. On 30th June 2017, the liability side of Balance Sheet of X Ltd. showed balance of paid-up
share capital of Rs. 65 lacs, free reserve of Rs. 10 lacs, share premium account of Rs. 20 lacs,
deposits of Rs. 25 lacs, repayable in the current financial year, during the month of
September 2017. In July 2017, the company was in need of some short-term funds to the
tune of Rs. 20 lacs for a period of 6 months. The maximum amount which the company may
hold as deposit together with existing deposits will be –

(a) Rs. 33.25 Lacs

(b) Rs. 11.25 lacs
(c) Rs. 95 lacs
(d) Rs. 9.5 lacs

(3×2= 6 Marks)

4. As per Rule 3 (8), copy of the credit rating which is being obtained at least once in a year
shall be sent to the Registrar of Companies along with the Return of Deposits in Form
_____________

(a) DPT-3
(b) DPT-2
(c) DPT-4
(d) DPT-1
5. A Company limited by shares can issue equity shares with differential voting rights. Which
of the following is not a necessary condition to be fulfilled before issue of such shares?

(a) The articles of association of the company shall authorize issue of shares with
differential rights;
(b) The issue of shares shall be authorized by an ordinary resolution passed at a
general meeting of the shareholders;
(c) The company shall have consistent track record of distributable profits for the
last three years;
(d) The company has not defaulted in filing financial statements and annual returns
for 3 financial years immediately preceding the financial year in which it is
decided to issue such shares

6. What among the following could be considered in term ‘Immovable property’ as defined
under section 3(26) of the General Clauses Act, 1897?

(i) The soil for making bricks

(ii) Right to catch fish
(iii) Right to drain water
(iv) Doors and windows of the house

(a) Only (i) and (iv)

(b) Only (i), (ii) and (iv)

(c) Only (i) and (ii)

(d) Only (ii), (iii) and (iv)

7. ABC Ltd. wants to issue redeemable preference shares for a period of 35 years. Advise
whether it can do so.

(a) Yes, ABC Ltd. can issue redeemable preference shares

(b) Yes, ABC, Ltd. can issue redeemable preference shares but for only 30 years
(c) Instead of issuing of shares for 35 years, ABC Ltd. should issue irredeemable
preference shares.
(d) Yes, ABC Ltd. can issue redeemable preference shares for a period not extending 20
years.

(1 × 4 = Total 4 Marks)