CA Inter Jan 26 Suggested Answers | Corporate and Other Laws
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CA Inter Jan 26 Suggested Answer Other Subjects Blogs :
Case Scenario – I
Globacom Pvt. Ltd., a tech services company headquartered in India, plans to engage in several foreign exchange transactions:
The Finance Team must determine which transactions are permitted, which require prior government approval, and which are strictly prohibited under the applicable provisions of the Foreign Exchange Management Act, 1999 (FEMA).
Based on the above facts, answer the following questions: (Q. No. 1 to Q. No. 3)
1. Related to the remittance of the amount mentioned for sponsoring a private tech conference abroad – which of the following is the correct option?
(A) Prohibited under Schedule I.
(B) Allowed freely as it is a promotion of trade.
(C) Requires prior approval under Schedule II.
(D) Does not require approval from the Government if routed via EEFC or RFC account.
Sponsorship of a private tech conference abroad is treated as a current account transaction under FEMA. Since such sponsorship is considered promotion of trade and professional services, it is freely permissible and does not require prior Government or RBI approval, provided it is within the prescribed limits.
2. Above said royalty remittance under a technical collaboration agreement –
Which of the following is the correct option?
(A) Prohibited under Schedule I.
(B) Freely permissible without approval.
(C) Requires approval under Schedule II since the amount exceeds thresholds.
(D) Only allowed if remitted from an EEFC or RFC account.
Royalty remittance under a technical collaboration agreement is treated as a current account transaction under FEMA. Such royalty payments are freely permissible and do not require prior approval, provided they are made in accordance with the applicable FEMA regulations.
3. Globacom has made two other remittances:
(1) Marketing payment (₹15,000/-) in foreign print media to promote inbound tourism.
(2) Cultural exchange tours sponsorship worth USD 80,000.
Which of the following is the correct option?
(A) (1) is allowed freely, but (2) requires prior government approval.
(B) Both (1) and (2) are freely permissible.
(C) (1) requires approval, but (2) is freely permissible.
(D) (1) is prohibited, and (2) requires approval.
Case Scenario – II
M/s ABCD Capital Limited, a listed public company, was found guilty of manipulating its share prices through false disclosures in its quarterly financial statements. The company’s Managing Director, Mr. Arvind, was charged under:
Section 447 of the Companies Act, 2013 (Fraud), and
Regulation 9 & 10 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, read with Section 24 of the SEBI Act, 1992, for misleading investors and distorting the securities market.
The SEBI Adjudicating Officer imposed a monetary penalty of ₹ 25 lakh and recommended criminal prosecution. Later, the Special Court under the Companies Act also imposed a fine of ₹ 10 lakh and three years’ imprisonment on Mr. Arvind for the same fraudulent act.
Mr. Arvind appealed, raising two legal objections:
That he cannot be punished twice for the same act of fraud under both SEBI and the Companies Act (double punishment issue).
That the fine imposed under the SEBI Act cannot be recovered using the Code of Criminal Procedure, since SEBI laws are “special” enactments with their own mechanisms.
Based on the facts given in the above case scenario and by applying the relevant provisions of the General Clauses Act, 1897, choose the correct answer of the following questions: (Q. No. 4 to Q. No. 5)
4. If the SEBI Act, 1992 does not expressly exclude the application of Code of Criminal Procedure provisions for fine recovery, which of the following is correct as per the provisions of the General Clauses Act, 1897?
(A) Code of Criminal Procedure provisions like issuance of warrant for levy of fine will automatically apply.
(B) The fine cannot be recovered under Code of Criminal Procedure because SEBI is a special law.
(C) SEBI must recover fines only through civil recovery suits.
(D) The Central Government must issue a separate recovery notification.
Where a special law (SEBI Act) does not expressly exclude the application of the Code of Criminal Procedure, Section 4(2) of CrPC read with Section 26 of the General Clauses Act, 1897 allows the general procedural law to apply.
Accordingly, CrPC provisions for recovery of fine (including issuance of warrant) will automatically apply, unless specifically barred by the special enactment.
5. Which of the following statements correctly applies to Mr. Arvind’s claim of “double punishment” under the General Clauses Act, 1897?
(A) He can be punished twice under both enactments for the same offence.
(B) He cannot be tried under both SEBI Act and Companies Act for the same fraudulent act.
(C) He can be tried and convicted under both enactments but cannot be punished twice for the same offence.
