MCQs

CA INTERMEDIATE
PAPER-2 : CORPORATE AND OTHER

LAWS
MULTIPLE CHOICE QUESTIONS
CONTENTS
PART- 1 COMPANY LAW
1 PRELIMINARY ................................................................................... 1-7
2 INCORPORATION OF COMPANY.......................................................... 8-17
3 PROSPECTUS AND ALLOTMENT OF SECURITIES.................................. 18-31
4 SHARE CAPITAL AND DEBENTURES ........ ....................................... 32-72
5 ACCEPTANCE OF DEPOSITS BY COMPANIES........................................ 73-75
6. REGISTRATION OF CHARGE ........................................................... 76-82
7. MANAGEMENT AND ADMINISTRATION ............................................. 83-105
8. DECLARATION OF DIVIDEND_ PAYMENT OF DIVIDEND .................... 106-124
9. ACCOUNTS OF COMPANIES............................................................... 125-143
10. AUDIT & AUDITORS ....................................................................... 144-155
11. COMPANIES INCORPORATED OUTSIDE INDIA ................................... 156-163
12. LIMITED LIABILITY PARTNERSHIP ACT, 2008 ................................... 164
PART- 2 OTHER LAWS
1 THE GENERAL CLAUSES ACT ,1897................................................... 165-166
2 INTERPRETATION OF STATUTES ...................................................... 167-170
3 THE FOREIGN EXCHANGE MANAGEMENT ACT ,1999.......................... 171-174
GENERAL MCQS & CASE STUDIES ....................................................... 175-274

CHAPTER-1 PRELIMINARY
CHAPTER-1
PRELIMINARY
1. The provisions of Companies Act, 2013 applies to

(a) Companies in Corporated under this Act
(b) Companies in corporated under any previous company Law
(c) Companies governed by any special Act in force
(d) All of the above
2. In the first schedule of the Act, there are ______no of table related to MOA
(a) 6 (b) 7 (c) 5 (d) 10
3. In the first schedule of this Act, there are _________no of tables selated to AOA
(a) 6 (b) 7 (c) 5 (d) 10
4. Schedule_______to the Companies Act, discusses with articities which may be included
under corporate social unponsibility (CSR)
(a) II (b) IV (c) VII (d) V
5. Schedule_________to companies Act discusses codefor Independent directors.
(a) III (b) IV (c) VI (d) V
6. Authorized capital is authorized by________of acompany to be maximum amount of share
capital of company.
(a) AOA (b) MOA (c) ROC (d) Directors
7. Free use ever includes
(a) Notional gains (c) Reserves available for distribution
(b) Unrealized gains (d) All of the above
8. Any change in carrying amount of an asset or liability can be treated as fire reserves
(a) True (b) False
9. ________is a depositary recipe created by foreign depositary outside India and authorized by
a company making an issues of DR.
(a) Indian Depository Receipt (c) English Depository Receipt
(b) Global Depository Receipt (d) Republic Depository Receipt
10. Key managerial performed in relation to company means_________
(a) Whole time Director
(b) Promoter
(c) Company secretary / Cost Accountant / Chartered Accountant
11. Managing director is executed with substantial power of management of__________
(a) Affairs of Company
(b) Routine value of company by virtue of Articles / Agreement / Resolution
(c) Both (a) and (b) (d) Either (a) or (b)
CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 1

12. Net worth does not include__________

(a) Revolution Reserve (c) Offered Expenditure
(b) Free Reserves (d) Accumulated Lones
13. Net worth does not include____________
(a) Free Reserve
(b) Write back to depreciation of Amalgamation
(c) Misc Expenditure
14. ________is a person who has been named in prosperity (or) identified by company in Annual
return U/S 92.
(a) Key management performed (c) Promoter
(b) Executive officer (d) Chief operating officer
15. Any notice / Circular / Advertisement inviting offers from public to subscribe of purchase
shares of a Body corporate is__________
(a) Prospectus (c) AOA
(b) MOA (d) Depository Receipt
16. Relative U/S 2(77) Means__________
(a) Members of HUF (c) Only kartha of HUF
(b) Only male members of HUF (d) All of the Above
17. A Person relative to another does not include___________
(a) Son including step Son (c) Son’s Wife
(b) Daughter including step Daughter (d) Daughter’s Husband
18. Sweat Equity share can be issued to__________
(a) Whole time Directors (c) Promoters only
(b) Directors or Employees (d) Only to key management performed
19. Sweat Equity shares are issued by company at____________
(a) Discount only (c) For Consideration other than Cash
(b) For Cash only (d) None of the Above
20. Can the company issue sweat Equity shares for providing know - how / IPRIGHTS / Value
additions
(a) True (c) False
(b) Partially True (d) Partially False
21. _________means a memorandum Containing salient feature of a prospectus on specified
by SEBI.
(a) Red herring prospectus (c) Shelf prospectus
(b) Abridged prospectus (d) Prospectus
22. _______ mean a person liable to contribute towards assets of the company in the event of
wound up company
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(a) Liquidator (c) Depository

