ore gars SYMBIOSIS INTERNATIONAL (DEEMED UNIVERSIT (Established under Section 9 of the UGC Act, 1986 ) Re-accredited by NAAG with ‘A’ Grade (3.68/4) Awarded Category —1by UGC. [Seat No CI institute: (0102)SYMBIOSIS LAW SCHOOL, NOIDA rogramme: (010223) BACHELOR OF ARTS AND BACHELOR OF LAWS Batch: Semester: Course: (010224) BACHELOR OF BUSINESS ADMINISTRATION AND BACHELOR OF LAWS 2043-18,2014-19,2015-20,2016-21,2017-22 v Company Law| Course Code: 0102230503,0102240503 Date: 14/11/2019 Maximum Marks: 60 Day: Thursday Time: 200 am - 12:30 pm Instructions: 1) All questions are © Qt. What should be the minimum paid up share capital in case of'a public company und: Part ~I (Objective Type Questions) 2) Each question carries two Marks (Total 20 Marks) er the Companies Act, 2013? (2Marcs) (CO6) @ INR 1 Lakh b. INR 3 Lakhs ©. INR 5 Lakhs 4. Nil Q2, Which of the following company is exempted to add “Ltd” or “Pvt, Led at the end of their name? @ Marks) (CO1) Private company Government company Statutory company Association not for profits peep Q3. Within how many days prospectus or statement in lieu of Prospectus should file with ROC? Q:4. Which doctrine does not apply to acts yoid-ab-initio? a (@ Marks) (CO2) 40 20 30 Boge (2 Marks) (COI) Ula vires Intra vires constructive notice Indoor managementQs. Bese Q6. aore Q7. eore Qs. Qo. Q.10. ‘An association of persons carrying on any business for profits shall be termed as illegal association when the number of persons exceed by_ (2 Marks) (CO3) 10 50 100 20 What is the validity period of information memorandum? (2 Marks) (CO6) 1 year : 2 years 3 years 4 years What is the maximum limit of underwriting commission in case of debentures? (2 Marks) (CO3) 3% 4% 25% 5% ‘What is maximum period for which deposits can be issued? (2 Marks) (CO1) 36 months 24 months 12 months 3 months ‘What is the maximum percentage of total paid up capital in case of buy back of securities allowed during a financial year? (@ Marks) (COI) 25 30 35 40 When a charge become void, the money secured there under becomes repayable with in how many months? (2 Marks) (CO2) 1 2 10 immediatelyPart-II (Subjective Type Questions) Instructions: All questions are compulsory. Qu. Qu. Q2. a) The Registrar of Companies issued a Certificate of Incorporation to XYZ Private Ltd. on January 28, 2018. However, the Certificate of Incorporation was dated as of January 25, 2018. XYZ Private Ltd. made an allotment of shares on January 27, 2018, Shareholders later challenged this allotment as void and asked for the rescission of allotment. XYZ Private Ltd. seeks your advice on whether the said allotment can be declared as void, Kindly advise. (5 Marks) (CO1) b) ABC Ltd, had paid-up share capital of 50,000 shares of which A and B held 25,000 each. Clause 15 of the Articles of Association of ABC Lid. provides that the Board of Directors may, at eny time, in their absolute discretion, refuse to register any transfer of shares. B died and his executor applied to have B's shares registered in his name. The Board of Directors, however, refused to register the transfer relying on Clause 15 of the Articles of Association Advise B's executor whether he can successfully challenge such refusal in court. (5 Marks) (CO7) OR a) A Ltd. has a capital of Rs. 50,00,000 comprising of equity shares and redeemable preference shares worth Rs. 25,00,000 each. The redeemable preference shares are to be redremed on ne afore December 31, 2010. However A td have accumulated up to Rs. 15,00,000. The Board of Directors 20,00,000 from financial institutions (including banks) to improve it working capital needs and redeem the aforementioned preference shares. The Board of Directors seek your advice on whether the redeemable preference shares can be redeemed in the manner contemplated above. Kindly advise. (G Marks) (CO3) b) X was a shareholder of Blue Wheel Pvt. Limited. X died after executing a will under which Z, son of X was to inherit all his properties including the shares held by him. The articles of association of Blue Wheel vested with the Board of Directors absolute discretion in regard to registration of transfer/transmission of shares. In the instant case, the Board of Directors refused to register the transmission of the shares to Z on the ground that Z is an undesirable person and gave no reason as to why it considered Z, to be ‘undesirable’. The Membership of Blue Wheel after inclusion of Z as shareholder would have been 127. Examine whether the refusal to register the transmission