Professional Documents
Culture Documents
Revision
Foundation Course Paper-2:
Business Laws & Business
Correspondence and Reporting
A compendium of subject-wise capsules published in the
monthly journal “The Chartered Accountant Student”
Board of Studies
(Academic)
ICAI
INDEX
Edition of
Paper Page
Subject Students’ Topics
No. No.
Journal
Concepts related to
July 2020, entering of contract under
1-9
August 2020 The Indian Contract Act,
1872
Concepts related to
performance and breach of
January
10-14 contract and special
2021
contract under The Indian
2A Business Laws Contract Act, 1872
July 2021,
The Sale of Goods Act,
15-26 December
1930
2021
The Indian Partnership
27-30 August 2022 Act, 1932 – General Nature
of Partnership
January Limited Liability
31-36
2023 Partnership Act, 2008
September
37-42 General Overview
2021
Sentence Types, Active-
43-48 May 2023 Passive Voice and Direct-
Indirect Speech
Business
Introduction to Basics of
2B Correspondence 49-50 March 2022
Writing
and Reporting 50-51 March 2022 Precis writing
52-53 April 2023 Article Writing
53-54 April 2023 Report Writing
Formal Letters and Official
55-57 April 2023
Communication
BUSINESS LAWS
Paper 2(SECTION A): Business Laws
This capsule on Paper 2-Section A: Business Laws at Foundation, have been dealt with important concepts related to the
formation of the valid contract under the Indian Contract Act, 1872. In this capsule, we have touched upon significant
concepts that are required for making valid contract and the related concepts supported with relevant case laws to have
conceptual understanding of the subject. This chapter is important from examination perspective as its form base for the
understanding of the nature of the contract which constitutes unit 1 of Chapter 1 of the said paper in the Foundation course.
Considering this capsule as summarised version of the unit 1 of chapter 1 will certainly benefit the students to recapitulate
the important points while studying the subject.
Essentials of valid
Offer/proposal
Since section 10 is not complete and exhaustive, so there are certain Omission/Abstinence
others sections which also contains requirements for an agreement
to be enforceable.
Not given by Section 10 but are also considered essentials (4) Classification of Offer
of valid contracts
• Two parties
• Intention to create legal relationship Counter Standing
• Fulfillment of legal formalities General Offer Offer
• Certainty of meaning Offer
• Possibility of performance
Cross
Specific Offer
(1) Meaning of offer/proposal
Offer
As offer is the starting point in the making of an agreement. An offer
is also called as proposal. Thus, for a valid offer, the party making it
must express his willingness 'to do' or 'not to do' something.
1
BUSINESS LAWS
General offer Name of the Facts of the case Decision
offer made to public at large and anyone can accept by performing case laws
the desired act
When he came to know
Special/specific offer of the reward, which
had been announced in
offer made to a specific / ascertained person, & can be accepted his absence, he brought
only by that specified person an action against the
Cross offer defendant to claim this
reward. It was held that
2 parties exchange identical offers in ignorance of each other's since the plaintiff was
offer at the same time. It is not binding ignorant of the offer of
reward, his act of bringing
Counter offer
the lost boy did not
offeree offers to qualified acceptance of the offer subject to amount to the acceptance
modifications and variations in the terms of original offer. Counter- of the offer and therefore
offer amounts to rejection of the original offer he was not entitled to
claim the reward.
Standing / continuing / open offer
An offer of continuous nature which remains open for acceptance Boulton Vs. Boulton had taken Held: Jones is not liable
over a period of time Jones over the business of to pay for the good. It is
one Brocklehurst,
a rule of law that offer
with whom Jones had
Important case laws previous dealings. made to a specific /
Jones sent an order for ascertained person can
Name of the Facts of the case Decision
goods to Brocklehurst, be accepted only by that
case laws
which Boulton supplied specified person.
Carlill Vs. In this famous case, Held, she could recover without informing
Carbolic Carbolic smoke Ball Co. the amount as by using Jones that the business
Smoke Ball advertised in several the smoke balls she had changed hands.
Co. newspapers that a had accepted the offer. When Jones found
reward of £100 would be In terms of Sec. 8 of the out that the goods
given to any person who Indian Contract Act, had not come from
contracted influenza anyone performing the Brocklehurst, he
after using the smoke conditions of the offer refused to pay for
balls produced by the can be considered to them and was sued by
Carbolic Smoke Ball have accepted the offer. Boulton for the price.
Company according Until the general offer is
to printed directions. retracted or withdrawn, (5) Difference between Offer and Invitation to Offer, and
One lady, Mrs. Carlill, it can be accepted by Invitation to Treat
used the smoke balls anyone at any time as it is
as per the directions of a continuing offer. Case laws Facts of the case Decision
company and even then Harvey Vs. In this case, Privy Council Held that the mere
suffered from influenza. Facie briefly explained the statement of the lowest
Lalman Gauri Dutt sent his Held, he was not entitled distinction between an price at which the vendor
Shukla Vs. servant Lalman to trace to the reward, as he offer and an invitation to would sell contained no
Gauri Dutt his missing nephew. He did not know the offer. offer. In the given case, implied contract to sell
then announced that Section 4 of the Indian the plaintiffs through to the person who had
anybody who traced Contract Act states that a telegram asked the enquired about the price.
his nephew would be the communication of defendants two questions
entitled to a certain a proposal is complete namely,
reward. Lalman traced when it comes to the (i) Will you sell us
the boy in ignorance knowledge of the person Bumper Hall Pen? and
of this announcement. to whom it is made. (ii) Telegraph lowest cash
Subsequently when he price.
In Lalman case, the The defendants replied
came to know of the defendant’s nephew
reward, he claimed it. through telegram that the
absconded from home. “lowest price for Bumper
The plaintiff who was Hall Pen is ₤900”. The
defendant’s servant was plaintiffs sent another
sent to search for the telegram stating “we agree
missing boy.
to buy Bumper Hall Pen
After the plaintiff had left at ₤900”. However, the
in search of the boy, the defendants refused to sell
defendant announced the property at the price.
a reward of Rs. 501 to The plaintiffs sued the
anyone who might find defendants contending that
out the boy. The plaintiff they had made an offer to
who was unaware of this sell the property at ₤900
reward, was successful in and therefore they are
searching the boy. bound by the offer.
No term of the non compliance amounting to Acceptance Neale Vs. M offered to sell his land It was held that N
Merret to N for £280. N replied could not enforce his
(7) Acceptance purporting to accept the acceptance because it
offer but enclosed a cheque was not an unqualified
for £ 80 only. He promised one
to pay the balance of £ 200
person to whom Signifies his Proposal is said by monthly installments of
the Proposal is Assent thereto to be Accepted £ 50 each.
made
3
BUSINESS LAWS
Case laws Facts Decision (12) When is communication of acceptance complete?
Brogden vs. Brogden a supplier, sent a Held, that there was As against the Proposer-
Metropolitan draft agreement relating no contract as the
to the supply of coal to the when put in course of transmission to the Proposer
manager had not
Railway Co. manager of railway Co. viz, communicated his As against the Acceptor
Metropolitian railway for acceptance to the
his acceptance. when it comes to the knowledge of the Proposer
The manager wrote the supplier, Brogden.
word “Approved” on the (13) Communication of acceptance by post
same and put the draft
agreement in the drawer As against the Proposer- As against the Acceptor
of the table
Intending to send it to when the letter of when the letter reaches the
the company’s solicitors acceptance is posted proposer
for a formal contract to
be drawn up. By an over
sight the draft agreement (14) Acceptance over telephone or telex or fax
remained in drawer.
Offer is made by instantaneous communication-
(10) Rules for Communication of Offer and Acceptance Contract is completed
For Valid Offer and Acceptance When the Acceptance is The Contract is made at the
• Offer must be communicated to the Offeree received by the Offeror, place where the Acceptance is
• Acceptance must be communicated to the received
Offeror
(15) When revocation of offer and acceptance is complete
(11)When communication of offer is complete?
comes to the knowledge of as against the person • when it is put into a
the person to whom it is made who makes it- course of transmission
Communication as against the person • when it comes to his
of an offer is either by words spoken or to whom it is made- knowledge.
complete written, or it may be inferred
from the conduct of the
parties (16) When a Proposal and Acceptance can be revoked?
