www.escholars.

in

CA Foundation
Business Laws
The Companies Act, 2013
Test Paper - 2
Introduction of Company
Time Allowed: 1 Hour Maximum Marks: 20
Q. No. Questions Marks
1. Some of the creditors of Pharmaceutical Appliances Ltd have complained that the 5
company was formed by the promoters only to defraud the creditors and circumvent
the compliance of legal provisions of the Companies Act, 2013. In this context, they
seek your advice as to the meaning of the corporate veil and when the promoters can
be made personally liable for the debts of the company.
2. S was running prosperous leather (boot and shoe) business. He converted his 5
business into a limited company with himself, his wife, daughter, and four sons as
founding members. S and his two sons became directors. All of them subscribed for
one share each, so the actual cash paid by them was just pound 7. S sold the business
to the newly formed company for pound £ 38782 (a nominal capital of £40,000) and
took 10,000 debenture, £ 20,000 shares and £8,782 in cash. The company went into
liquidation, and a Receiver was appointed by debenture holders. The balance sheet of
the company had assets amounting to £ 6050, liabilities (debenture): £ 10,000 and
ordinary creditors: £ 8000. Decide if the available assets and money are payable to
creditors or S being debenture holders?
3. During the war, all the members of a private company, while in the general meeting, 4
were killed by a bomb. Decide if the company survived.
4. There are cases where company law disregards the principle of corporate personality 6
or the principle that the company is a legal entity distinct from its shareholders or
members. Elucidate.

888 888 0402 support@escholars.in

1