(D) Once SEBI imposes a penalty, Companies Act proceedings automatically become void.
Under Section 26 of the General Clauses Act, 1897, where an act constitutes an offence under two or more enactments, the offender may be prosecuted and convicted under either or any of those enactments, but shall not be punished twice for the same offence.
Hence, parallel proceedings under the SEBI Act and the Companies Act are valid, but double punishment for the same fraudulent act is barred.
Case Scenario – III
Aquarius Design LLP was incorporated on 1st April 2023 with three partners – Arjun, Anjali, and Nakul.
Arjun and Anjali were Designated Partners, while Nakul was an ordinary partner contributing ₹ 5 lakh capital.
In August 2023, Nakul withdrew ₹ 3 lakh from the LLP’s bank account without prior consent and used it to repay his personal car loan. The LLP later suffered a major business loss and defaulted on a vendor payment of ₹ 7 lakh. Meanwhile, Anjali went abroad for six months and stopped taking part in management but remained formally a designated partner.
In January 2024, the LLP admitted a new partner Bheem, a relative of Arjun, but no notice of his admission was filed with the Registrar. Around the same time, the LLP borrowed ₹ 10 lakh from Mr. Sharma, who believed Anjali was still actively managing the firm.
Later, an internal audit revealed that Arjun knowingly prepared a false Statement of Account & Solvency, showing profits though the LLP was in serious financial trouble. The LLP failed to file that statement within the prescribed period and continued business till October 2024, when Mr. Sharma demanded repayment.
Based on the facts given in the above case scenario and by applying the relevant provisions of the Limited Liability Partnership Act, 2008 (LLP), choose the correct answer of the following questions: (Q. No. 6 to Q. No. 7)
6. (i) Is Bheem liable to Mr. Sharma for LLP debts incurred before his admission, since no notice of admission was filed? &
(ii) Is Arjun personally liable for LLP obligations arising from the false Statement of Account & Solvency not filed within time?
(A) (i) No & (ii) Yes
(B) (i) Yes & (ii) Yes
(C) (i) Yes & (ii) No
(D) (i) No & (ii) No
(i) A new partner is not liable for LLP obligations incurred before his admission, even if notice of admission is not filed with the Registrar.
(ii) A designated partner who knowingly prepares a false Statement of Account & Solvency and fails to file it within time is personally liable for penalties and consequences arising from such default and fraud.
Hence, (i) No & (ii) Yes is correct.
7. (i) Is Nakul personally liable for the ₹ 3 lakh withdrawn from LLP funds for personal use? &
(ii) Is Anjali, who was a designated partner but inactive and abroad, personally liable for vendor debts incurred while she was away?
(A) (i) No & (ii) Yes
(B) (i) Yes & (ii) Yes
(C) (i) No & (ii) No
(D) (i) Yes & (ii) No
(i) Yes, Nakul is personally liable –
A partner who withdraws LLP money for personal use without authority is required to indemnify the LLP for the loss. Hence, Nakul is personally liable for ₹ 3 lakh.
(ii) Yes, Anjali is personally liable –
A designated partner is responsible for compliance and acts of the LLP. Mere absence or non-participation does not absolve her from liability, especially when defaults and debts arise during her tenure as a designated partner.
Case Scenario – IV
Sunset Pvt. Ltd., a private company incorporated in 2016, was engaged in large-scale construction projects. In April 2024, the company faced a severe cash crunch. The board decided to raise funds urgently. On 20th April 2024, one of the directors, Mr. Ramesh, advanced ₹ 25 lakh to the company. He orally stated that the money came from his personal account but did not provide any written declaration.
On 25th April 2024, the company also circulated a notice inviting deposits from the public promising 11% interest. Within 15 days, ₹ 80 lakh was collected from the public. The company did not appoint any trustees, did not deposit 20% of maturing deposits into a Deposit Repayment Reserve Account, nor did it purchase deposit insurance.
In June 2024, Sunset Pvt. Ltd. borrowed ₹ 2 crore from Horizon Bank against the creation of a mortgage on its plant and machinery. However, the company never filed particulars of the charge with the Registrar of Companies. In March 2025, default occurred both in repayment of deposits and in repayment of the bank loan. Subsequently, winding-up proceedings were initiated. During liquidation, depositors filed claims before the Tribunal for repayment of deposit amount along with interest. Horizon Bank also sought to enforce its security.