Relevant Case laws
Proposal Acceptance
Case laws Facts Decision
may be revoked at may be revoked at
Lilly Plaintiff delivered Held, the terms were any time before the any time before the
White Vs. some clothes to unreasonable and communication of its communication of the
Mannuswamy drycleaner for which Plaintiff was entitled acceptance is complete acceptance is complete
she received a laundry to recover full value as against the proposer as against the acceptor
of the saree from the
receipt containing drycleaner.
a condition that in
case of loss, customer The receipt carries
would be entitled special conditions (17)Modes of revocation of offer by
to claim 15% of the and are to be treated
market price of value as having been duly
communicated to the Lapse of Death or Non
of the article, Plaintiff customer and therein a Notice of specified Insanity fulfilment Counter
lost her new saree. tacit acceptance of these Revoca- or of the of Offer
conditions is implied tion reason- Conditions
by the customer’s parties
able time of Offer
acceptance of the receipt
has done or promises to do (4) Suit by a Third Party on an Agreement (Doctrine of Privity
abstained from does or abstains or abstain from
from doing, or of Contract)
doing, or doing something,
General rule
Such an Act or Abstinence or Promise is called A stranger to a contract cannot sue
Consideration for the Promise
(2) Law relating to Minor’s agreement/ Position of minor (5) Positions of agreements in case of persons of permanently
unsound mind (in case of Idiots)
In case of supply of
No ratification necessaries claim to
on attaining be reimbursed from (6) Positions of agreements in case of Drunken/Intoxicated
majority property of minor person
6
BUSINESS LAWS
(7) Persons disqualified by law (6) Effect of undue influence
contracts by such person are Void. when agreement caused by undue influence-
• contract is voidable at the option of the party
- Alien enemies whose consent was obtained
Statutes • contract may be set aside
disqualify - Foreign ambassadors
certain persons - Convicts
to enter into - Insolvents Relevant Case Law
contract
- Corporations In Kirpa Ram vs. Sami-Ud-din Ad. Khan, a youth of 18 years of
- Etc. age, spend thrift and a drunkard, borrowed Rs. 90,000 on a bond
bearing compound interest at 2% per mensem (p.m.). It was held
by the court that the transaction is unconscionable, the rate of
III. Free Consent interest charged being so exorbitant.
Undue
Influence
Misrepresentation
Fraud can be
committed by- { •
•
•
a party to a contract, or
with his connivance or
by his agent
Consent is said
{
Coercion to be free Mistake • another party thereto or
when it is not Act when done
• his agent, or
caused by with intent
• to induce him to enter
to deceive-
into the contract
8
BUSINESS LAWS
(19) Differences IV. Legality of Object and Consideration
Coercion and Undue influence (1) When there is an unlawful object & unlawful consideration
in an agreement, its effect
Basis of difference Coercion Undue Influence
Nature of action It involves the It involves moral or Consideration or Object of an agreement is unlawful, if-
physical force or mental pressure. forbidden defeats If it is involves immoral
threat. by law provision fraudulent or implies or
Involvement of It involves No such illegal act of any law injury to a opposed
criminal action committing or is committed or a person or to public
threatening to threat is given. property policy
commit any act of another
forbidden by The The The The The
Indian Penal Code Agreement agreement agreement agreement agreement
or detaining or is Void. is void. is void. is void is void.
threatening to detain
property unlawfully. (2) Agreements against Public policy
R e l a t i o n s h i p It is not necessary Some sort of
between parties that there must relationship between Interfering with
Trading with the Course of Brokerage
be some sort the parties is
Enemy Justice Contracts
of relationship absolutely necessary.
between the parties.
Exercised by Coercion need not Undue influence Restraint
whom proceed from the is always exercised Stifling Creating of Legal
promisor nor need it between parties to Prosecution Monopoly Proceedings
be directed against the contract.
the promisor. It
Maintenance Sale/Transfer of
can be used even Restraint of
and Public Offices
by a stranger to the Champerty and Titles. Trade
contract.
Enforceability The contract is Where the consent
voidable at the is induced by undue Restraint Restrained
of Personal of Parental Restraint of
option of the party influence, the Marriage
Liberty Rights
whose consent has contract is either
been obtained by voidable or the
V. Agreements which are expressly declared void
the coercion. court may set aside
or enforce it in a
(1) Law declares following agreement to be either illegal or void
modified form.
Fraud and misrepresentation Agreements by Agreements in Agreements, the
Incompetent Restraint of Legal Meaning of which
Basis of difference Fraud Misrepresentation Parties Proceeding is not Certain
Intention To deceive the other There is no such
party by hiding the intention to deceive Reciprocal
truth. the other party. Agreements made Agreements
Promises to do
under a Mutual in Restraint of
Knowledge of The person making The person making things Legal
Mistake of Fact Trade and also Illegal
truth the suggestion the statement
believes that the believes it to be
statement is untrue. true, although it is Agreements, the Agreements Agreements
not true. Consideration or
made without Contingent on
Object of which
Recission of The injured party The injured party is is Unlawful Consideration Impossible Events
the contract can repudiate the entitled to repudiate
and claim for contract and claim the contract or sue
damages damages. for restitution but Agreements Agreements
in Restraint of in Restraint of Agreements by
cannot claim the way of wager
damages. Trade Marriage
Means to The party using Party can always
discover the the fraudulent act plead that the (2) Consequences of agreement expressly declared void
truth cannot secure or injured party
protect himself had the means to
Agreements
by saying that the discover the truth. expressly
injured party had declared void Void- ab- initio
means to discover / illegal by the
the truth. Contract Act
A contract is said
Legal
to be performed Promisor himself Promisor’s Agent
-Either perform, or
Representatives
when the
parties
to the -Offer to
contract
perform their
promises
10
BUSINESS LAWS
(8) Is time an essence of Contract? (12) Supervening impossibility
makes
Fails to perform
it impossible
refuses, or his part of the By his act
(11) Impossibility existing at the time of contract or Initial to perform his
contract, or
Impossibility obligation
Case Effects
If the impossibility is known to Such an agreement is void-ab- (2) Effects of the Breach of Contract
the parties initio
If unknown to the parties Such an agreement is void on
the ground of mutual mistake The aggrieved party is
If known to the promisor only Such promisor must gets a right to proceed
relieved from performing
against the party at fault
compensate for any loss his obligation, and
which such promisee sustains
through the non performance
of the promise.
The Chartered Accountant Student January 2021 31
11
BUSINESS LAWS
(3) Types of breach of contract
Case laws Facts Decision
Breach of contract Gibbons A business man whose In the case, it was held
Vs. West credit has suffered will that a non-trader cannot
Minister get exemplary damages get heavy damages in
Bank even if he has sustained the like circumstances,
Anticipatory breach Actual breach no pecuniary loss. unless the damages are
alleged and proved as
special damages.
breach occuring
before time fixed Refusal to perform
for performance has promise on the
arrived scheduled date III. Special types of Contract
Contingent
(4) Liability for Damages Quasi-Contracts
Contracts
Ordinary
damages
Rules Relating to
Cases deemed as
Pre-fixed Special
Enforcement of
Quasi -Contracts
damages damages Contingent Contracts
Contingent contract is
Nominal
damages
12
BUSINESS LAWS
(3) Rules regarding Contingent contracts
(a) Rule 1 regarding contingent contracts (e) Rule 5 regarding contingent contracts
Where a contingent contract is made to do or not to do • Such contract can be enforced by law if before the
anything if an uncertain future event happens, expiry of fixed time-
• Such event does not happen ,or
• it cannot be enforced by law unless and until that • It become certain that such event will not happen.
event has happened.
• If the event becomes impossible, such contracts
become void.
(f) Rule 6 regarding contingent contracts
(1) Meaning
Quasi
Contract
(c) Rule 3 regarding contingent contracts
(d) Rule 4 regarding contingent contracts Obligation is a duty and not the promise of a party
• Such an obligation/right to recover arises “where a Trikamdas T’ was traveling without The suit was decreed in
person lawfully does anything for another person, vs. Bombay ticket in a tram car and his favour.
or delivers anything to him not intending to do so Municipal on checking he was asked
gratuitously and such other person enjoys the benefit Corporation to pay R5/- as penalty to
thereof, compound transaction.
• the latter is bound to make compensation to the T filed a suit against the
former in respect of, or to restore, the thing so done corporation for recovery
or delivered. on the ground that it was
extorted from him.
14
BUSINESS LAWS
CA Foundation - Paper 2A - Business Laws
In this capsule, we have summarized the important concepts of the Unit 1 and 2 of the Chapter 2: The Sale of Goods
Act, 1930. From Examination point of view, this chapter comprises of around 12 to 14 marks of the paper. In this
chapter, students are tested with conceptual understanding of the legal provisions, as well application of the important
concepts in the simple practical scenarios. This capsule will help the students to revise and retain essentials of some
of the important definitions and various requirements in the formation of the Contract of Sale.