(b) All directors (d) Contributory
23. DIN has been issued by________to any individual including to be appointed as Director
(a) Central Government (c) ROC
(b) State Government (d) None
24. Can DIN obtained U/S co. Act 1956 Shall be Same DIN for Co/ Act 2013?
(a) True (b) False
25. A company existing an commencement of this Act shall align in financial year within a
period of ____________from such commitment
(a) 6 month (b) 12 month (c) 18 month (d) 24 month
26. Who is not Key managerial personnel in the company?
(a) the company secretary (c) the CFO
(b) the whole time director (d) accountant
27. What is the extent of applicability of the Companies Act 2013?
(a) All states except Jammu & Kashmir. (c) Whole of India.
(b) All states except Bihar. (d) All states expect Sikkim.
28. Which of the following include a Public Financial Institution?
(a) LIC. (b) IDFC. (c) LIC&IDFC. (d) IBFC.
29. _________means the aggregate value of the paid up share capital & all reserves created out
of profits & securities premium a/c.
(a) Net worth. (b) Sales woth. (c) Turn over. (d) Gross over.
30. Who is a Key Managerial Person in relation to a company?
(a) Whole Time Director (c) Debenture holder
(b) Preference shareholder (d) Stock Broker
31. Ultra virus loans granted by the company are
(a) Void (c) Valid
(b) Voidable (d) None of these
32. In relation to other company, a company which the other company has a significant influence,
but which is not a subsidiary company of the company having such influence is called
(a) Associate company (c) Subsidiary Company
(b) Holding company (d) Government company
33. Pick an option which is not a feature of a company
(a) The liability of the company is that of its members
(b) Separate property
(c) perpetual succession
(d) separate legal entity
34. Examine the statement which is not true relating to the property ownership of the company
(a) The company can hold property in its own name

(b) members of the company can claim ownership of company's property

(c) dealings by or with a company are not carried in its name
(d) The shareholders of a company are not, part owners of the undertaking
35. What is the official signature of a company?
(a) Separate Legal entity (c) common seal
(b) separate property (d) A&B
36. Find out the legal decision from the given situation
A corporation will be looked upon as a separate legal entity as a general rule but when the
notion of legal entity is used to defeat public inconvenience, justify wrong, protect fraud,
the law will disregard corporate entity and consider everyone as one and the same
(a) Lifting of corporate veil (c) A or B
(b) Lifting of Corporate Personality (d) none of these
37. ________does not affect the existence of the company
(a) death (b) insanity (c) insolvency (d) A,B&C
38. Members of a company may also be the company's___________
(a) creditors (c) A or B
(b) employees (d) debtors
39. The situation under which the corporate veil can be lifted
(a) conduct of fraud or improper conduct
(b) disobeying court order
(c) company acting as shareholders
(d) protection of private policy
40. Property of the company belongs to
(a) Company (c) members
(b) shareholders (d) promoters
41. The shares of which company are freely transferable
(a) private company (c) both A&B
(b) public company (d) none of the above
42. The minimum no: of persons in a public company
(a) 1 (b) 2 (c) 5 (d) 7
43. Liability of a member in case of private company
(a) unlimited (c) both(a)&(b)
(b) limited (d) none of the above
44. The minimum paid up share capital in case of private company
(a) 1 Lakhs (b) 2 Lakhs (c) 3 Lakhs (d) 4 Lakhs
45. The minimum paid up share capital in case of public company
(a) 1 Lakhs (b) 3 Lakhs (c) 5 Lakhs (d) 7 Lakhs
46. Age limit of directors in case of public company
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(a) 65 (b) 70 (c) 75 (d) 80

47. Age limit of directors in case of private company
(a) 65 (c) 75
(b) 70 (d) no age limit
48. The company's nationality is decided by its
(a) shareholders (b) registered office
(c) place where books of accounts are kept (d) none of the above
49. Partners are___of the firm
(a) owners (c) agents
(b) employers (d) none of these
50. _________% of shares should be held by company in other company so as to become subsidiary
(a) more than 50 (c) more than 30
(b) more than 40 (d) more than 10
51. The companies which are formed under Special charter granted by king or queen of England
are called
(a) statutory company (c) Chartered company
(b) registered company (d) none of these
52. The maximum paid up capital in the case of public company
(a) 50 Lakhs (c) 125 Lakhs
(b) 100 Lakhs (d) none of these
53. What is the other name of section 8 company
(a) non profit company (c) Licenced company
(b) Association not for profit (d) All of these
54. Find out the special privilege enjoyed by the private company is
(a) All directors of the private can be rotational directors
(b) Limits with respect to managerial remuneration is not applicable
(c) Three person are are required to constitute a quorum
(d) The min number of persons is 4
55. Retirement of Director by rotation for public company shall be not less than--------at each
AGM.
(a) 1/3* of Directors (c) 3/4* of Directors
(b) 2/3* of Directors (d) 1/401 of Directors
56. In_________case the court looked behind the facade of the company and its place of
registration in order to determine the true character of the company
(a) Daimler Co. Ltd.v.Continental Tyre & Rubber Co.
(b) BSN v. Janardan Mohandas Pilai
(c) Saloman v. Saloman (d) None of these

