LEGAL ASPECTS OF

BUSINESS END
SEMESTER EXAM
QUESTION 1
1.According to the Section 17(5)(d) in The Indian Contract Act, 1872. Silence on the subject
of fats isn't always deceit. Silence is not fraud unless there is a legal requirement to speak or
if it is equivalent to expression. This rule possesses two abilities. First, obfuscating a portion
of known facts may mislead the claim of the remaining facts, despite the fact that this is
literally true. The declaration is materially inaccurate in this case, and the wilful rejection that
makes it so is fraudulent. Second, commercial usage may impose a need that particular faults
in items sold or the like be disclosed. Failure to mention a problem in this scenario equates to
a declaration that the defect does not exist. So therefore, Rajat and Raj, being traders, enter
upon a contract. Rajat has private information of a change in prices which would affect Raj’s
willingness to proceed with the contract. Rajat is not bound to inform Raj.
2. In this scenario, the student is persuaded by his teacher to sell his automobile for a lower
price than it was purchased for in order to get better grades on the exam. According to section
16 of the Indian Contract Act of 1872, a contract should be created with the free agreement of
the parties, which is not the case in this situation since it is an act of undue influence in which
one of the parties is in a position to control the will of the other by utilising his authority.
Because the instructor and the student have a fiduciary relationship, the student can sue the
teacher because his consent was not free and voidable.
4. As the name of Vijay is found in the register of the company. the contention of the
company is valid. According to the laws a member of the company is any person who has
company's memorandum who is regarded to have consented to become a member of the
company and is registered as a member in its register of members upon its registration. Any
other individual who agrees to become a member of the firm in writing and whose name is
put in the company's membership register. Every individual who owns business stock and
whose name is listed as a beneficial owner in a depository's records.
5.In the Companies Act 2017 Section 2, In Clause (87), In Sub-Clause (II), For the Words
“Total Share Capital” states that:
subsidiary company" or "subsidiary
"In relation to any other company (that is to say the holding company), means a company in
which the holding company—
(i) controls the composition of the Board of Directors or
(ii) exercises or controls more than one-half of the total voting power either at its own or
together with one or more of its subsidiary companies.
Which means that if the holding company exercises or controls more than one-half of the
total voting power on its own or with one or more of its subsidiary companies, the business
will be classified as a subsidiary. As Ericsson Pvt. Ltd and its subsidiary Pentek Pvt. Limited
holds a total of 16000 shares in total, Anron Pvt. Ltd is a subsidiary of Ericsson Pvt. Ltd.

QUESTION 2
1. There are 3 main reasons as to why the corporate veil of a company can be lifted.
They are:
a. Fraud or Improper Conduct– The most prevalent reason for the courts to raise the
corporate veil is when the company's members commit fraud. The goal is to find out
what the members' true interests are. In such instances, the members are unable to
apply the Salomon principle to avoid culpability. 
b. Tax Evasion– The corporate veil is often employed for tax evasion or to avoid paying
any form of tax obligation. Because the legislature will not be able to fix all of the
holes in the law, it is necessary for the judiciary to intervene. In such circumstances,
the courts raise the company's curtain to reveal the company's true condition of
affairs.
c. Company as an Agent– When a corporation acts as an agent for its shareholders, and
the shareholders are held liable for the corporation's actions. In such circumstances,
the court will consider the facts of the case to decide whether or not the corporation is
functioning as an agent for its members. This can be deduced either from the
agreement itself, when it is clearly stated, or from the facts of each instance.
2. Illegal agreements are those agreements in which the aim or consideration is not
enforceable by law and is thus criminal. As a result, unlawful agreements are null and
invalid from the start. The void agreements, on the other hand, are not enforceable by
law, and there is no legal remedy. However, because it is not technically illegal, the
agreement can be carried out. As a result, all illegal agreements are invalid by
definition, but not all void agreements are necessarily illegal.
4. Competition Act 2002 defines cartels as “An association of producers, vendors,
distributors, merchants or service providers who, by agreement, limit, control or attempt
to control the production, distribution, sale or price of or trade in goods or the supply of
services. “
The cartel's basic components are:
Existence of a collaboration or agreement between competitors.
The agreement is between producers, sellers, distributors, traders, or service providers,
implying that the parties are involved in the same or similar trade or service.
The agreement's goal is to limit, regulate, or seek to control the production, distribution,
sale, pricing, or exchange of products and services.
Monopoly is the polar opposite of competition, and it occurs when a group of producers,
rather than competing, band together to create an organisation or cartel. As a result, the
cartels' monopoly is not beneficial to progress. It stifles growth and makes it difficult for
the population's standard of life to increase.
6. Corporate governance is the collection of mechanisms, processes and relations used by
various parties to control and to operate a corporation and Corporate social responsibility
is a form of international private business self-regulation which aims to contribute to
societal goals of a philanthropic, activist, or charitable nature by engaging in or
supporting volunteering or ethically oriented practices. They are considered to be the two
sides of the same coin. The common man and the general public’s faith and confidence in
company executives grows with excellent corporate governance. Legislative processes
were created to safeguard societies against recognised risks and to prevent issues from
arising or recurring. Recent corporate crises have highlighted the link between business
and social responsibility. With an increasing focus on environmental, social, and
governance concerns, as well as corporate social responsibility, firms' obligation and
accountability to their stakeholders is expanding. Corporations are putting greater
pressure on themselves to develop corporate governance best practises in order to
strengthen their interactions with stakeholders. The most compelling reason for
businesses to pay more attention to sustainability is that it increases their potential to
flourish and succeed in the long run.