15
BUSINESS LAWS
Future Goods Contingent Goods 7. Property [Section 2(11)]
[Section 2 (6)]. [Section 6(2)] Property means
• Goods to be • The acquisition of which
manufactured or • by the seller
produced or • depends upon an uncertain ownership in goods/ and not merely
acquired contingency (uncertain event) General Property a special property
• by the seller after making • Ex: P contracts to sell 500
the contract of sale pieces of particular item 8. Price [Section 2(10)]
• Ex: 1000 quintals of provided the ship which is
potatoes to be grown in Mr. bringing them reaches the
A's field. port safely. Money consideration for a sale of goods
Delivery of
Fulfil other an offer to by acceptance
goods: Transfer for a price
Subject matter: essential Buy/sell of such offer
of property i.e
Movable goods elements of a
ownership to
Valid contract
take place
Basis of difference Sale Hire- Purchase for the immediate delivery of the goods or immediate
payment of the price or Both
Time of passing Immediately On payment of last
property instalment or
Position of the Buyer is like that of Position of the hirer
party owner is like that of bailee for the delivery or payment by instalments
till final payment
or
Termination of the buyer cannot The hirer may
contract terminate the terminate the
that the delivery or payment or both shall be
contract and bound contract by returning postponed.
to pay price the goods
Burden of Risk of risk of seller Owner takes no risk
insolvency of the and has right to take
buyer back the goods 3. Mode for entering into contract of Sale
Transfer of title The buyer can pass a Hirer cannot pass
good title to a bona any title even to a A contract of
fide purchaser bonafide purchaser sale may be
made in-
Resale The buyer can Hirer cannot, unless
all installments paid
17
BUSINESS LAWS
2. Nature of contract of sale with respect to perishing goods
Stipulation as to time of Payment and time
Perishing Goods Future Goods of delivery [Section 11]
Where there is a contract for the Stipulation as to the Stipulations as to time
If the future goods time of payment of delivery are usually
sale of specific goods,
are specific and the essence of the
• no knowledge to the seller contract
• at the time when the
• contract was made, goods the destruction are not deemed to be of Delivery of goods
perished or become so damaged of such goods the essence from the terms must be made
• Contract is void amount to of the contract of sale, without delay
supervening unless terms of contract
Where there is an agreement to sell impossibility state otherwise.
specific goods,
• without any fault on the part of
the seller or buyer
• before the risk passes to the buyer
contract Conditions and Warranties with reference
becomes void
• and subsequently the goods to the goods [Section 12]
perishes or become so damaged 1. Meaning -Condition and Warranty
• agreement can be avoided or
becomes void. Condition Warranty
is a stipulation is a stipulation
essential to the main purpose co-lateral to the main purpose
Ascertainment of price [Section 9] of the contract, of the contract,
the breach of which gives rise the breach of which gives rise
fixed by the contract, or
to a right to treat the contract to a claim for damages
as repudiated. but not to a right to reject the
goods and treat the contract
agreed to be fixed in a manner provided by the contract, or
as repudiated.
Ex: P is having two bikes. He agrees to sell both of the bikes to may be either
‘Conditions’ and express or
S at a price to be fixed by the Q. He gives delivery of one bike ‘Warranties’
immediately. Q refuses to fix the price. As such P ask S to return implied
the bike already delivered while S claims for the delivery of the
second bike too. In the given instance, buyer S shall pay reasonable
price to P for the bike already taken. As regards the Second bike,
the contract can be avoided.
19
BUSINESS LAWS
9. Condition as to wholesomeness 10. Implied Warranties-Types
Ex: A supplied F with milk. The milk contained typhoid germs. F’s Warranty as to non- disclosure of dangerous
wife consumed the milk and was infected and died. Held, there was existence of encumbrances nature of goods
a breach of condition as to fitness and A was liable to pay damages.
buyer shall have the goods shall An implied the goods are
and enjoy quiet be free from warranty as to dangerous in
possession of the any charge or quality or fitness nature and
goods. encumbrance for a particular
purpose may
be annexed or the buyer is
attached by the ignorant of the
If the buyer having danger,
in favour of any usage of trade
got possession of
third party not
the goods, is later
declared or known
on disturbed in his the seller must
to the buyer
possession, Ex: Shares warn the buyer
purchased from of the probable
broker expected to danger.
he is entitled to be free from bad
before or at the
sue the seller for deliveries
time the contract If there is a breach
the breach of the
is entered into. of warranty, the
warranty.
seller may be
liable in damages.
Ex: A Purchased
Ex: : S sells a car
a second hand Ex : Lid of
which was given
typewriter which disinfectant
as security by Y
happened to be powder to be
against a loan
stolen opened with care.
Identification of goods Intention of parties Example: X purchased a laptop and asks for home delivery but
that laptop does not have a Windows operating system installed.
The property transfers to X only after shopkeeper installed OS
Property in goods is making the laptop ready for delivery and intimated the buyer
Goods must be ascertained
transferred at the time- about it.
in order to pass the
• when parties intend it to
property in goods to buyer
be transferred
Sale of unascertained or
future goods by description
Delivery to the Carrier Example: X sends furniture to a company by a truck and instructs
the driver not to deliver the furniture to the company until the
payment is made by company to him. The property passes only
Seller delivers the goods when the payment is made.
for the purpose of
to the buyer or carrier or
transmission and
other bailee
Risk Prima Facie passes with Property
the goods are does not reserve the right Until the property therein is transferred to the buyer
appropriated of disposal,
the goods remain at the seller’s risk
PASSING OF PROPERTY
If delivery is delayed by the fault of the seller or the buyer
When he signifies his approval or acceptance
Retains goods without giving notice of rejection the goods remain at the risk of the party in default
(seller or buyer as per the case)
Does something to the goods which is
equivalent to acceptance
The duties and liabilities of the seller or the buyer as bailee of
goods for other party
Example: A sends to B a water motor on approval or return in will not be affected even when risk has passed.
March, 2020. B to return it after trial in August, 2020. The water
motor has not been returned within a reasonable time, and
therefore, A is not bound to accept it and B must pay the price. Example: A bids for an antique painting at a sale by auction.
After the bid, when the auctioneer struck his hammer to signify
acceptance of the bid, he hit the antique which gets damaged. The
4. Reservation of Right of Disposal loss will have to be borne by the seller, because the ownership of
goods has not yet passed from the seller to the buyer.
the seller may by the terms of
the contract or appropriation,
Where there is a
contract for the sale
of specific goods
or where goods reserve the right of disposal of
are subsequently the goods
appropriated to the
contract
until certain conditions are
fulfilled
22
BUSINESS LAWS
(II) Transfer of Title by Non Owners (Section 27-30) Types of Delivery
Symbolic
delivery
Where goods are who does not have
buyer does not Actual Constructive
sold by a person the authority or
acquire a Delivery Delivery
who is not the with the consent of
good title
owner; and the owner
Types of
delivery
Example: P, the hirer of vehicle under a hire purchase agreement, Duties of seller and Buyer
sells them to Q. Q, though a bona fide purchaser, does not acquire
the ownership in the vehicle. At the most he acquires the same
right as that of the hirer. Duty of Duty of
the the
seller buyer to accept
to deliver the
and pay for
goods
NEMO DAT Sale by a Mercantile Agent them
QUOD NON
HABET – No one Sale by one of the joint owners
can give what he
has not got. Sale by a person in possession under voidable Rules regarding Delivery of Goods
contract
Exceptions:
Sale by a person who has already sold goods Delivery to
Part Instalment
but continues in possession thereof carrier/
delivery deliveries
wharfinger
Effect of Estoppel
Rights of an Example: A sold a car to B for R1,00,000 and delivered the same
unpaid Seller to the railways for the purpose of transmission to the buyer. The
railway receipt was taken in the name of B and sent to B. Now A
cannot exercise the right of lien.
Against Goods Against the Buyer
24
BUSINESS LAWS
(iv)
When does the transit come to an end?
When the buyer Buyer obtains Where the carrier If the carrier Where goods Where the part Where the
or other bailee delivery before or other bailee wrongfully are delivered delivery of the goods are
obtains delivery. the arrival acknowledges to the refuses to to the carrier goods has been delivered to a
of goods at buyer or his agent that deliver the hired by the made to the ship chartered
destination he holds the goods as goods to the buyer buyer, the transit by the buyer,
soon as the goods are buyer. will come to the transit
loaded on the ship, an end for the comes to an
unless the seller has remaining goods end.
reserved the right of which are yet
disposal of the goods. in the course of
transmission.
(vi)
Fails to deliver the goods at the time or in manner prescribed
Exceptions When the seller has assented to the sale,
where unpaid mortgage or other disposition of the goods made
seller’s right by the buyer
of lien and Breach of contract by seller, where he-
stoppage in When a document of title to goods has been
transit are transferred to the buyer and the buyer transfers
defeated the documents to a person who has bought goods
in good faith and for value Repudiates the contract
3. Right of re-sale
Damages for
non-delivery
Where an unpaid
Where he gives seller who has
Where the
notice to the buyer exercised his right Suit for specific
goods are of a
of his intention to of lien or stoppage performance
perishable nature
re-sell the goods in transit resells
the goods
Rights of Suit for breach
buyer of warranty
A re-sale by the
seller where a Where the
right of re-sale property in goods Repudiation of
is expressly has not passed to contract before
reserved in a the buyer due date
contract of sale
Suit for
interest
26
BUSINESS LAWS
CA foundation - Paper 2A - Business Laws
This capsule on Paper 2A: Business Laws at Foundation level covers the concepts of Unit 1 of the Indian Partnership
Act, 1932 which is Chapter 3 of this paper. It covers significant concepts explained in a graspable manner for rational
understanding of legal provisions. This will help the student to understand and retain the important aspects of the legal
provisions. This capsule in fact, is in short notes which aids to revise the subject in the examination condition and can be
referred a day before examination. This is relevant for the November 2022 examination.
individually 'Partners’
Persons who
have entered into 'a firm'
collectively
partnership with one
another are called
2. Elements of Partnership
27
BUSINESS LAWS
3. True Test of Partnership Basis of Partnership Joint Stock Company
difference
Registration For a partnership, firm Company is created
registration is not com- by registration under
agreement pulsory. Companies Act, 2013.
between all Winding up A partnership may be A Company is wind up
the persons dissolved by any part- by NCLT or its name is
concerned ner at any time if all the struck off by the ROC.
partners agree.