57. ______ is a new form of private company under companies Act 2013
(a) Holding company (c) Body corporate
(b) Small company (d) None of the above
58. Every company public or private has to be registered with
(a) Central Government (c) RBI
(b) ROC (d) None of these
59. As per section 149(1) of the Companies Act 2013,every public company shall have a minimum
number of__________directors
(a) 1 (b) 2 (c) 3 (d) 7
60. Every company shall have atleast one director who has stayed in India for a total period of
not less than_days in the previous calendar year
(a) 180 (b) 150 (c) 182 (d) 365
61. A company in which 50.25% of shares are held by one State Government while the rest of
the shares are held by private sector companies and by retail shareholders i.e. members of
public, is a -
(a) Government company (c) Corporation
(b) Public company (d) Private sector company
62. A company incorporated outside India Which has no place of business in india and which
does not conduct any business actvity in India in any manner is ________
(a) Foreign company (c) Company as defined in sec 2(20)
(b) An indian company (d) none of the above
63. An institute may be notified as a public financial institute if_________of the paid up share
capital of such institute is held or controlled by CG or any SG or govt. or partly by CG partly
by SG.
(a) 25% or more (c) 52% or more
(b) 50% or more (d) none of the above
64. An institute may be notified as a public financial institute if it has been established or
constituted by or under ______ other than this act or previous company law.
(a) Any central Act (c) Either (a)or (b)
(b) Any state act (d) none of the above
65. A private company shall have a minimum of ____ members and maximum of ____ members?
(a) 1;100 (b) 2;200 (c) 3;300 (d) 7;50
66. A company shall be a small company if and if it's paod up share capital does not exceed
_______ and its T/O (As per P&L of immediately previous year) does not exceed_______?
(a) Rs.50 lakh, Rs.2 crore (c) Rs.500 lakh, Rs.2 crore
(b) Rs.5 lakh, Rs.2 crore (d) Rs.50 lakh, Rs.20 crore
67. Government company means any company in which not less than 51% of the paid up share
capital is held:
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(a) By the central Government (c) Jointly by the state & central Govt
(b) By any state Government (d) Any of the above
68. Statements:(1):A public company having a Paid up share capital of Rs.10 lakh and a T/O of
40 lakh is a small company (2) A private company having a paid up share capital of Rs.10
lakh and a T/O of 40 lakh is a small company.
(a) Statement 1 is correct (c) Both the statements are correct
(b) Statement 2 is correct (d) none of the statements are correct
69. If a company get the license of SEC-8 company it is not requires to use the words__________?
(a) PVT ltd (c) Either (a)or (b)
(b) LTD (d) None
70. "Company limited any guarantee" Means a company having the Liability of its members liited
by _________ to such amount as the members may respectively undertake to contribute to
the asset of the company in the event of being wound up.
(a) Companies Act-2013 (c) The memorandum
(b) The articles (d) The rules
71. __________ relation to another company means a company which that other company has
a significant influence , But which is not a subsidiary company of the company having such
influence and includes a joint venture company.
(a) Associate company (c) Investing Company
(b) Subsidiary company (d) none of the above
ANSWERS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
(d) (d) (c) (c) (b) (b) (c) (b) (b) (a) (a) (a) (b) (c) (a)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(a) b b (c) (a) (b) (d) (a) (a) (d) (d) (c) (c) (a) (a)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(a) (a) (a) (b) (c) (a) (d) (c) (b) (a) (a) (d) (c) (a) (c)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(a) (d) (b) (c) (a) (c) (d) (d) (b) (b) (a) (b) (b) (c) (c)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71.
(b) (d) (d) (c) (b) (a) (d) (d) (c) (c) (a)

CHAPTER-2 INCORPORATION OF COMPANY
CHAPTER-2
INCORPORATION OF COMPANY
1. The company, but before issue of the certificate of commencement of business are
(a) provisional contracts
(b) post incorporation
(c) preliminary contracts
(d) contracts in normal course of business
2. The applicant for the availability of name of the proposed company can have an option to
give maximum____alternative names
(a) 3 (b) 4 (c) 5 (d) 6
3. Pre-incorporation contract is also known as_
(a) Provisional (b) Preliminary (c) illegal (d) legal
4. The application for registration of a company should be presented to the registrar of the
state in which the___of the company is to be situated
(a) Manufacturing plant (c) Business office
(b) First branch (d) Any of the above
5. No of documents to be submitted by a public ltd company to the registrar while applying for
incorporation of the company is
(a) 3 (b) 2 (c) 7 (d) 50
6. Among the following which documents are not mandatory to be submitted to the Registrar
along with incorporation application by a company
(a) Address of registered office & undertaking
(b) Undertaking& statement of capital
(c) Statement of capital & list of directors
(d) List of directors & statement of capital
7. Documents filed with ROC are_________documents.
(a) Public documents (c) Secret documents.
(b) Private documents (d) Hidden documents.
8. How can a company ensure transparency in business operations?
(a) By filing documents with ROC.
(b) By mobilising huge amounts through Public issue.
(c) By owning property in its own name.
(d) By owning property in its shareholders name.
9. How is there an ease in control & management of a company?
(a) By filing documents with ROC.
(b) By undertaking all sorts of business ventures.
(c) By electing representatives of members from the shareholders of the company.
8 Navkar Institute
(d) By filing documents with NCLT.