QUESTION 3
i. When Mr Ali names the minimum price of the bike is when the proposal to Mr
Kabir that the bike is for sale is made. Mr Kabir was inquiring whether or not the
bike was for sale for which he received a proposal for the same which therefore
even thou the initial communication was made by Mr Kabir, Mr Ali is the one
who made the proposal. The acceptance of this proposal would only be complete
when the trade is made. When Mr Ali gives the bike and receives the money from
Mr Kabir for the motor bike and Mr Ali gets the motor bike, only then the
proposal will be completed.
ii. This is not a contract as it is not a legal agreement. A contract is a legally binding
agreement that establishes and controls the rights and obligations of the parties
involved. When a contract fulfils the legal conditions, it is legally enforceable. A
contract usually entails the exchange of products, services, money, or a
commitment to trade any of these. As this situation does not come under these
conditions it cannot be considered a contract.
iii. Mr Ali is completely in his right to sell his bike to anyone else other than Mr
Kabir as Mr Kabir and Mr Ali did not have a legal agreement set in place for sale
of the bike. As the parties did not have a legal agreement or a contract Mr Kabir
cannot sue Mr Ali for breach of contract

QUESTION 5
1. The song ‘Masakali 2.0’ was recreated and composed by Tanishq Bagchi, without the
consent of its original creators – composer Mr. A.R. Rahman and writer Mr. Prasoon
Joshi. Its original version, ‘Masakali’ was a part of the movie ‘Delhi-6’ released in
2009. In the case of original literary works, the singer's rights are guaranteed for 50
years under section 38 of the same statute. The song 'Masakali 2.0' puts the notion of
 originality and its recognition, which is the foundation of Copyright, in jeopardy.
Even though a musical piece is considered to be commissioned or developed under a
contract of service, the composer is recognised as the initial owner of the copyright in
the compositions used in a film, according to the second proviso to section 17 which
was added by the 2012 amendment therefore, legally the record label has no rights
over the song.
2. Due to the fact that T-Series could not have re-created the song based on their
copyright in the sound recording or film that included it without first obtaining the
consent of Mr. A.R Rahman who is the original song's producer and composer, who is
the first owner of copyright in the original 'Masakali' composition. As a result, the
label had no right to remake or permit someone to remake the song 'Masakali' without
his surrendering or licencing his rights, as this is the case and as A R Rahman is the
owner of the song there is legality to the claims of A R Rahman and Prasoon Joshi’s
claim.

QUESTION 7
b. The change is correct. The Registrar of Companies will analyse MGT-14 after
receiving it and, if satisfied, will record the change of course in object clause mostly by
issuing a new certificate of incorporation. The RoC does not effectuate the object clause
amendment until a new certificate of incorporation is issued. It is not legal and invalid
because Object mandatory arbitration clauses are the clauses that define the goal and
scope of activities that a new company can engage in during the course of its existence.
After formation, a new company may amend the object clause in the contract in order to
expand. If a Company so desires, it can change its object clause by adding, deleting,
substituting, modifying, or in any other way.
c. The Registrar of Companies (ROC), as described by Sub-Section 75 of Section 2 of the
Companies Act, 2013, is a Ministry of Corporate Affairs position in charge of regulating
Indian firms in the Industrial and Services Sector. There are now 22 Registrars of
Companies with offices in India's main states. The ROC is responsible for establishing
business ethics in the present paradigm and plays a prominent role in enabling company
culture and is vested with a variety of functions and a wide range of authorities under the
Companies Act of 1956 and Companies Act of 2013. The office of the Registrar of
Companies under the Ministry of Corporate Affairs has been vested with a large number
of duties and is empowered to perform various functions by virtue of the provisions of the
Companies Act, 2013. Following categories of company’s name shall not be removed by
roc:
i. Listed Companies
ii. Delisted Companies due to non-compliance of listing regulations or listing
agreement or any other statutory laws
iii. Vanishing Companies
iv. Companies registered under Section 25 of the Companies Act, 1956 or Section 8
of the Act.
v. Companies which have accepted public deposits which are either outstanding or
the Company is in default in repayment of the same
As the company is a registered company which is listed even after the death of the two
owners of the company the Registrar of companies is not allowed to delete the company
from the register.