of shares by the Board of Directors of the company is correct? (5 Marks) (CO3) ‘The Himalayan Beauty Limited (“Company”), a public unlisted company, was involved exclusively in the manufacturing and sale of trekking gear and equipment. It has a Board of Directors comprising seven directors, and the Managing Director of the Company is Ms. Everest, who has been on the Board since the time when the Company was incorporated in 2005. The Company, of whieh the controlling shareholders is a Mr. Bones, was one of the earliest companies to manufacture such gear in India, and was well placed to take advantage in the growing popularity of adventure sports in the 2000s. The Company grew steadily through the years, Which was largely attributable to the efforts of Ms, Everest, She entered into tie-ups with several trek organizers to ensure a constant demand for the Company's products, and under her command, the Company did really well. Last year however, Thrill Trips Private Limited: (“TPL”), an adventure sports company and one of the Company's important clients, terminated their contract with the Company, for the reason that they were receiving a huge discount from a competitor from whom they could purchase equipment for different adventure sports in bulk. Ms. Everest then, sensed that it might be a feasible idea to consider expanding the business of the Company to other sports as well. The Board however, tumed down the proposal, for it would require significant investment, which the CompanyQ3. Was incapable of making at that stage. Disappointed, Ms, Everest quit the Company, with the intention of setting up a company that would manufacture and supply equipment across the board. She spent the last year finding investors, and early this year, she started business, The ‘Company has since, lost a few clients and employees to Ms, Everest's new company; although Ms. Everest suggests that she did not solicit them, and that they switched loyalties of their own accord. (a) Whether Ms. Everest is in breach of her fiduciary duties in setting up a competing ‘business, and in dealing with clients and employees of the Company (5 Marks) (CO4) (b) Assuming there is a breach of fiduciary duty, whether the controlling shareholder, Mr, Bones can sue Ms. Everest for any losses that either he or the Company has suffered as a result. (SMarks) (COS) OR Eena, Meena and Deeka were shareholders in a company, Kiara Private Limited (“KPL.”) that manufactured solar panels. In 2017, the Government of U.P. had floated a tender for procuring solar panels, for which KPL had submitted a bid. In fact, KPL was even awarded the contract, which was worth nearly INR. 10,00,00,000, but a few months later, it was discovered that the contract had been procured fraudulently. It was found that Mr. A, the ‘Managing Director of KPL had paid INR 1,00,00,000 to the Director, Department of Renewable Energy, from the funds of the company but without the knowledge of the shareholders. As a result, the contract was terminated, and KPL was blacklisted for a period of 10 years. Upset that they were no longer cligible to bid for govemment contracts, Eena, ‘Meena, and Deeka decided to wind-up KPL, and incorporate a new company with their friend. Sheena. This time, they named their company Hans Private Limited (“HPL") and were sure to not have anyone from the management of KPL on the Board of the new company. Each of the shareholders hold 25 percent shares in the new company. In 2019, te Government of U.P. once again, floated a tender to procute solar panels, and HPL. submitted a bid for this, The government however, disqualified the bid on the grounds that this was an attempt to circumvent the order blacklisting KPL. Hassan has filed a writ petition before the High Court of Allahabad, alleging that his right to carry on trade has been violated on account of the arbitrary cancellation of HPL's bid, Decide. (10 Marks) (CO6) a) XYX Company Ltd ("XYZ") at a general meeting of its members passed an ordinary resolution to buy-back 30% of its equity share capital, The Articles of Association of XYZ empower the company to buy-back its shares. XYZ further decides that the payment for the buy-back be made out of the proceeds of the company’s earlier issue of equity shares. Using provisions of the Companies Act, 2013, state the sources from which companies can buy-back their shares. Would XYZ’s proposal in this case be valid? (5 Marks) (CO2) b) “Ut is the duty of those who issue the prospectus to be truthful in all