10. Why do we say that upon registration there will be a total loss of privacy?
(a) All documents filed with ROC become public.
(b) All documents filed with ROC become private.
(c) All documents filed with ROC remains as a secret.
(d) All documents filed with ROC become private & remains as a secret.
11. For which of the following companies, the word "National" is permissible?
(a) Govt company. (c) Private company.
(b) Public company. (d) Registered company.
12. If a company has changed ifs name during the last________yrs, it shall paint or affix or print
along with ifs name ,the former name so changed.
(a) 3yrs. (b) 2yrs. (c) 1 yr. (d) 5 yrs.
13. What is the consequence of not painting, printing,of a company name on the outside of
every office or place in which it's business is carried on?
(a) Fine of Rs. 1OOO for every day during which the default continues.
(b) Fine of Rs. 1OO for every day during which the default continues.
(c) Fine of Rs. 1OOO for every day during which the default continues/ 10 Lakh whichever
is less
(d) Fine of Rs. 10,000 for every day during which the default continues
14. The number of days for which an ROC may reserve the name of a company in Form No.INC.
1 is_______.
(a) 30days. (b) 40days. (c) 50days. (d) 60days.
15. Name the centre constituted by CG ,which has a territorial jurisdiction all over India to
process applications for reservation of name in e-Form No.INC-1.
(a) Government Registration Centre. (c) Regional Registration Centre.
(b) Central Registration Centre. (d) Kendra Registration Centre.
16. _______is not the conclusive evidence of that all the objects of the company, as set out in
the MOA as legal.
(a) Compliance declaration. (c) Share certificate.
(b) Affidavit. (d) Certificate of Incorporation.
17. Once all the formalities of conversion of a Sec.8 company into a company of any other kind
is done. How will the ROC confirm that conversion?
(a) By issuing certificate of incorporation
(b) By issuing Certificate of commencement of business
(c) Altering MOA
(d) Altering AOA
18. Which of the following professionals be considered as promoters?
(a) An accountant valuing assets of a business to be purchased.

(b) solicitor who drafts MOA/AOA. (c) A&B.

(d) A professional who renders more than the professional assistance.
19. Contracts entered by agents/trustees on behalf of a prospective company before ifs existence
is termed as_______.
(a) Provisional contracts. (c) Incorporation contracts.
(b) Preliminary contracts. (d) Pre incorporation contracts.
20. The time limit given to a company to change ifs name if it's name resembles the registered
trademark of another company
(a) Within 6 months from the issue of direction by CG.
(b) Within 3 months from the issue of direction by CG.
(c) Within 12 months from the issue of direction by CG.
(d) Within 9 months from the issue of direction by CG.
21. The time limit within which a company should produce notice of change of ROC along with
the order of CG is________.
(a) within 5 days from the date of such change.
(b) within 15 days from the date of such change.
(c) within 10 days from the date of such change.
(d) within 20 days from the date of such change.
22. Name the company to which the words Pvt Ltd & Ltd are not applicable.
(a) Dormant company.
(b) Company limited by guarantee having no share capital.
(c) Association not for Profit.
(d) Company limited by guarantee having share capital.
23. The correct step by step procedure, for change in Registered office within jurisdiction of
ROC, but out side local limit.
1. Pass a special resolution.
2. Give notice of new location to ROC.
3. File a copy of Special Resolution.
4. Convene a general meeting of shareholders.
(a) 1,2,3,4. (b) 4,1,3,2. (c) 4,3,2,1.
24. The document which should not be enclosed in an application to CG for change of registered
office from one state to another is___________.
(a) Copy of Power of Attorney.
(b) Affidavit verifying application.
(c) Copy of the notice convening the General Meeting.
(d) Copy of Special Resolution in form No.MGT.14.
25. When is a company said to have been registered?
(a) When it files the memorandum of association with the registrar of companies.
10 Navkar Institute
(b) When it gets the certificate of incorporation

(c) When it gets the certificate of commencement of business
(d) When it actually starts its business
26. A promoter is a person who_.
(a) is a director.
(b) is a relative of the company .
(c) is a well wisher of the company .
(d) takes part in the company's incorporation .
27. Which one of the following is NOT an advantage of the incorporation of the company?
(a) perpetual succession
(b) limited liabilities of members.
(c) capital contribution forming part of the joint stock f the company.
(d) Freedom to do any business
28. On incorporation of a company, the Registrar of Companies in addition to the Certificate of
Incorporation, issues a unique identification number called as :
(a) Unique corporate number (c) Company identification number
(b) Corporate identification number (d) Unique identification number
29. Where the registrar strikes off the register the name of a company as a defunct one, the
court has the power to order restoration of name with in:
(a) 5 years (b) 7 years (c) 10 years (d) 20 years
30. Pre incorporation contracts are those contracts which are entered into by_________
(a) Agents. (c) Agents/Trustees.
(b) Trustees. (d) Agents & Nominees.
31. A susidiary company may holds shares as ______ of the holding company.
(a) A legal represetative of a deceased member
(b) A trustee
(c) either 1 or 2
(d) none of these
32. In the case of a private company, The provisions for etrenchment may be made at the time
of formation of the company or by an amendments of articles_____
(a) By passing a special resolution
(b) With the consent of all members
(c) By passing a special resolution and obtaining the approval of CG
(d) With the consent of all members and obtaining the approval of CG
33. A company shall not allot or transfer its share to_______
(a) Its parent company (c) its associate company
(b) Its subsidiary company (d) Joint venture company
34. ___________ can not be a subscriber to the memorandum & articles.