Number of Number of partners: Private company:
Existence of membership maximum-100 (As minimum- 2, maxi-
partnership, when per Section 464 of the mum- 200
Companies Act, 2013)
Present limit is 50 Public Company: min-
[As per Companies imum- 7, maximum-
share the profits (Miscellaneous) Rules, No limit
of business 2014]
One person compa-
ny: 1
Duration of Firm does not have Company has perpetual
business was existence perpetual succession. succession.
carried on by all
or any of them II. Partnership Vs Club
5. Kinds of Partnership
Partnership
Particular General
Partnership at will Partnership for a fixed period
Partnership Partnership
organised for
no fixed period no provision partnership
comes to an end any particular constituted with
has been agreed made as to the created for a
on the expiry of adventure or respect to the
upon for the determination of particular period
the fixed period undertaking the business in general
duration; and the partnership. of time
partnership
6. Types of Partners
Types of Partners
29
BUSINESS LAWS
Active or
Sleeping or
Actual or Nominal Partner in Incoming Outgoing Partner by
Dormant
Ostensible Partner profits only partner partner holding out
Partner
partner
When a person
Lend his represent
admitted as
name to the A partner himself, or
Entitled to a partner
firm who leaves
share the into an
a firm in
become a profits only already
a partner by which the
partner by existing Knowingly
agreement, Without rest of the
agreement, firm with permits
and having any partners
and the consent himself,
real interest continue
of all the
in firm to carry on
existing
business. to be
partners.
represented as
Not entitled Not liable a partner in a
to share the for the firm (when in
profits losses fact he is not)
remains he is liable,
actively does not Does not take Not liable liable to like a partner
participates actively take part in the for any third parties in the firm
in the part in the conduct of the act of the for all acts
conduct conduct business Liable to firm done of the firm
to anyone
of the of the the third before his until public
who on the
partnership partnership parties for admission as notice is
Liable to faith of such
business all acts of a partner. given of his
third parties representation
the profits retirement.
for all acts has given
only credit to the
of the firm
firm.
LLP itself will be liable for the full extent of its assets
formed,
Foreign
Liability of the partners will be limited LLP Outside
incorporated
means or India
LLP which establishes
a place of business
2. Important Definitions registered within India.
(i) Body Corporate [Section 2(d)]
• a corporation sole;
• a co-operative society
registered under any law for the
time being in force; and (vi) LLP Agreement [Section 2(o)]:
• any other body corporate (not
but does not being a company as defined in
include between the partners which determines the
clause (20) of section 2 of the of the LLP; or mutual rights and duties
Companies Act, 2013 or a LLP of the partners and
as defined in this Act), which Any
the Central Government may, written
by notification in the Official agreement
Gazette, specify in this behalf.
between the LLP their rights and duties
and its partners in relation to that LLP
(ii) Business [Section 2(e)]
31
business lAws
(viii) Small Limited Liability Partnership [Section 2(ta)] 5. Minimum number of partners (Section 6)
(i)
the contribution of which, does not exceed
`25 Lacs or such higher amount, not exceeding
`5 Crore, as may be prescribed; and Every LLP shall have at least two
partners
Small LLP
means
(ii)
the turnover of which, as per the person,
which meets such the Statement of Accounts and the LLP who is the only
other requirements and Solvency for the carries on partner of the LLP
If at any time during the time
as may be prescribed, immediately preceding F/Y, the number of business for
and fulfils such terms does not exceed `40 Lacs more than 6 shall be liable
partners of a personally for
and conditions as or such higher amount, not LLP is reduced months while
may be prescribed. exceeding `50 Crore, as may the number is the obligations
below 2 of the LLP incurred
be prescribed; or so reduced,
during that
period.
3. N
on-applicability of the Indian Partnership Act, 6. Designated partners (Section 7)
1932
Save as otherwise provided,
the provisions of the Indian
Partnership Act, 1932
Designated partners • in case of LLP,
(Section 7) • where all the partners are
• at least two bodies corporate or
• who are individuals • in which one or more
• at least one of them shall partners are individuals
be a resident in India. and bodies corporate,
shall not apply to a LLP.
• Resident in India: A • at least two individuals
person who has stayed in who are partners of such
India for a period of not LLP or
4. Partners (Section 5) less than 120 days during • nominees of such bodies
the F/Y. corporate
• shall act as designated
Who can be a partner partners.
in LLP?
7. Characteristic of LLP
Any Individual; or Body Corporate
Minimum
he is an undischarged Management and Business for
insolvent; or Maximum Investigation
of Business number of Profit Only
Partners
he has applied to be
adjudicated as an insolvent
and his application is
pending Compromise Conversion E-Filing of Foreign
or
Arrangement into LLP Documents LLPs
easy to form
The certificate issued shall be signed by the Registrar
and authenticated by his official seal.
33
business lAws
5. Name (Section 15) 2. Cessation of partnership interest (Section 24)
(i)
A person shall
cease to be a
partner of a LLP—
6. Reservation of name (Section 16)
if he has
A person may apply in applied to be if he is declared
such form and manner and adjudged as to be of
accompanied by such fee • name of a proposed LLP; or unsound mind
an insolvent
as may be prescribed to the • name to which a LLP proposes or declared as by a competent
Registrar for the reservation to change its name. an insolvent. court; or
of a name set out in the
application as—
(iii)
(ii)
where a person becomes where there is any change in the
or ceases to be a partner, name or address of a partner, such
Every LLP in such
shall- form statement
be signed
35
business lAws
(iii)
As you would know, the syllabus has been divided into 4 Parts. The table below indicates the relevant details
S.No Part Name Chapters Covered Weight-Age in marks Skill level*
1. Part-I Communication 1 5-6 Level-I
2. Part-II Sentence Types and Vocabulary 2,3 9-10 Level-II
3. Part-III Comprehension and Note Making 4,5 10 Level-II
4. Part-IV Developing Writing Skills 6 to13 15 Level-II
Level-I: Knowledge and Comprehension comprehension or expression.Students can ask themselves simple
Level-II: Application definitions, pointers, examples while studying the chapter to reinforce
Each Part elucidates one of the significant aspects of Business the concept.
Correspondence.
Part-II Sentence Types and Vocabulary (Word Power)
Part-I Communication Overview
Overview: Sentences and Vocabulary are the basic building blocks of all formats
Communication forms the basis of any interaction. It is the process and language constructs. While sentence construction determines
of exchange of ideas, thoughts and opinions through a verbal or and enhances the coherence,clarity and progression in any piece of
non-verbal medium, between two or more people intending to writing; vocabulary lends a meaning, describes its connotation with
communicate or correspond with each other or in a group. precision at the same time enriching the language.
Chapter-1 broadly discusses the essential aspects of the process Chapter 2 Sentence Types comprises the basic sentence structure,
of communication, its types, mediums, characteristics of effective subject, predicate, dependent and independent clauses and types of
communication and barriers. sentences: simple, compound, complex and complex-compound,
Types of Questions subject-verb agreement, types of speech: direct indirect; active-
The questions that can be asked from this chapter can be both direct passive voice.
and indirect in nature. Types of Questions
• Direct questions can be from any topic/concept as mentioned All questions carry one mark, include:
above. • Rewrite a sentence from direct to indirect speech and vice versa
What is network in communication? (1 Mark) • Rewrite a sentence from active to passive voice and vice versa
Define non-verbal communication. What are its various • Identify the type of sentence (compound/complex/compound-
types? (2 Marks) complex)
• Indirect questions check the student’s level of understanding of the
How to Prepare (Tips and Cues)
concept. These can be in the form of statements where comments
You are required to:
or brief explanations are sought on these. Student is expected to
• Develop a habit of reading newspaper articles on myriad themes
answer with appropriate justification or supporting statement or
and subjects, fictional content or reviews.
argument. For example:
• They can try to identify different sentence structures, dependent
Specify the kind of a formal business setting where ‘Star
and independent clauses and types to observe the writing style
Communication Network’ cannot be applied. (1 Mark)
used to state/describe ideas, opinions and suggestions.
Body language can sometimes be deceptive. Comment.
• Comprehend the rules to convert a sentence from direct to indirect
(2 Marks)
speech and vice versa
Physical barriers are a result of our surroundings. Discuss.
• Comprehend the rules to convert a sentence from active to passive
(2 Marks)
voice and vice versa
NOTE: The questions above have been taken from past year • Practise extensively to convert sentences.
question papers. Answers are available as part of Suggested These will not only help to understand the usage/application of the
Answers. various sentence types but also enable you to hone your verbal and
Both the type of questions can be for 1 or 2 marks each. written expression during group discussions and presentations as well
One mark questions should be answered very precisely with clarity. as answering questions during the examination.
Two mark questions may include Chapter-3 Vocabulary
• brief description of the topic/concept covering major points with Includes jargon words/phrases, synonyms-antonyms, roots of words,
examples/illustrations, prefix-suffix, phrasal words, collocations and idioms.