respects” — the aforesaid statement has come to be known as the “golden legacy”. Accordingly, nothing should be stated as a fact which is not so and no fact should be omitted, the existence of which might in any degree affect the nature or quality of the privileges and advantages which the prospectus holds out as inducement to take shares. Discuss the aforesaid concept in light of liability for untrue statement/ misstatement in Prospectus and remedies available to the allottees and remedies against the directors or promoters under Companies Act, 2013. (5 Marks) (COS) oRQ3. QA. Q4. a) Ms, Aaradhya has a brilliant plan of manufacturing portable magnet reading lamps which can be stuck on to the wall. She thinks usual reading lamps are mainstream and a portable ‘magnet reading lamp will solve the issue of fixing lamps permanently on the wall for many. Her friends and family members have also given her a positive feedback. She is looking at a minimum investment of Rs. 50 lakhs in the project. She has investments worth Rs. 20 lakhs and two of her cousins have agreed to invest Rs. 5 lakhs each. Few others who are interested in this venture have also promised to invest, provided this business runs as a corporation and not a partnership firm. She is unsure about the business model and has approached you to know the most suitable form of business to him as wishes to keep the control of the business ‘with him always. (5 Marks) (CO1) b) Advise an individual who wants to incorporate an One Person Company under the Companies Act, 2013 and wishes to know under what circumstanges will such a company have to mandatorily get converted into a private or public company as per the provisions of the Companies Act, 2013. (@ Marks) (CO2) In 2000, a company by the name Medicare Hospitals Private Limited (“Medicare”) was itfeorporated with the following main object: "To carry ion business of owning, acquiring, promoting, establishing, taking on lease, hiring, maintaining, running, managing and ‘supporting hospitals, clinics, nursing homes, laboratories and diagnostic centers for detecting, diagnosing, understanding, curing, ireating and preventing all troubles, diseases and ailments that affect or seem to affect the functioning of the human body and to undertake ‘any business thett is ancillary or incidental to the operation of hospitals. Further, listed under the matters considered necessary in furtherance of the main object of Medicare was: “To acquire by subscription, purchase or otherwise and 10 hold and sell shares, stocks, securities in any company.” The Articles of Association Medicare, while modeled entirely on Table F of the Companies Act, 2013, provided that: “No investment in the shares, stocks, or securities of any company shall be undertaken except with the unanimous consent of all the directors on the Board of the Company." ‘The Board of Medicare wants to purchase shares in a company which owns a chain of twenty- five pharmacies, across Mumbai, (i) Would this purchase of shares be ultra-vires the Memorandum of Association because the objects clause does not specifically authorize investment in pharmacy business? Give reasons for your answer, citing relevant case, (6 Marks) (CO7) (Gi) What is the procedure relating w the alteration of the Articles of Association of a company under the Companies Act, 2013? (5 Marks) (CO6) oR Footcare Pvt. Ltd operates from Noida. The company manufactures shoes and Himesh was appointed as the Managing Director. Under his service contract with Footcare, Himesh contracted not to solicit Footcare’s business within three years of leaving them. Himesh late resigned from Footcare and within a year he and his brother formed a company nearby, Shooz Ltd, which also manufactured shoes. Himesh was appointed as its Sales Director. Footcare has also been negligent and one of its employees, Reshamiya, had a serious accident at work whilst operating a machine. Reshamiya has sued Footcare for compensation. At the same time, Footcare transferred its business to a separate associsted company, Boots Ltd.Footcare is no longer able to pay the compensation to Reshamiya. Reshamiya believes that the ‘business was transferred to Boots to deny his claim for compensation, Advise Footcare on whether: i, ‘There can be a claim against Himesh for starting his own business under the name of Shooz Ltd. (5 Marks) (CO1) ii, Reshamiya might succeed in his claim that Footcare’s business was transferred to defeat his claim for compensation. (5 Marks) (CO1) #