(a) Partnership firm (c) A FOREIGNER

(b) LLP (d) all of the above
35. For the purpose of incorporation of a company there shall be filed with Registrar a declaration
in form no INC-9 signed by ____.
(a) Every subscriber to Memorandum
(b) Every person named as a first director in the articles
(c) either (1) or (2)
(d) Both (1) & (2)
36. _________ can not be a subscriber to the memorandum & articles.
(a) A company (c) Minor
(b) Government (d) all of the above
37. Where a company registered by name, which in the opinion of CG, is identical with or too
nearly resembles,The name of company previously registered, then the CG may direct the
company to rectify the name , when such direction is given company shall rectify it's name
by _________
(a) Passing an ordinary resolution
(b) passing a special resolution
(c) Passing an ordinary resolution and obtaining the confirmation of the regional Director
(d) Passing special resolution and obtaining the confirmation of the Central Government
38. In case of a company having a share capital rhe subsciption clause of memorandum shall
contain__________.
(a) The Number of shares Subscribed by each subscriber
(b) Name, Address and occupation of each Subscriber
(c) Both (1) and (2)
(d) none of the above
39. An OPC cannot get self converted voluntarily into any other kind of company unless a period
of _______ has expired from the date of incorporation of OPC.
(a) 1 year (b) 2 year (c) 3 year (d) 5 years
40. Every subscriber to memorandum shall make a declaration That he has not been found
guilty of any fraud or misfeasance or breach of duty during the preceeding___________.
(a) 1 year (b) 2 year (c) 3 year (d) 5 years
41. A natural person _______ a member of more than one OPC at any point of time and said
person ______ a noimee of more than one OPC.
(a) shall not be; shall not be (c) Shall not be; may be
(b) may be; may be (d) May be; shall not be
42. Conversion of Private co into public company requires_________
(a) A special resolution
(b) A special Resolution and approval of CG
12 Navkar Institute
(c) A special Resolution and approval of Tribunal

(d) An ordinary Resolution
43. Statements (1) A promoter stands in a fiduciary capacity Towards the company (2) A person
acting in a professional capacity is a promoter.
(a) Statement 1 is correct (c) Both statements are correct
44. As per doctrine of________, outsiders dealing with the company are entitled to assume
that as far as internal proceeding of the company are concerned everything has been done
regularly
(a) Ultra virus (c) Both 1 & 2
(b) Contructive notice (d) none of the above
45. Where an OPC ceases to be entitled to continue as OPC , it shall within ___________ ,
convert itself into______.
(a) 3 months; a private company
(b) 3 months; a public company
(c) 6 months; a private company or a public company
(d) 6 months; a private company or public company or a limited liability partnership or a
partnership firm
46. A promoter is ______ of the company.
(a) An agent (c) Both 1 & 2
(b) A trustee (d) none of the above
47. Conversion of Private co into public company requires_____
(a) A special resolution
(d) An ordinary Resolution
48. The proprietor of registered trade mark may make an application to the CG that the name
of a company is identical with or too nearly resembles the registered trademark the the
Central Govt. may direct the company to rectify its name. When such a direction given The
Company shall, withi___ rectify its name.
(a) 1 year (b) 2 years (c) 3 years (d) 5 years
49. A change in the name of a company requires _______________.
(a) An ordinary resolution and approval of the CG
(d) An ordinary Resolution & approval of the tribunal
50. The capital clause of memorandum shall state-
(a) The amount of Authorised share capital

(b) Number of shares

(c) Nominal value of each share
(d) all of the above
51. The term resident in India means a person who stay in India for _______ or more days during
the immediate preceeding financial year.
(a) 180 days (b) 182 days (c) 183 days (d) 189 days
52. An OPC shall be cease to entitled to continue as OPC, if its paid up share exceeds ______ or
its average annual T/O during the relevant period exceeds ____________?
(a) 10 crore, 100 crore (c) 50 lakh, 10 crore
(b) 50 lakh, 2 crore (d) 10 crore, 50 crore
53. Acts ultra vires the directors or articles_______.
(a) Are void
(b) can not become valid by estoppel or ratification
(c) Both 1 & 2
(d) May be ratified by the members
54. The approval of the CG is not required , if the only change in the name of the company is
__________
(a) Deletion of word Private consequent upon conversion of a public company into a
private company
(b) Addition of the word private consequent upon conversion of a public company into a
private company
55. _______ shall be egraved in legible characters the common seal, if any, of the company,
(a) The name of the company (c) Both (1) and (2)
(b) The Corporate identify number (d) The name and address of RO
56. A company may alter its object____________
57. statements (1) An OPC cannot have more than 1 directors (2) AN OPC have a private
company
(b) Statement 2 is correct (d) none of the above
58. The name clause of memorandum may be altered by way of_______
(a) Change the name (c) either (1) or (2)
(b) Rectification of name (d) none of the above
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59. A company may change its RO from the jurisdiction of one Registrar to the jurisdiction of
another registrar within the same state by ________.
(a) Passing an ordinary resolution (b) passing a special resolution
(d) Passing special resolution and obtaining the confirmation of the regional Director
30. A person shall be eligible to corporate OPC only if he is __________
(a) A natural person & an Indian citizen
(b) An Indian citizen & resident in India
(c) a natural person & resident in India
(d) a natural person & Indian citizen & resident in India.
61. In the case of a public company, The provisions for etrenchment may be made at the time
of formation of the company or by an amendmets of articles_____
(a) By passing a special resolution
(b) With the consent of all members
(c) By passing a special resolution and otaining the approval of CG
(d) With the consent of all memers and otaining the approval of CG
62. Alteration of situation clause at Memorandum takes place where _______.
(a) RO is shifted outside the local limits of the city, town, villlage
(b) RO is shifted from the Jurisdiction of one Registrar to the jurisdiction of another
registrar
(c) RO is shifted from one state to another state (d) all of the above
63. Where the CG directs to rectify its name The company shall rectify its name with in ___
months
(a) 1 (b) 2 (c) 3 (d) 6
64. Various forms of Memorandum have been specified in _____ in _______.
(a) TABLES A,B,C,D,E schedule 2 (c) TABLES A,B,C,D,E schedule 1
(b) TABLES F,G,H,I,J schedule 2 (d) TABLES F,G,H,I,J schedule 1
65. every company shall have its RO within _______ of its incorporation and at all times
thereafter.
66. A application for reservation of name "Hemraj Chemicals pvt ltd" was made to the Registrar
by Mr.Hem and Mr.Raj , The Promoters of the Proposed company on 16TH april 2019, the
registrar granted his approval shall remain in force till_________
(a) 1 at may,2019 (c) 16 at may,2019
(b) 6 at may,2019 (d) 15 at may,2019
67. On receipt of a application from The proprietor of registered trade mark may make an
application to the CG that the name of a company is identical with or too nearly resembles
the registered trademark the the Central Govt. may direct the company to rectify its name.