• comments with apt reason/argument/justification
Types of Questions
All questions carry one mark, include:
How to Prepare (Tips and Cues)
• MCQs based on synonyms, antonyms, idioms and collocations.
You are advised to read, comprehend and memorize definitions,
• MCQs as fill ups based on phrasal verbs
concepts and nuances of each topic. Understanding the concepts
is essential to be able to make out what is being asked as questions How to Prepare (Tips and Cues)
are sometimes paraphrased in a manner to test the examinee’s Building a good vocabulary requires regular reading to learn new
37
business correspondence and reporting
words. It can be enhanced gradually by: earlier. Record the answers.
• Judiciously following a daily habit of learning at least 5 new • Figure out the central idea or the theme of the given passage. This
words with their meanings, both in English and Hindi or in the has to be a noun i.e. a person, place, idea, or a thing. Mostly, the
vernacular/ native language. main idea of a passage is stated in the first sentence of the first
• Carrying pocket dictionaries (English to English and English to paragraph. Sometimes it is mentioned at the end of the paragraph
Hindi/native language) always and rarely, anywhere else in the paragraph. In cases where the
• Noting at least one synonym and antonym for each of these words passage is taken from middle or end of a larger text, the central
to understand how these words could be used interchangeably. idea may not be stated at all, but simply implied.
• Identifying words used in colloquial English or frequently used • Read the opening and closing statement of each paragraph.
words in different types and styles of conversations such as debates, • Differentiate between the relevant and irrelevant information in
interviews, lectures, formal speech/address etc. the passage.
• Inculcating the habit of noting down unfamiliar/new words • Mark keywords, these can be subjects or entities (nouns), about
encountered while reading books, studying, attempting questions which something is described, procedures(action verbs) explained,
from exercises or watching any audio/video content. conjunctions between clauses, events/incidents narrated.
• Using these words extensively in oral and written communications
for retention. These may be:
• Preparing a personalized lexicon for ready reference. Reason words – because, due to, owing to, in view of, reason being
These activities/exercises would help to remember the precise Cause-and-effect words – thus, as a result, therefore, leading to,
meaning of the word, its origin, different connotations thereby, culminating into
providing more clarity on the usage with respect to the context. Time words – meanwhile, before, after, at the same time,
simultaneously
Part-III Comprehension passages and Note Making Contrast words – contrary, contrarily, in contrast, conversely,
Chapter-4 Comprehension Passages Unlike, opposite to
Addition words – also, in addition to, As well as, as well
Overview Emphasis words – note, more/most importantly, remember,
Comprehension passages are an integral part of any language moreover
curriculum and most competitive/language exams. Reading without
understanding is inconsequential, as it does nothing beyond • Identify logical sequence of events and supporting details across
phonetics. The exercise aims at enhancing vital language skills such the entire passage describing the central theme.
as Reading, Writing, Listening and Speaking by enabling you to • Mark specific words and phrases. They help to understand the
understand whatever is written in terms of its context and connotation relationship between the ideas in a paragraph or paragraphs.
thus helping you to make out ideas, thoughts, opinions, suggestions • Note the context and sentence structure for clues in case of
from plane words. It also hones your analytical skills. The passages vocabulary based questions specifically, if the answer is not known.
in questions can have academic or general content and style and may • Identify logical sequence of events and supporting details across
include topics from a variety of fields including arts, sciences, social the entire passage describing the central theme.
sciences, etc. You may or may not be familiar to the topic. However, • Read through the passage and identify statements, arguments
an underlying assumption is that the passage is exhaustive and the and inferences or conclusions.
answers to the questions can be retrieved /derived from within the
passage only.
The chapter describes strategies for attempting these passages in a Chapter 5 Note Making
stepwise manner covering: Overview
• Enhancing reading skills by improving reading speed Note Making is significant to learning, revision and retention. It is
• Developing higher order thinking skills through Bloom’s Taxonomy an essential skill to be developed so as to prepare skimmed and
to improve comprehension skills. summarized subject material for revision. Notes essentially comprise
Types of Questions important points, numerous categories and different aspects of the
Part-III is important because there is a compulsory question from subject/entity/idea succinctly without omitting the vital details. As a
the section having two parts with one question each based on student, it is highly relevant for you, as you are required to retain and
Comprehension passage and Note Making carrying 5 marks each. recall voluminous subject contents during examinations and in other
In Comprehension Passages, there may be 4 to 5 questions (for 1 or 2 academic pursuits and even later in your profession while making
marks) based on a given text/passage/excerpt that primarily include: speeches and presentations.
• Multiple Choice Questions The chapter enables students to:
• Subjective questions to be answered in 1-2 sentences • Prepare extensive notes in a structured manner spanning through
These can be: the text without skipping any detail complete with indentation and
Main idea questions:Test the understanding of the whole passage abbreviations.
rather than the individual paragraphs/sections of the passage. • Write summary comprising pertinent details.
Specific detail questions: Based on the facts/details/events presented It highlights the significance of the topic for students and elucidates
in the passage. a step wise process to prepare notes for a given text material in a
Inference questions: Ask to draw a logical conclusion from what is sequential manner comprising:
said in the passage. • Strategies of effective Note Making
Vocabulary based questions: Ask the meaning of a word or phrase • Difference between Note Making and Note Taking
within the context of the passage. • Linear Note Making
• Steps for Linear Note Making
How to Prepare (Tips and Cues)
Format
After a cursory reading of the passage and the questions, try to
Indentation
comprehend the passage verbatim. Thereafter, you must attempt to:
Abbreviations/Acronyms
• Find /locate/identify same/similar/associative words from the
question in the passage. Types of Questions
• Ask questions like What, When, Where, How and seek answers in Question in Note Making has 2 parts
the passage about the keywords, subjects or procedures identified • To prepare Notes
39
business correspondence and reporting
• Paragraph-2: These are reminders, formal communications (One to many) to be
Narrate the event in a chronological manner, stating minute yet communicated amongst a limited target audience of a particular office
significant details. departments/staff members of an institution or a specific group of
List down the programmes/activities entailed and brief members of a club or organisation, informing/apprising them about
description of each of them / Causes of the incident, a specific decision.
State relevant facts/figures; include / description by eye Format
witnesses/ audience feedback. Name of the organization/institution/club
• Concluding Paragraph-3: Inter Departmental Memo
Future perspectives, plans; important implications, major Date:
repercussions; concluding remarks/comments. To: Employees of a Department/ Teachers of a class or department/
Senior Members of a club
(D) Chapter-10 Formal Letters and Official Communication
From: Name with Designation and Department
(i) Letter
Subject: Objective clearly stated such as: Purchase/Issuance of
Format with tips equipment such as Laptops Mobile Phones/ Tablets; Suspension/
Sender’s Address Dismissal of Mr. X;
Date: • Paragraph-1
Addressee’s Address Information/Decision with stringent norms/penal action if
Salutation required, clearly stated.
Subject: A one line statement crisply citing the purpose of the letter
(E) Writing Formal E-Mails: These are most commonly used means
that catches the attention of the recipient and makes the intent aptly
of instant one to one OR one to many communication. E-mails are
clear.
used/exchanged to share information, issue instructions, demand
• Introduction (Paragraph-1)
action, elicit response, request details or any other purpose where
Briefly mention the reason/objective for writing in 2-3
some interaction is needed.
sentences.
• Main Body (Paragraph-2) Format
Pertinent details about the subject matter and key points to be To: E-mail address (es) of the recipient(s).
conveyed in 3-4 sentences. . Cc: Copy to: E-Mail addresses of the other stakeholders concerned
Include Item/cheque/order/complaint number; with the communication
Product/Order/Cheque/Complaint specifications or any other Subject: Purpose of sending the mail clearly stated such as: Payment
supporting document to a vendor for bill number xxx; Confirmation of Order Number xxx;
In case of a complaint/request for replacement, specify the Status of application for registration to CA Foundation/Intermediate/
person in-charge /entity who will visit to address the issue. Final etc.
• Concluding Paragraph-3 • Main Body
Re-iterate the objective; Salutations: Dear/Respected Sir/Madam
State appropriate action to be taken(if, any) by the recipient; • Paragraph-1
Expected timeline/(timely delivery, quality, specific Brief description in 1-2 sentences, about the purpose of the
requirements). mail with reference to the subject.
Essential terms and conditions to be adhered to • Paragraph-2
Close the letter on a positive note, hoping for a favourable Pertinent details including recent correspondence such as
response within the designated time period. policy decision, data gathered about the issue, any other
• Complimentary Close: Warm Regards/Thanking You/Yours truly/ information
Yours sincerely Specific action expected from the recipient. Clear and concise
• Sender’s Name & Designation instructions should be given.