Meanwhile, the company had fixed its Annual General Meeting (AGM) on 30th September 2024. The notice was issued to all members on 10th September. On the scheduled date of AGM, only one shareholder attended within half an hour of the meeting time. The chairperson adjourned the meeting to 7th October 2024. On the adjourned date, again only one shareholder was present, but resolutions regarding approval of accounts and reappointment of a director were passed. Another member later challenged the validity of those resolutions.
In parallel, a group of minority shareholders alleged that the invitation for deposits was a disguised attempt by the directors to avoid stricter conditions of raising secured loans, and that the company deliberately failed to comply with deposit-related provisions. They filed a complaint seeking disqualification of directors for contravention of statutory requirements. The Tribunal was also approached to determine whether the resolutions passed at the adjourned meeting could bind absent shareholders when only one member attended. The creditors argued that such resolutions could not stand in law, whereas the directors maintained that said resolutions were validly passed under statutory provisions.
Adding to the complications, the Ministry initiated prosecution under Section 76A of the Companies Act, 2013, for default in repayment of deposits, making every officer of the company personally liable with fines and imprisonment. At the same time, the Registrar imposed penalties under Section 86 of the Companies Act, 2013, for failure to register charges. Directors argued that since the company was already in winding-up, they should not be personally liable. The Tribunal had to decide whether liability under Section 76A attracted automatically on default and whether non-registration of charges rendered Horizon Bank’s security unenforceable in liquidation.
Based on the facts given in the above case scenario and by applying the relevant provisions of the Companies Act, 2013, choose the correct answer of the following questions: (Q. No. 8 to Q. No. 10)
8. The default by Sunset Pvt. Ltd. in repaying deposits raised from the public, and the initiation of proceedings under Section 76A, will result in:
(A) Directors liable only if wilful fraud is proved.
(B) Only the company being punishable with fine, directors not liable.
(C) Both company and every officer in default being liable, with imprisonment possible.
(D) Only depositors entitled to civil recovery, no criminal liability arises.
Under Section 76A, where a company fails to repay deposits or interest, the company as well as every officer in default are personally liable.
The provision expressly provides for punishment with fine and imprisonment, and proof of wilful fraud is not required—mere default is sufficient to attract liability.
Hence, both the company and every officer in default are liable, with imprisonment possible.
9. For failure to register a charge created in favour of Horizon Bank, the effect under Section 77 read with Section 86 is:
(A) The charge remains valid against liquidator and creditors, but company is fined.
(B) The charge is void against liquidator and creditors, and company along with officers are liable for penalty.
(C) The charge becomes void ab initio even between company and bank.
(D) The charge can still be enforced if bank produces the mortgage deed in court.
Under Section 77, a charge not registered with the Registrar is void against the liquidator and other creditors, though it remains valid as between the company and the charge-holder.
Further, Section 86 imposes penalty on the company and every officer in default for failure to register the charge.
Accordingly, the charge is void against the liquidator and creditors, and the company along with officers are liable for penalty.
10. In the adjourned general meeting of Sunset Pvt. Ltd., where only one shareholder attended and resolutions were passed, the validity of such resolutions will be determined by:
(A) Section 103, which provides that members present at adjourned meeting form quorum.
(B) Articles of Association only.
(C) Section 96, which deals with the holding of AGM.
(D) Tribunal’s discretion under Section 98.
As per Section 103, if a meeting is adjourned due to lack of quorum, the members present at the adjourned meeting shall constitute the quorum, regardless of their number.
Hence, even one shareholder present at the adjourned AGM can validly transact business, and the resolutions passed are valid and binding.
Therefore, Section 103 governs the validity of resolutions passed at the adjourned meeting.
Case Scenario – V
Novus Labs LLP was formed in 2019 by three practising technologists, Asha (designated partner no. 1), Rohan (designated partner no. 2) and Mira (partner).
In 2024, Novus decided to convert into a private limited company to raise institutional capital and to offer stock options to employees. The LLP completed conversion formalities and on 10th October 2024, Novus Labs Pvt. Ltd. (the Company) was incorporated. Asha (who had acted as the LLP’s designated partner and had been the compliance lead) became Managing Director and retained 60% of equity, Rohan became a non-executive director, Mira took 10% equity, while the balance was allotted to two angel investors.
Within the same financial year, Novus Labs Pvt. Ltd. planned two fund-raising steps.
First, on 20th November 2024, the Board approved a private placement offer to identified investors aggregating to 205 persons (the invitations included 5 Qualified Institutional Buyers and 10 employees to be issued under the employee stock option scheme). The Board relied on the fact that these investors were known to the company and treated the issue as a private placement.