When such a direction given The Company shall rectify its name by__________
(d) passing a special resolutio & otaininh approval of CG
68. A company may change the place of its RO from one state to another state___
(a) Passing an ordinary resolution (b) passing a special resolution
69. A subsidiary company may holds shares in the holding compay if such shares were acquired
y the subsidiary company____ it became a subsidiary company of the holding company.
(a) Before (c) within 15 days after
(b) After (d) within 30 days after
70. A limited company may be_______?
(a) a natural person & an indian citizen
(b) an Indian citizen & resident in india
(c) A company limited by guarantee and having a share capital
(d) Any of these
71. The telephone number, Fax number if any e-mail address and the address of website if any
shall be printed on _______.
(a) Outside every office or place in which its business is carried on
(b) All the business letters, billheads ,notices, and other official pulishers
72. Where a company has been got incorporated by furnishing any false or incorrect information
or by suppressing any material fact or information or by any fraudlent action , The Tribunal
may, on being satisfied that the Situation so warrants,____________.
(a) Order for the winding up of the company
(b) Direct Removal of the name of the company from the register of companies
(c) Pass such other order as it may deem fit
73. In case of OPC the words 'One Person Company' shall e mentioned __________.
(a) order for the winding up of the company
(b) Below the name (c) Both (1) and (2)
74. An unlimited company may be ________?
(a) A company limited by shares (c) either (a) or (b)
(b) A company having a share capital (d) A gurantee company
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75. Notice of every change in situation of the RO shall be given to the registrar , within ___ of
such change.
76. Statements (1) A Promoter can make a profit in respect of any transaction with the
company, only if he makes a full & fair disclosure such profit. (2) The promoter shall
have no right to receive any remuneration from the company unless the company, after
incorporation, has contracted the same
77. A company may change its Registered office outside the local limits of the city, town, village
in which the RO is situated by________
78. A promoter is ______ of the company.
(a) An agent (c) Both (1) and (2)
(b) A trustee (d) none of the above
79. The Memorandum of OPC shall be state the name of any other person who shall become the
member of OPC in case of __________ the subscriber to memorandum.
(a) Death (c) Death or incapacity to contract
(b) Incapacity to contract (d) Death or insolvency
80. OPC can not get itself converted Voluntarily into any other kind of company unless ________
have entired from the date of incorporation of OPC.
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(a) (d) (b) (c) (c) (a) (a) (a) (c) (a) (a) (b) (a) (d) (b)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(d) (a) (d) (d) (a) (b) (c) (b) (d) (b) (d) (d) (b) (b) (c)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45
(b) (c) (a) (a) (d) (c) (a) (c) (b) (d) (a) (a) (a) (c) (c)
46. 47. 48. 49 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(c) (c) (c) (d) (d) (b) (b) (d) (c) (a) (b) (b) (c) (d) (d)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(b) (d) (c) (a) (b) (b) (d) (b) (c) (d) (a) (d) (b) (c) (c)
76. 77. 78. 79. 80.
(c) (b) (d) (c) (a)