Enclose necessary annexures/ attachments (if, required)
(D)(ii) Official Communication: Circulars • Paragraph-3
These are formal communications (One to many) to be propagated Express hope for a favourable response from the recipient
amongst a large target audience such as office employees, students in within the stipulated time period.
an institution or members of a club/consortium/organization • Complimentary Closure: Regards/Warm or Best Regards
Format Name and designation of the sender
Circular No. xxxxx Date: Telephone Number: Landline, Mobile (optional)
Title in 2-3 words : Office Transport Rules/
Working Hours;School Vacations/ Trip; (F) Resume Writing
Club timings/rules; Party Meetings etc. • Chronological Resume: Resume is a formal document that
comprises complete information about the antecedents of an
For all employees/students/members, incumbent including personal, academic and training(Information
• Paragraph-1 Technology & Soft skills) related details to be presented to the
Objective of the communication should be clearly stated prospective employer in accordance with a specific post/profile in
unambiguously, with relevant details. a specific chronological sequence. This format is most commonly
• Paragraph-2 used by students who intend to apply for formal training
If any action or response is requested, specify the name of programmes as part of professional courses such as article-ship as
the employee/teacher/member with complete details such as: part of the Chartered Accountancy Course.
designation, department, official E-mail, telephone number Format (Chronological Resume)
etc. • Name and Contact Details
Name of the Person (Optional) • Career Objective
Designation with Department (Mandatory) • Academic achievements/antecedents in a chronological sequence
• Co-curricular Achievements
(D)(iii) Official Communication: Memos OR Memorandums • Previous trainings completed / conducted
The Chartered Accountant Student September 2021 33
40
business correspondence and reporting
• Technical/soft skills highlight the reason for applying, strengths and requisite skill set vis
• Interests/Hobbies (optional) a vis the position so as to evoke employer’s interest in the applicant /
• Personal Details incumbent.
• Declaration about the details mentioned in the resume document Format
being true. Sender’s Address
• Date: Name and Signature
Date:
(F)(ii) Functional Resume: Designation/Name of the Addressee:
This emphasises your skills and achievements. Previous experience is Address:
of little importance. The format is ideal for professionals who intend Salutation:
to join their respective profession after a gap/sabbatical or those who Subject:
have numerous gaps in their career due to whatever reasons. • Paragraph-1
Format Introduction with name and position against which applied;
• Name and Contact Details mention the source of information
• Career Objective • Paragraph-2
• Skills Explain the incumbent’s interest in the job profile
• Technical Training/s Highlight relevant skills and experience most suited for the job
• Achievements profile.
• Experience Make specific associations between capabilities and job
• Academic details requirements as mentioned in the job description.
• Personal details Project the skills and experience to make the incumbent most
• Declaration about the details mentioned in the resume document suitable for the job.
being true. Exhibit awareness about the organisation’s affairs.
• Date: Name and Signature • Concluding Paragraph-3
Hope for a favourable response
(F)(iii) Combination Resume: Ask for follow up details and tentative dates for the subsequent
This presents a combination of the incumbent’s skills along with interview/interaction.
professional and academic antecedents. This format is used to • Complimentary Closure
highlight past employment history and specific skill-sets suitable for Yours Sincerely/Thanks & Regards/Best Regards/Warm
a given job profile while applying for the same. It is written in reverse Regards
chronological sequence with the recent job profile coming first and Signature
so on. (Name)
Format
• Name and Contact Details (G) Meetings: It can be defined as an assembly of individuals in a
• Career Objective formal environment such as a corporate set-up to deliberate/debate
• Summary of experience gained upon certain issues/problems in order to conclude matters, in most
• Experience details in reverse chronological sequence cases take decisions. Meetings are mostly preordained, to be held at a
Name of the Organisation/Company fixed time, date and venue with a fixed agenda entailing issues/items
Position/Designation held to be discussed.
Responsibilities Agenda: It is prepared in advance, with items (including requisite
Appreciation/Promotions/Rewards if, any annexures) contributed by or prepared with the consent of some of
• Technical/soft skills the key participants. Once prepared, the draft Agenda is circulated/
• Academic achievements/antecedents in a chronological sequence propagated amongst the participants/attendees. The Agenda defines/
• Co-curricular Achievements determines and ensures:
• Previous trainings conducted • Objective of a meeting
• Personal Details • Issues/topics to be discussed
• Declaration about the details mentioned in the resume document • Specific time slot allocated to each speaker
being true. • Sequence in which the issues will be taken up during the meeting.
• Date: Name and Signature • Meeting is focused and speakers do not deviate from the issues.
(F)(iv) Cover Letter: It is a formal letter to express interest for a (G)(i) Tabular Agenda
specific job profile/position advertised by an organization. It must Format
41
business correspondence and reporting
(G)(ii) Minutes of a Meeting: These entail comments/opinions/ (G)(iii) Action Taken Report: Detailed Report to be submitted by
suggestions put forth by each of the speaker/participant on a an official or team on the ground work done/action taken arising out
particular item/issue and the subsequent decision taken, stated of the discussions held during a meeting. It is important to gauge the
unambiguously in a sequential manner. These are documented and progress on the respective item/issue discussed during the previous
duly filed/maintained as a compilation for future reference. meeting.
Format Format
Date: Action Taken Report nth Meeting of Department Heads
XYZ Ltd.
Time:
As per the meeting held on date: , at : venue; the following have been
Venue:
reported:
Meeting started in time • Marketing team compiled the suggestions and tendering process
Mr. X, Director Operations (Convenor) gave an Introduction initiated the tendering process Annexure-I
Mr. Y, the Product Head explained the new product and its salient • The HR team prepared the modalities for the recruitment process.
features. Detailed report submitted as Annexure-II
Mr.Z , the Marketing Head gave a detailed presentation about the Undersigned
marketing strategy for various media. The details have been captured Director, Operations (Convenor)
in Annexure-A. Suggestions were sought from the members.
Individual reports to be submitted by (specified dates) Dos and Don’ts
Mr.A the Sales Head along with a team member explained the sales • Do practise questions in Part-III and Part-IV from Revision Test
strategy in upcoming as well as existing markets. Details are provided Papers (RTPs), previous year question papers and Mock Test
in Annexure-B. Suggested to recruit more staff to scale up the sales Papers (MTPs).
operations. • Do write complete words, do not use abbreviations unless required
Mr. B the HR Head, proposed for a separate meeting to be held within (in Note Making)
a week’s time to discuss the modalities of the recruitment process. • Do use different types(Simple, Compound and Complex) of
Mr. C the Managing Director declared the house open for suggestions sentences((Simple, Compound and Complex); Direct/Indirect;
and thanked the participants. Active /Passive) to highlight your writing skills, specifically while
attempting questions form Part-IV
Concluding Remarks:
• Do not exceed the word limit ( 250-300 words) and time limit (15-
Proposal for fresh recruitments
18 min each) specifically for writing exercises (Part-IV).
Marketing Team to collate the suggestions from participants and • Do not use unfamiliar words.
prepare a detailed report. • Do not write overtly long sentences with multiple clauses.
Marketing Team to initiate the tendering process to identify media • Do not repeat the same point to increase the length of the answer
partners to advertise the new product. • Do not repeat a word in an answer; use synonyms to highlight your
Action Taken Report to be submitted by the Marketing and Sales vocabulary.
Team by (specified date) • Revise your answers and if time permits, edit it.
Phrase Radhika is a
She is playing Billy is a
famous
Examples: in the park. foolish cat.
designer
Phrases Complements
• group of words • word or word group
that doesn’t make that completes the Interrogative Sentence Exclamatory Sentence
complete sense meaning
• Ask a question and ends • Expresses strong
with question mark (?) feeling and ends with
Types of Verbs • Usually starts with exclamatory mark (!)
Finite Verbs question words followed
by a verb
• Changes according to the number and tense. For e.g., is, am,
are, do, does, has, have, eat, eats, etc. e.g.: Is she riding a bicycle? e.g. What a beautiful
Non-Finite Verbs bicycle!
• Does not change according to the person, number or tense. Types of Sentences according to its structure
For e.g. to dance. There are three kinds of non infinite verbs:
Infinitive – Base form of verb used generally like a noun Simple Sentence Compound Sentence
Participle (Past and Present) – Form of verb that has • Contains subject and • Has two independent
nature of both verb and an adjective. verb, and expresses clauses that are joined by
Gerunds – Form of verb that ends with "-ing" and acts as
single complete thought. a conjunction (for, and, or,
but, yet etc.)
a noun.
Auxiliary Verbs e.g. The baby cried for food. e.g. They spoke to him in
• Helping verb Spanish, but he responded in
English.
• Form of verbs is/am/are/has/have/had, etc. used with
ordinary verbs to make tenses, passive forms, questions and
negatives. Complex Sentence Compound-Complex
Sentence
Modals
• An independent clause • Has two independent
• Type of auxiliary (helping) verb that is used to express: ability,
joined by one or more clauses and at least one
possibility, permission or obligation.
dependent clauses. dependent clause.
• Can, may, might, must, could, will, would, shall, should are 9 • Joined by a subordinator
core modals. (as, because, since, after,
Transitive verbs although, when) or
• Performs its action on an object. relative pronoun (who,
• Have direct objects , which means someone or something that, which)
receives the action of the verb. e.g.: After eating lunch at e.g.: The man believed in the
Intransitive Verbs the cheesecake factory, they system, and he knew that
Opposite of transitive verb -doesn’t need an object to complete went to the gym to exercise. justice would prevail after
its meaning / express a state or being. the murderer was sent to jail.