Second, in March 2025, the company proposed a rights issue to raise further working capital (i.e. 1 right equity share for every 2 equity shares held) and sent the notice of offer to shareholders only two days prior to opening the issue. Ninety-four percent (94%) of the members had earlier given written consent via email that the company may adopt a short notice period.
During the private placement process, some foreign subscribers were nationals of a neighbouring country that shares a land border with India; the company’s secretarial team received queries whether additional Government approvals under FEMA were required.
Meanwhile, Asha (now MD) received a notice from an investor alleging non-compliance with procedural formalities for private placement and warning of invocation of penalties and refund obligations under the Companies Act. The company’s finance head is not sure whether the 205-persons invitation is treated as a public offer; whether QIBs and employees are to be counted in the 200-person threshold; whether the dispatch of short notice of offer (2 days) for the rights issue is valid for this private company; and whether Asha (previously designated partner) has any special filing or liability exposure for procedural defaults that may arise under the relevant provisions.
Based on the facts given in the above case scenario and by applying the relevant provisions of the Companies Act, 2013, choose the correct answer of the following questions: (Q. No. 11 to Q. No. 12)
11. The company sent the rights-issue notice to shareholders only two days prior to opening the issue. Considering Sections 60–62 implications and conversion of LLP to Company (designated partner Asha is now MD), which statement is correct?
(A) The rights issue is invalid because Section 62 requires a minimum of 15 days’ notice to shareholders and no member consent can shorten this statutory minimum period.
(B) The rights issue is valid in a private company since the shareholders’ written consent exceeded 90%, so the 2-day dispatch is acceptable for this private company; Asha (formerly designated partner) will be treated as an officer/director for compliance purposes and is bound by filing/penalty provisions if defaults occur.
(C) The rights issue is valid only if the company is listed; for unlisted private companies Section 62 does not apply.
(D) The rights issue is valid only if the company simultaneously increases its authorised capital first by an ordinary resolution and also obtains written consent from shareholders holding not less than 95% shares; otherwise the offer is void.
12. In the facts above the company issued private placement invitation letters to 205 identified persons in aggregate during the financial year. Which of the following statements is correct?
(A) The company need not file any return of allotment (Form PAS-3) for private placement issues and hence has no filing exposure.
(B) The issue will be deemed to be a public offer (Sections 23–41 will apply) because the total number of invitees (205) exceeds 200, so Section 42 is violated.
(C) Even if excluded, because any single allotment to more than 180 persons is prohibited, the issue is invalid and the entire subscription must be refunded.
(D) The issue will not be deemed a public offer because QIBs and employees under an ESOP are excluded while computing the 200-person threshold; after excluding them the count is 190 (<200), so it remains a valid private placement, subject to other procedural compliances.
Accordingly, the offer is not deemed to be a public offer and remains a valid private placement, subject to compliance with other procedural requirements (like PAS-4, PAS-3, separate bank account, etc.).
Case Scenario – VI
In Hyderabad’s tech hub, Horizon Innovations Ltd. was a fast-growing company, famous for its digital payment solutions. But in 2022, the company faced a serious problem—not with its technology, but with the auditor who was supposed to audit its financial statements.
At the AGM on September 30, 2021, shareholders appointed M/s. Vikas & Associates as statutory auditor for 2021–22. The firm’s lead partner, Vikas Reddy, was a respected CA with 15 years of experience. Most shareholders trusted him, but one investor, Anjali Desai, who owned 10% shares, was suspicious. When Anjali checked the auditor’s background, she found the following issues:
Vikas Reddy’s spouse owned 10,000 shares (₹100 each) in Horizon, which was never disclosed.
The firm had taken a ₹50 lakh loan from Horizon in 2020, still unpaid.
Vikas had also provided tax consultancy services to Horizon in 2020–21.
The firm did not submit the mandatory eligibility certificate under the Companies Act, 2013.
Anjali complained to the Registrar of Companies (ROC), Hyderabad, stating that the auditor was ineligible under Section 141. The investigation confirmed her claims. The ROC ruled that Vikas & Associates was ineligible and must vacate office under Section 141(4) and imposed penalties.
Horizon Innovations Ltd. was fined ₹2,00,000 for appointing an ineligible auditor.
Vikas & Associates was fined ₹50,000 for accepting the appointment.