CHAPTER-3 PROSPECTUS - ALLOTMENT OF SECURITIES
CHAPTER-3
PROSPECTUS - ALLOTMENT OF SECURITIES
1. The persons who are liable to pay the compensation to every person who has sustained loss
or damage due to misstatement in prospectus.
(a) Company.
(b) Director at the time of issue.
(c) A promoter.
(d) Company, director at the time of issue& a promoter.
2. A company which cannot issue a prospectus inviting subscription to securities
(a) Private company. (c) Unregistered company.
(b) Public company. (d) Registered company.
3. Prospectus should be issued by the company within_days of registration with ROC.
(a) 90 days. (b) 85 days. (c) 67 days. (d) 80 days.
4. The category A in a prospectus is___________.
(a) Reports. (c) Compliance declaration.
(b) Information. (d) Other matters.
5. Non-compliance of Abridged prospectus by a company attracts a penalty of________.
(a) ` 45,000 for each default. (c) ` 50,000 for each default.
(b) ` 60,000 for each default. (d) ` 20,000 for each default.
6. What is the validity period of a Shelf Prospectus?
(a) 9 months commencing from the date of opening of the first offer of securities.
(b) 6 months commencing from the date of opening of the first offer of securities.
(c) 1 year commencing from the date of opening of the first offer of securities.
(d) 2 year commencing from the date of opening of the first offer of securities.
7. Information Memorandum shall be prepared in________.
(a) Form No.PAS.2. (c) Form No.PAS.l.
(b) Form No.PAS.3. (d) Form No.PAS.4.
8. A company proposing to make an offer of securities may issue a ________prior to the issue
of a prospectus.
(a) Abridged Prospectus. (c) Information Memorandum.
(b) Shelf Prospectus. (d) Red Herring Prospectus.
9. The prospectus which does not include complete particulars of the price of the securities is
(a) Abridged Prospectus. (c) Deemed Prospectus.
(b) Shelf Prospectus. (d) Red Herring Prospectus.
10. The no. of persons who should subscribe for each security is__________,
(a) 400 persons. (c) 300 persons.
(b) 200 persons. (d) 100 persons.
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11. When there is a untrue statement in a prospectus, who can sue?

(a) Subscriber in primary market (c) Rights issue
(b) Subscriber in secondary market (d) None of these
12. Meaning of prospectus is defined under which section
(a) Sec 2(79) (b) Sec 2(68) (c) Sec 2(70) (d) Sec 9(80)
13. Which of the following are not required to issue prospectus
(a) Private company (c) Sweat equity share
(b) In case of rights issue (d) All the above
14. ______are the prospectus issued instead of full prospectus
(a) Abridged (c) Shelf
(b) Statement in lieu (d) Red herring
15. ______year of imprisonment will be imposed in case of issue of prospectus with untrue
statement
(a) 1 (b) 2 (c) 3 (d) 4
16. What is the liability of an expert for mis-statement in prospectus:
(a) Fine 50,000 (c) Both A & B
(b) Imprisonment 2 yrs (d) None of these
17. What is the liability not delivering that can be imposed for the statement in lieu of prospectus:
(a) Fine 10,000 (c) Both
(b) Imprisonment 2 yrs (d) None of the above
18. The condition for considering a document containing offer for sale of securities is usually ....
(a) It extends an invitation to the public to subscribe
(b) It is open to any person to bring his money and apply for securities
(c) Both A & B
(d) Either A or B
19. ______are the prospectus issued by issuing house
(a) Deemed prospectus (c) Red Herring prospectus
(b) Shelf prospectus (d) None of the above
20. If a company fails to refund application money within 130 days from the date of issue of
prospectus on non receipt of minimum subscription, who will be personally liable?
(a) company (c) shareholders
(b) directors (d) none of the above
21. The date of opening of subscription list means the beginning of the_______from the date of
issue of prospectus
(a) 5th (b) 3rd (c) 10th (d) 24th
22. A company cannot pay underwriting commission unless it is authorised by its________
(a) Articles (c) Prospectus
(b) Memorandum (d) Both A & B

23. The minimum application money should be________ of the nominal value as per the SEBI
guidelines
(a) 25% (b) 35% (c) 30% (d) 40%
24. In case of share underwriting commission will be________%
(a) 2 (b) 3 (c) 5 (d) 7
25. Prospectus includes
(a) any notice, circular, advertisement or other document inviting offers from the public
for subscription or purchase of any securities of a company
(b) red herring prospectus
(c) both A & B
(d) none of these
26. _______section and ______ provides the matters to be stated in the prospectus
(a) Sec20(l) & Companies(Prospectus & Allotment of Securities)Rules,2016
(b) Sec26(l) & Companies(Prospectus & Allotment of Securities)Rules,2014
(c) Sec20(2) & Companies(Prospectus & Allotment of Securities)Rules,2013
(d) Sec20(l) & Companies(Prospectus & Allotment of Securities)Rules,2010
27. The Fact sheet of a prospectus of a company includes
(a) details about eligible investors (c) A or B
(b) type of offer document (d) A&B
28. A prospectus which does not include complete particulars of the quantum or price of the
securities included therein
(a) shelf prospectus (c) abridged prospectus
(b) red herring prospectus (d) none of these
29. "Prospectus should contain everything which should be strictly accurate .None of the
statements therein should be untrue........." is governed by which case study
(a) Rexvs Lord Kylsant
(b) New Brunswick& Canada Rly
(c) New Brunswick& Canada Rly.& Land & co.vs Muggeridge
(d) None of these
30. Remedy to civil liability for mis-statement in prospectus is available only if subscription to
shares were_which contained misstatement
(a) based on prospectus (c) BothA&B
(b) B not based on prospectus (d) either AorB
31. The company shall file return of allotmet with the registrar on __________
(a) allotment of securities (c) both 1 & 2
(b) Reissue of forfeited share (d) forfeiture of share
32. A company may make a private placement of it's securities only if it is authorised by__
(a) the central govt. (b) The Tribunal
20 Navkar Institute
(c) The court (d) none of the aove