44
BUSINESS CORRESPONDENCE AND REPORTING
Subject- Verb Agreement ACTIVE PASSIVE VOICE
Subject-Verb agreement is the correspondence of a verb with its “Voice” refers to the connection between the subject and the
subject in person. object of a sentence, which is linked through a verb.
Some of the common rules of subject verb agreement Two types of Voice
Active Voice
Subject and verb must agree in number. • Eg: Tom kicked Passive Voice
the ball. • Eg: The ball was kicked
Subordinate clauses that come between the subject by Tom.
and verb do not affect their agreement.
Prepositional phrases between subject and verb Active Voice Passive Voice
usually do not affect the agreement.
Meaning is clear and direct. Meaning is indirect and
When sentence start with ‘there’ or ‘here’, the
subject will always be placed after the verb. ambigious.
Subject does not always come before verbs in Receiver of action is Receiver of the action is
questions preceded by the verb. followed by the verb.
If two subjects are joined by ‘and’, they typically Doer of the action is Doer of action is preceded by
require a plural verb form. followed by the verb. the verb.
The verb is singular if the two subjects seperated by Subject of the sentence is Action is done on/upon the
‘and’ refer to the same person or thing as a whole. doing the action. subject
Tenses
Grammar tenses refer to the state of the verb. The state or tense
of the verb explains the time of the action. Impact
Tense
Future Tense Present Tense Past Tense Active Voice Passive Voice
describes about describes about describes about
things that are yet things happening things that have
to happen. right now or are already happened
continous. Have a strong, direct and Emphasise on action
clear tone rather than actor
Types of Tenses with the help of examples Use for clarity, Describe the condition
conciseness where actor is unknown
Tense Past Present Future
Simple I helped my I help my I will help my
Use to convey message
neighbour neighbour neighbour Create authorative tone
effectively
yesterday. every day. tomorrow.
Perfect I had helped I have helped I will have
my neighbour my neighbour helped my Used in newspaper
clean his attic too much this neighbour a headlines.
before I fixed week. hundred times
his car. by the end of Basic rules to change from Active to Passive Voice
the month. The rules are explained with the help of examples
Continuous I was helping I am helping I will be helping 1. Change of subject and object
my neighbour my neighbour my neighbour
when he while he fixes next month Active voice : • Monkeys adore bananas.
brought me up his house. when he moves. ‘subject + verb • The cashier counted the money.
iced tea. +object’ • The dog chased the squirrel.
Perfect I had been I have been I will have
continuous helping my helping my been helping Passive Voice:
neighbour for neighbour my neighbour Subject + form of • Bananas are adored by monkeys.
a year before since I moved for a year next ‘be’ + past participle • The money was counted by the
he finally in. month. of verb + by + object cashier.
thanked me. • The squirrel was chased by the dog.
Tense Active Voice Passive Voice In case of Active Voice Passive Voice
Simple Present Julia eats the The chocolate is eaten Is/am/are Is she cooking the Is the food being cooked
chocolate. by Julia. Was/were food? by her?
Present Julia is eating the The chocolate is being Was she cooking the Was the food being
Continuous chocolate. eaten by Julia. food? cooked by her?
Do/does/did Does she cook the Is the food cooked by
Present Julia has eaten the The chocolate has been food? her?
Perfect chocolate. eaten by Julia. Did she cook the Was the food cooked
Simple Past Julia ate the The chocolate was food? by her?
chocolate. eaten by Julia. Has/have/ Has she cooked the Has the food been
Past Julia was eating the The chocolate was had food? cooked by her?
Continuous chocolate. being eaten by Julia. Had Sachin played Had cricket been played
cricket? by Sachin?
Past Perfect Julia had eaten the The chocolate had Will/shall/ Can she cook the Can the food be cooked
chocolate. been eaten by Julia. can/may food? by her?
Simple Future Julia will eat the The chocolate will be May Sachin play May cricket be played
chocolate. eaten by Julia. cricket? by Sachin?
Future Julia will be eating The chocolate will be Question When did she cook When the food was
Continuous the chocolate. being eaten by Julia. words the food? cooked by her?
(when/why/ Why did she punish Why were you punished
Future Perfect Julia will have eaten The chocolate will have
where/how/ you? by her?
the chocolate. been eaten by Julia
what) Who cooked the By whom was the food
Can/may/must Julia can eat the The chocolate can be food? cooked?
etc.+ base chocolate. eaten by Julia.
7. Change Imperative Sentences into Passive
3. Change of pronoun
Active Voice Passive Voice
Nominative Case Objective Case You are advised to learn
I Me Advice Learn your lessons.
your lessons.
He Him
Command Open the door. Let the door be opened.
She Her
You You Please make a cup You are requested to
Request
of tea. make a cup of tea.
They Them
It It You are ordered not to
Don’t allow anybody
Order allow anybody to peep
We Us to peep inside.
inside.
Who Whom
Your parents should be
Obligation Love your parents.
For example: Active: I ate the bread. loved.
Passive: The bread was eaten by me.
To change from passive to active voice, reverse the rules that
4. Addition of the word ‘by’ have been discussed above.
Active: Rohan buys the milk in evening. DIRECT AND INDIRECT SPEECH
• When the actual words of the speaker are reproduced, it is
called direct speech.
Passive: The milk is bought by Rohan in evening.
Example: He said, ‘I am going to school.’
5. When there are objects, there are two possible sentences: • When the main idea of a speaker’s words is reported by another
person and the exact
Active: The professor gave the books (object 1) to the words are not quoted,
students (object 2).
it is called indirect
speech or reported
Passive 1: The students were given the books by the speech.
professor.
Example: He said
that he was going to
Passive 2: The books were given to the students by the school.
professor.
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BUSINESS CORRESPONDENCE AND REPORTING
Basic Rules Changing Direct Speech into Indirect Speech
Quotation marks or ‘inverted commas’ are used for direct Pronouns • Examples: He said, ‘I am bored.’ (direct)
speech. of the first He said that he was bored. (indirect)
Example: ‘I have cut my finger!’ cried Mrs. Sharma. person are • Mira said, ‘We are going to the movies.’
Quotation marks are not used for indirect or reported changed as (direct) Mira said that they were going to
the movies. (indirect)
speech.
Example: Mrs. Sharma cried that she had cut her finger. Pronouns of • Examples: He said to her, ‘You are
the second beautiful.’ (direct) He said to her that she
Question marks and exclamation marks are not used in was beautiful. (indirect)
person are
reported speech. changed as • You must write neatly,’ the teacher told
Example: ‘Is it bleeding very much?’ Mr. Sharma asked. (direct) her pupils. (direct) The teacher advised
her pupils that they must write neatly.
Mr. Sharma asked if it was bleeding very much. (indirect)
(indirect)
The conjunction ‘that’ is used before the indirect statement.
Pronouns • Examples: I said, ‘They have gone out.’
Example: Aarav said, ‘I am driving the car.’ (direct) (direct) I informed that they had gone
of the third
Aarav said that he was driving the car. (indirect) out. (indirect)
person do
• Leela said, ‘These books are theirs.’
not change
Changing Direct Speech into Indirect Speech (direct) Leela said that those books were
theirs. (indirect)
Tense Rule Direct Speech Indirect Speech
Simple Present He said, “He is a He said that he was a
to Simple Past cricket player.” cricket player. Changes in Modals into Indirect Speech
Present I said, “Priya is I said that Priya was
continuous to going to Pune.” going to Pune. Rule Direct speech Indirect Speech
past continuous
Present perfect Azhar said, “It is Azhar said that it has Can changes She said, ‘I can She said she could
to past perfect raining.” been raining. into could speak English.’ speak English.
Present perfect Ria said, “Rohan Ria said that Rohan May changes I may invite them to She said that she might
continuous to has been at work.” had been at work. into might dinner. invite them to dinner.
past perfect
continuous Must changes I must go to the She said that she had to
Simple past to “My mother arrived He told me that his into must/ bank and get some go to the bank and get
past perfect on Monday”, he mother had arrived had to money. some money.
told me. on Monday.
Past perfect He explained, “The He explained that the Modals like would, should, could, ought to, and might do not
remains past bread has gone bread had gone stale. change during conversion.
perfect stale.” For example: Direct Speech: I should start a job.
Past perfect “We were living in Sia told me that they Indirect speech: She said that she should start a job.
continuous London”, Sia told had been living in
remains me. London.
past perfect Words expressing nearness in time or place are
continuous
Future changes I will finish my He said that he would
generally changed into words expressing distance
to present report in two days. finish the report in
conditional two days. Tomorrow
Yesterday — the day
This — that — the next/
Future My helper said, “I My helper said that before/the previous day
following day
continuous will be making the she would be making
changes to tea sometime.” tea sometime.
conditional Example: The
continuous
interviewer said to the
These — Today — that
young man, ‘We will let
those day
you know our decision
When the tense doesn’t change by tomorrow.’ (Direct)
To change from reported speech to direct speech, reverse the rules that have been discussed above.