Further, Horizon was ordered to call an Extraordinary General Meeting (EGM) within 60 days to appoint a new eligible auditor.
Based on the facts given in the above case scenario and by applying the relevant provisions of the Companies Act, 2013, choose the correct answer of the following questions: (Q. No. 13 to Q. No. 15)
13. Vikas & Associates argued that the 10,000 shares held by Vikas Reddy’s spouse were held in her personal capacity and not in the firm’s name. How should this argument be treated under professional ethics and company law?
(A) Acceptable only if disclosed to the Board before appointment.
(B) Acceptable, as the shares were not in the auditor’s name.
(C) Not acceptable, as relatives’ shareholding is also considered for eligibility.
(D) Acceptable if the auditor’s spouse had no voting rights.
Under Section 141(3)(d), an auditor is ineligible if the auditor or his relative (including spouse) holds any security or interest in the company (beyond the permitted threshold).
Therefore, shareholding by the auditor’s spouse is also counted, irrespective of whether it is held in a personal capacity or in the firm’s name.
Hence, the argument is not acceptable under company law and professional ethics.
14. The audit firm did not furnish the eligibility certificate as prescribed before its appointment. What is the importance of this certificate?
(A) It is a mandatory requirement under Section 139(1) read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014, confirming that the auditor satisfies the eligibility criteria under Section 141.
(B) It is a voluntary self-declaration provided at the auditor’s discretion.
(C) It is a requirement applicable only to listed companies.
(D) It is a certificate issued by ICAI attesting to the auditor’s professional competence.
Under Section 139(1) read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014, an auditor must furnish a written certificate at the time of appointment.
This certificate confirms compliance with eligibility and non-disqualification conditions under Section 141, as well as other statutory requirements.
Failure to submit this certificate makes the appointment procedurally defective and exposes the auditor and company to penal consequences.
15. Following the regulatory authority’s decision, Horizon Innovations Ltd. was penalized and directed to convene an Extraordinary General Meeting (EGM) to address the auditor’s disqualification. Which of the following provisions correctly applies in this situation?
(A) The regulatory authority has the power to directly appoint a new auditor for the company.
(B) When an auditor becomes disqualified, the auditor must vacate the position, and such vacation shall be deemed to be a casual vacancy and the company is required to appoint another eligible auditor.b
(C) The law requires the company to rotate its auditors periodically each financial year.
(D) The company may retain the same auditor by passing a special resolution till the next AGM.
When an auditor becomes disqualified under Section 141, he must vacate office immediately as per Section 141(4).
Such vacation is treated as a casual vacancy, and the company is mandatorily required to appoint another eligible auditor in accordance with Section 139 (through shareholders, generally via EGM if required).
The regulator cannot directly appoint the auditor, and the disqualified auditor cannot be retained.
ABC Ltd., a listed company in the Indian manufacturing sector, has concluded its financial year ended 31st March 2025. The company is now considering declaring a final dividend of ₹ 3 per equity share, with a face value of ₹ 10 per share. Before proceeding, the Board of Directors seeks to ensure that the proposed dividend complies with all relevant provisions of the Companies Act, 2013, particularly those related to the permissible sources and conditions for dividend distribution.
The summarized financial position of the company for FY 2024–25 is as follows:
Revenue from operations amounts to ₹ 10,000 lakhs, and
Other income contributes an additional ₹ 1,000 lakhs, bringing the total income to ₹ 11,000 lakhs.
The company has incurred expenses (excluding depreciation) of ₹ 8,000 lakhs, and provided for depreciation of ₹ 1,200 lakhs, as per Schedule II of the Companies Act.
The resulting profit before tax (PBT) stands at ₹ 1,800 lakhs, with a tax provision of ₹ 450 lakhs, leading to a net profit after tax (PAT) of ₹ 1,350 lakhs.
In addition to current year earnings, ABC Ltd. has accumulated earnings of ₹ 2,000 lakhs from previous financial years and holds free reserves (excluding any revaluation reserves) of ₹ 500 lakhs. The company has 100 lakh equity shares, and the total proposed dividend payout amounts to ₹ 300 lakhs (i.e., ₹ 3 per share).
Based on the above information, analyse whether ABC Ltd. is eligible to declare dividends under the following scenarios in compliance with the Companies Act, 2013:
Out of the current year’s profits.
Out of the accumulated profits of previous years only.
Support your answer with appropriate provisions and calculations under the Companies Act, 2013.
MNP Tech Ltd., a fast-growing start-up in Bangalore, recently issued equity shares at a premium of ₹ 200 per share, raising a Securities Premium balance of ₹ 10 crore.
The CFO proposes the following uses of the Securities Premium Account to manage the company’s financial commitments and investor expectations:
To write off advertisement expenses of ₹ 50 lakhs incurred during the product launch.
To issue fully paid bonus shares worth ₹ 2 crore to the existing shareholders, as a gesture of goodwill.
To provide ₹ 1.5 crore for the premium payable on redemption of shares.
To distribute ₹ 1 crore as interim dividend since the company has not yet earned adequate profits.
As a legal advisor to the company, examine the validity of each proposed use with reference to the Companies Act, 2013.
Skynex Ltd., incorporated in India in 2024, is engaged in the manufacture of lithium batteries for two-wheelers. The company markets its products domestically and exports to Mexico. During the financial year 2025, the company engaged in the following transactions:
(i) Commission paid to an agent in Mexico for the sale of the company’s commercial plot in India to the tune of USD 50,000 against the inward remittance of USD 9,50,000 from the Exchange Earners’ Foreign Currency (EEFC) Account.
Examine whether the above transaction is exempt from the approval of the RBI, with reference to the relevant provisions of the Foreign Exchange Management Act, 1999 (FEMA).
(ii) Bob, a Director at Skynex Ltd., along with his wife, major son, and father, purchased a property in Mexico, holding equal shares in the property. They collectively remitted USD 1,000,000 during the financial year. Bob confirmed that all family members complied with the applicable terms and conditions, and the amount sent is within the limit prescribed for remitting funds to Mexico.
Examine whether Bob and his family members can remit USD 1,000,000 to Mexico in a single financial year without requiring any approval.
Amrit Prakash Ltd. was incorporated in 1996 and its registered office is in Dehradun. For expanding the business in manufacturing mobile equipment (including spare parts) to mobile accessories also, the company required capital. For this purpose, the company issued 10,00,000 equity shares of ₹ 10 each at par to the public by issuing a prospectus.
The prospectus discloses the minimum subscription amount of ₹ 50,00,000 required to be received on application of shares, and the share application money payable is ₹ 5 per share. The prospectus further reveals that Amrit Prakash Ltd. has applied for listing of shares on a recognised stock exchange, which application has been rejected.
The issue was fully subscribed and Amrit Prakash Ltd. received ₹ 50,00,000 on share application. The company then proceeded for allotment of shares.
Examine the disclosures in the above case study which are the deciding factors in an allotment of shares and the consequences for violation, if any, under the provisions of the Companies Act, 2013.
PRT Ltd. is an eligible public company. The following details are available from its audited balance sheet as on 31st March 2024:
The company now proposes to accept further deposits during the year 2024–25:
You are required to examine, with reference to the relevant provisions of the Companies Act, 2013, whether the above proposal is valid. If not, calculate the maximum permissible deposits in each category.
ABC Ltd. is in the business of manufacturing life-saving drugs. The company has its plant in Kerala. The turnover for the last financial year crossed ₹ 52 crore. During the first quarter of the current financial year (2024–25), the company’s turnover has already reached ₹ 50 crore. ABC Ltd. is expecting its turnover to reach ₹ 200 crore for the financial year 2024–25.
The company held its Board meeting on August 1, 2024, and decided to appoint a cost auditor for the financial year 2024–25.
(i) According to the General Clauses Act, 1897, by what date must ABC Ltd. file the cost auditor appointment, and how is this timeline calculated?
(ii) ABC Limited’s failure to appoint a cost auditor, where it is statutorily required, constitutes an offence under Section 148 of the Companies Act, 2013. What is meant by “offence” under the General Clauses Act, 1897?
A group of five professionals decided to start a private limited company in the anti-drone solutions sector under the name Ddrone Pvt. Ltd. in April 2025. The company wants to have its registered office in Mumbai.
On April 2, 2025, it applied for name reservation through RUN (Reserve Unique Name) and received approval on April 6, 2025. On May 15, 2025, due to a delay in documentation, the SPICe+ (Simplified Proforma for Incorporating Company Electronically) Plus (INC-32) form for incorporation was filed after 39 days from the date of name reservation.
The company proposed two directors, one Indian resident and one foreign national residing in the U.S. The foreign director did not have a DIN, and his passport was notarized but not apostilled. The company’s registered office address was not finalized at the time of filing INC-32.