48
business correspondence and reporting
CA FOUNDATION - PAPER 2B - BUSINESS CORRESPONDENCE AND REPORTING
Board of Studies has been catering the learning and requirement needs by providing a wide array of content to help
students not just to prepare but also to revise concepts for upcoming examination. Keeping the objective in mind it
has been decided to bring a crisp and concise capsule on the topics Introduction to Basics of writing and Precis writing
of Foundation Course Paper 2B: Business Correspondence and Reporting. These topics has been presented through
pictorial representation to enable students to understand the topic and improve the writing skills. Although this capsule
facilitates in enduring quick revision, but under no circumstances such revision can substitute the detailed study of the
material provided by the Board of Studies.
Alphabet
After the recognition of sounds, one learns to write alphabet.
Production
Finally, one can produce a relevant writing packed with vocabulary,
purposeful sentences and consequential writing.
49
business correspondence and reporting
Organisation of the collected information based on relevance, logic and in sequence is essential.
To learn to organize your thoughts, there are various patterns that one can choose from as per the subject and writing style. The
organisation of thoughts is more effective when done graphically.
Organising Patterns
Read
Dos Don'ts
Understand the
text and extract its
main idea Refrain from writing
Start with main idea personal opinion,
itself
Prepare Final Draft Decide criticism or remarks
Ensure that the main About inclusion of
idea is expressed and important facts or
retained ideas
Message should be Never insert any fact
clear and written in taken from internet
Select suitable title original flow
Read the Draft Choose title according
Make necessary to the main idea of
changes text
Essential to mention
Never ask questions
First Draft purpose of writing
Reduce orignal text to
its one-third length
Important No complex
points are figurative
easier language to
to find be used
51
BUSINESS CORRESPONDENCE AND REPORTING
CA FOUNDATION - PAPER 2B - BUSINESS CORRESPONDENCE AND REPORTING
The capsule of Foundation Course Paper 2B: Business Correspondence and Reporting covers the topic of Article writing,
Report Writing and Formal Letters and Official communications. These topics encompasses different kinds of formats to
be used while writing an Article, Report or Letters to help the students for quick revision. Under no circumstances, such
revision can substitute the detailed study of the material provided by the Board of Studies. Students are advised to refer
the Study Material for comprehensive study and revision.
Discusses Good
current Language
Article Writing used is Content Good
topics or Technique
of general and it's features simple yet
interest interesting
Provides information
on varied topics Give a substance in writing
Enables readers to think Describes a location, person, Use the facts or quotes or similar cases.
and influence them object, technology, etc.
For example:
The colour green: corporate conscience or fashion statement?
by Brendon Craigie
Hotwire has conducted a major audit looking at the greening of corporate communications and its potential influence on consumer
purchasing habits across Europe.
They researched five sectors (retail, banking & finance, manufacturing and automotive, utilities and technology & telecoms) in
five countries (the UK, France, Germany, Spain and Italy) looking at how frequently companies use green issues in their external
communications vehicles. In this instance press releases were selected as the representative communications tool. We coupled this
with pan-European consumer research that identified how green issues affect the purchasing decisions of consumers in the same
sectors and countries.
Contrary to popular opinion, companies across Europe do not greenwash their communications wholesale. The Hotwire study
has found that across all the sectors green appeared as a theme relatively infrequently - in only 7.5%-17% of companies' external
communications. French companies use green issues the most at 17% while German companies are least likely at 7.5%. These are
interesting findings – with Germany very much an international leader in terms of energy efficiency we put it more down to regional
'style' than the reality of the companies' initiatives. However, while it is good to see that companies are not opting for a cheap greenwash
across the board, it is also interesting to note that they are not in sync with consumer interest for green products and services. While
companies communicate about green issues relatively infrequently the consumer interest in all things green is high. When asked to
score their interest in 'green' between 1 and 10 (10 being the highest) European consumers scored averaging between 6.3 (Germany)
and 8 (France). Consumers in Spain, the UK and Italy scored 7, 7.2 and 7.7 respectively. In other words, consumer interest is high but
in terms of corporate communications, companies are not doing much to satisfy the interest.
The technology & telecoms sector is an interesting sector in terms of how it currently communicates around green, and what influences
the buying decision when purchasing technology products and services. The UK is the only country that communicates in any volume
(22% of technology companies' external communications) about 'green'. At 5 out of 10, the consumer research indicates that 'green' is
not a very compelling driver for British consumers in the technology space, however there is some interest and UK-based companies
are doing a few things to garner that interest. In the rest of Europe, PR professionals in the technology space have huge opportunities.
While consumer interest is pretty high at between 5.5 and 6.1, the companies' corporate communications efforts have so far ignored
the green agenda. In France only 7% of external communications by technology companies include the green theme, in Germany 1%,
Spain 2.9% and in Italy 0%. There are some big openings for being the green champion in the technology & telecoms industries in
France, Germany, Spain and Italy.
(Source: http://www.reusablearticles.com)
Well
organised and
methodical
presentation Magazine
Evidence Report
and of facts
Description
information of any event/
stated in
concise occurrence Official
Report Newspaper Report(s) for
manner Report
Writing organisation(s)
& its
features
Written Written in
for specific sequential Types of
audience form
Presented reports
after
thorough
investigation
53
BUSINESS CORRESPONDENCE AND REPORTING
Format of various reports Steps in report writing
Analyse:
Body of the Report Analyse the Organise:
material Sort and select
Written collected relevant content
for specific critically.
Magazine Report events.
Title/Headline
By (Name of Author) Write: Review and
Prepare first Redraft:
Body of Report Get perspective on
draft on the basis
of information first draft. Rewrite
gathered. or reorganise after
Formal/Official Reports review
Heading
To: Presentation:
From: Make sure words
are clear, events
Date: are in sequence,
check grammar
Subject: and spelling.
Introduction:
Give details for the task and reasons for it
For example:
Main Body:
Information, resources, and materials used Daughter of Gardener Tops Board Exam
By Riya Sharma
Description of task
Bhubneshwar, May 12: Suman Nayak, the daughter of a
Results municipal gardener, Om Nayak, has topped the Odisha Board
Conclusion: Senior Secondary Examination with 98.8% marks. Her success
Evaluation and suggestions has been lauded by the staff members of her school ‘The
Government Senior Secondary School, Malkaganj’, the Odisha
Education board and the State Education Minister.
Points to remember When her classmates conveyed the news to Suman, she did
not believe them. It was only when the school principal called
No place for personal opinions, perceptions, emotions and
feelings in a report. her that the reality sunk in. Suman’s father, Om Nayak, is
overjoyed at the news. He said, “Suman was always a bright
student. I have made all efforts to provide her with the best
Keep in mind the target audience education despite my meagre means”. He hopes that she will
be able to continue her education in spite of his financial
Personal pronouns are not used constraints.
Suman attributes her success to her parents and teachers.
Passive voice is preferably used in writing newspaper She said that the schoolteachers had provided her with all
reports and active voice is used for official reports. possible help by giving her extra time and attention along with
books and moral support. Her teachers speak highly of her
perseverance, dedication and hard work.
Language should be clear and concise.
When asked about her plans, Suman said she wished to
become a doctor. However, she was unsure if she could pursue
Technical jargons must be avoided. her dream because of financial problems. She hopes that she
will be able to secure a scholarship and get funding by the
Information should be organized logically, cohorently and government.
in chronological order. Source: The Times of India, M.G. Road, Bhubaneswar.
Ensure
Leave
State your Always be the letter
the line/
reason in first gentle and is error free -
space between
parapraph Add all courteous grammatically
paragraphs
the required Be polite even or spellings
Use the specified Use simple
details that will if it is a complaint
format language
make the task letter
easy
55
BUSINESS CORRESPONDENCE AND REPORTING
Order Letter
Format of formal letter
Addressed to seller from buyer, to place a new order or requesting
Sender’s Address him to deliver the goods. These letters includes three types of
information
Date
Designation/Name of Addressee
Details about the item or product being
ordered - such as name of the product/brand,
Address of the Addressee
unit price, quantity, model number, etc.
Salutation
Subject Information related to delivery- such as
Content: desired delivery, date and location, mode of
delivery, etc.
Introduction
Body
Conclusion Information related to payment - such as mode
of payment (should always be cleared) and
Complimentary close date of payment
Signature
Designation of sender (if applicable) In case the information is erroneously missing, misunderstanding
can arise.
Sales letter
Include important dates- such as purchase date,
receiving date, date when the problem occurred,
Recovery letter previous letters dates if sent earlier, etc.
Promotion Letter
Part – 2 Official Communication
Promotion Letters are written to customers to tell them about
new developments. Like opening of a new branch, new deals Official communication can be segregated into memoranda,
or offers, new schemes, upgrading the accounts, etc. A good official circulars, and office suggestion boxes.
promotion letter should:
Circulars Memos
Avoid fancy Subject should be
Adhere to
jargons and clear, precise and
business english.
personal topics to the point Circulated to large Means of official
number of employees in communication within the
office organisation
Sales Letter
Sales letters are an important means of business communication Conveys a special Frequently used to remind
and are written to publicise and ultimately sell a product or a message/instruction to everyone about policies,
service to the consumers. be followed in future procedures, etc.
57