The Memorandum of Association (MoA) and Articles of Association (AoA) were signed electronically, but one subscriber used a digital signature of a third party (his consultant) with verbal consent.
Based on the above facts and applicable provisions of the Companies Act, 2013, answer the following questions:
(i) Was the name Ddrone Pvt. Ltd. still valid when INC-32 was filed on May 15, 2025?
(ii) Is it mandatory to provide the company’s registered office address at the time of incorporation? What is the time limit to furnish it otherwise?
(iii) What are the consequences if the company fails to file the declaration for commencement of business within the prescribed time, and fails to carry on any business or operations?
LMN Ltd. created a charge on one of its plant and machinery in favour of a financial institution. The company secretary was on leave when the charge was created. To avoid delay, an accounts officer of the company entered the particulars of the charge in the Register of Charges without any authorisation of the Board.
Later, a dispute arose between two creditors regarding priority of charges. One creditor challenged the validity of the Register entries, claiming that the entries were unauthorised and not duly authenticated as per law.
Based on the Companies (Registration of Charges) Rules, 2014, examine whether the entry made in the Register of Charges by the accounts officer is legally valid and what consequences may follow in case of non-authentication.
Write any four differences between The Rule of Beneficial Construction and The Rule of Exceptional Construction.
The Board of Directors of XYZ Petrochemicals Limited consists of:
The Board as a policy does not authorise the chairperson of the company to sign the financial statements. The Profit and Loss Account and Balance Sheet of the company were signed by Mr. N, Mr. P and Mr. A.
Examine whether the authentication of financial statements of the company is in accordance with the provisions of the Companies Act, 2013.
What would be your answer in case the company is a One Person Company (OPC) and has only one Director, who has authenticated the Balance Sheet, Statement of Profit & Loss and the Board’s Report?
ABC LLP is engaged in the business of providing software consulting services. Due to an economic slowdown, the LLP is unable to meet its obligations towards some creditors. The management of ABC LLP proposes a compromise arrangement with its creditors to restructure its outstanding debts by extending repayment periods and waiving a portion of interest.
The LLP files an application before the National Company Law Tribunal (NCLT), seeking directions to convene a meeting of its creditors.
At the meeting, creditors representing 80% of the total value of debts agree to the proposed arrangement. The Tribunal, after ensuring that all material facts including the LLP’s latest financial statements and disclosure of pending tax investigations have been presented, sanctions the compromise.
However, ABC LLP fails to file the Tribunal’s order with the Registrar within the prescribed period. Examine the validity of the compromise or arrangement approved by the creditors and sanctioned by the Tribunal with reference to the Limited Liability Partnership Act, 2008. Also explain the effect of failure by ABC LLP to file the Tribunal’s order with the Registrar.
Statutory interpretation becomes essential when the language of a statute is unclear or leads to ambiguity. Discuss the circumstances under which the interpretation of statutes is applied.
Zen Tech Ltd., a company incorporated in Singapore, has a branch office in Bengaluru, India. The financial year of the company ends on 31st March 2025. As per the provisions of the Companies Act, 2013, Zen Tech Ltd. is required to file certain documents with the Registrar of Companies (ROC) every year. However, due to internal audit delays in its Singapore headquarters, the company could not finalize its financial statements by the end of September 2025.
The management seeks clarification on the following points:
(i) What documents need to be filed by Zen Tech Ltd. along with its financial statements with the Registrar?
(ii) By what time should these documents normally be filed?
Examine the above as per the provisions of the Companies (Registration of Foreign Companies) Rules, 2014.
Amit and Priya are partners in XYZ LLP, a consulting firm. Recently, Priya moved to a new address but forgot to notify the LLP within the required period. A month later, Amit’s cousin, Ramesh, expressed interest in joining XYZ LLP as a partner and, after discussions, was accepted as a new partner. However, XYZ LLP did not immediately update the Registrar of Companies (ROC) regarding Priya’s address change or Ramesh’s admission as a partner. After 45 days of joining Mr. Ramesh, the LLP filed a notice with the ROC about these changes.
Advise the LLP about the default on part of the LLP regarding non-compliance in respect of not informing the ROC about:
(i) Whether Ms. Priya contravened any provision regarding address change?
(ii) Default on non-compliance in Mr. Ramesh’s admission as a partner.
Under an enactment, an excise duty of ₹ 10 is levied on every 100 litres of a certain chemical produced in a factory. During inspection, it was found that Factory A had produced 350 litres of that chemical but had paid duty only for 300 litres, arguing that the Act only specifies duty per 100 litres and does not mention fractional quantities.
With reference to the General Clauses Act, 1897, determine whether the factory is liable to pay excise duty on the remaining 50 litres. Support your answer with reasoning.
(i) Monika Solutions Pvt. Ltd. is registered as a One Person Company (OPC) under the Companies Act, 2013. Mr. Gautam Kumar is the sole member and director of the company. With the financial year ending on 31st March 2025, the company is preparing to comply with its annual filing and disclosure requirements.
Mr. Gautam Kumar is uncertain whether his company is required to hold an Annual General Meeting (AGM) or whether there are any alternative procedures that his company can follow. As a financial advisor, please advise Mr. Gautam Kumar on this matter.
(ii) What is the difference between a motion and a resolution?
(i) Saras Ventures Ltd., a public limited company incorporated under the Companies Act, 2013, has a Board comprising seven directors. A group of shareholders holding 1.2% of the total voting power has expressed dissatisfaction with one of the directors, Mr. Ankur Chabra, and has proposed his removal under Section 169 of the Companies Act, 2013.
The company’s Annual General Meeting (AGM) is scheduled for 25th August 2025. On 1st August 2025, the company received a special notice under Section 115, proposing an ordinary resolution for the removal of Mr. Ankur Chabra at the upcoming AGM.
However, the company subsequently failed to notify its members of the special notice.
With reference to the applicable provisions of the Companies Act, 2013, examine:
(ii) What are the consequences of failure to notify the members about the special notice?
RMP Private Limited is an unlisted company having:
The company is not required to prepare its financial statements as per the Companies (Indian Accounting Standards) Rules, 2015.
The company filed its financial statements for the financial year 2024–25 in Form AOC-4 (normal form) instead of Form AOC-4 XBRL.
State the classes of companies required to file financial statements and documents in XBRL format under Section 137 of the Companies Act, 2013, and examine whether RMP Private Limited has complied with the applicable legal provisions.
Examine the given situations in the light of the Foreign Exchange Management Act, 1999 (FEMA):
Ruchika Saboo
An All India Ranker (AIR 7 - CA Finals, AIR 43 - CA Inter), she is one of those teachers who just loved studying as a student. Aims to bring the same drive in her students.
Ruchika Ma'am has been a meritorious student throughout her student life. She is one of those who did not study from exam point of view or out of fear but because of the fact that she JUST LOVED STUDYING. When she says - love what you study, it has a deeper meaning.
She believes - "When you study, you get wise, you obtain knowledge. A knowledge that helps you in real life, in solving problems, finding opportunities. Implement what you study". She has a huge affinity for the Law Subject in particular and always encourages student to - "STUDY FROM THE BARE ACT, MAKE YOUR OWN INTERPRETATIONS". A rare practice that you will find in her video lectures as well.
She specializes in theory subjects - Law and Auditing.
Yashvardhan Saboo
A Story teller, passionate for simplifying complexities, techie. Perfectionist by heart, he is the founder of - Konceptca.
Yash Sir (As students call him fondly) is not a teacher per se. He is a story teller who specializes in simplifying things, connecting the dots and building a story behind everything he teaches. A firm believer of Real Teaching, according to him - "Real Teaching is not teaching standard methods but giving the power to students to develop his own methods".
He cleared his CA Finals in May 2011 and has been into teaching since. He started teaching CA, CS, 11th, 12th, B.Com, M.Com students in an offline mode until 2016 when Konceptca was launched. One of the pioneers in Online Education, he believes in providing a learning experience which is NEAT, SMOOTH and AFFORDABLE.
He specializes in practical subjects – Accounting, Costing, Taxation, Financial Management. With over 12 years of teaching experience (Online as well as Offline), he SURELY KNOWS IT ALL.
"Koncept perfectly justifies what it sounds, i.e, your concepts are meant to be cleared if you are a Konceptian. My experience with Koncept was amazing. The most striking experience that I went through was the the way Yash sir and Ruchika ma'am taught us in the lectures, making it very interesting and lucid. Another great feature of Koncept is that you get mentor calls which I think drives you to stay motivated and be disciplined. And of course it goes without saying that Yash sir has always been like a friend to me, giving me genuine guidance whenever I was in need. So once again I want to thank Koncept Education for all their efforts."
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