33. Any variation between the red herring prospectus and prospectus shall be highlighted as
variation in the ____________.
(a) Deemed prospectus (c) Information memoradum
(b) Prospectus (d) Abridged prospectus
34. Every person willing to subscribe the private placement issue shall pay to the compay the
subscription money by_____________
(a) Cheque (c) Either 1 or 2
(b) cash (d) none of the aove
35. A company making private placement shall issue_______
(a) Private placement offer cum application
(b) Prospectus
(c) Abridged prospectus
(d) Red heering prospectus
36. In case of private placement , if the company is not able to allot the securities within the
stipulated time period , it shall within next________ , repay the applicatio money to the
applicats.
37. In case of a private placement the return allotment of securities shall e filed in Form
(a) PAS-1 (b) PAS-2 (c) PAS-3 (d) PAS-4
38. _____ means a memorandum containing such salient features of prospectus may be specified
by SEBI by making regulation in this behalf.
(a) Deemed prospectus (c) Information memoradum
(b) Prospectus (d) Abridged prospectus
39. _____- means a Prospectus in respect of which the securities or class of securities included
therein are issued for subscription in one or more issues over a certain period without the
issue of a further prospectus.
(a) Shelf prospectus (c) Information memoradum
(b) Red heering prospectus (d) Abridged prospectus
40. The private placement shall not be made, during the entire financial year, to more than_______
persons.
(a) 50 (b) 100 (c) 200 (d) 250
41. ________- is required if a company intends to vary the terms of any contract reffered In the
prospectus was issued
(a) An ordinary Resolution (c) Approval of CG
(b) A special resolution (d) Both 2 and 3
42. Any notice, circular,advertisemet or other document inviting offers from _____ for the
subscription or purchase of ay securities _______ shall be a prospectus.

(a) The member; company (c) The public; company

(b) The members;a body corporate (d) The public; a body corporate
43. Prior to the issue of a second or subsequent offer of securities under the shelf prospectus ,
The company shall be required to file ______ with the Registrar.
(a) Deemed prospectus (c) Information memorandum
44. A company may forfeit the shares held by a member on the ground of non-payment of calls
only if it is authorised by ___.
(a) A resolution passed in General meeting (b) The articles
(c) Resolution passed by Board (d) Both 2 and 3
45. A statement can be included as an expert's statement in the prospectus only if the person
making the statement is not , has not been , engaged or interested in_____ of the company.
(a) The formation resolution (c) Either 1 or 2
(b) management (d) Membership
46. The term public offer includes_________
(a) Initial public offer of securities to the public by a company
(b) Further public offer of securities to the public by company
(c) An offer for sale of securities to the public by an existing shareholder through issue
a prospectus
(d) All of these
47. A company making private placement shall issue shares within_____ of receiving the
application money for the securities.
48. ______ is included in the definition of prospectus.
(a) Any document described or issued as a prospectus
(b) Shelf prospectus (c) Red herring prospectus (d) All of these
49. if a company intends to vary the terms of any contract refereed to In the prospectus or vary
the objects for which the prospectus was issued, the dissenting shareholders shall be given
an exit offer by____, ad the exit price and the manner and conditions of the exit offer by___
, and the exit price & the manner and conditions of the exit offer shall be such as may be
specified by_______.
(a) The directors,The CG (b) The members,THE CG
(c) The promoters or controlling SH ; SEBI (d) The members;SEBI
50. _______ means a prospectus which does not include complete particular of the quantum or
price of the securities included therein
(a) Shelf prospectus (c) Information memoradum
51. No prospectus shall be issued by or on behalf of a company unless on or before the date of
22 Navkar Institute
its publication ,there has been delievered to the registrar for filling , a copy of prospectus
signed by every person who named therein as _______ of the company.
(a) A Director (c) Both 1 & 2
(b) A proposed director (d) none of the aove
52. The self prospectus shall indicates a period not exceeding ________ as the period of validity
of such prospectus.
53. The private placement offer cum application letter shall be in form______
54. Unless contrary is proved it shall be presumed the allotment or agreement to allot the
the securities the made with a view to the securities being offered for sale to the public
if it is shown that the offer for sale to the public was made within ______ of allotment or
agreement to allot.
(a) 3 months (b) 6 months (c) 1 year (d) 3 years
55. statements (1)In case of a deemed prospectus, the prospectus shall contain the net
consideration received or to be received by the company in respect of the securities to which
the offer relatives. (2) In
case of a deemed prospectus, the prospectus shall contain the time and place for inspection
of contract whereunder the securities have been alloted or to e alloted
(a) statement 1 is true (c) Both 1 & 2 is true
(b) statement 2 is true (d) none of the above
56. A company proposing to issue a red heering prospectus shall file it with the registrar at least
_______ prior to the opening of the subscription list & the offer.
57. A public company may issue securities_____.
(a) To public, by issuing a prospectus
(b) By way of private placement
(c) By way of a right issue or a bonus issue
(d) All of these
58. The application money on every securities shall not be less than____ of the nominal amount
of security.
(a) 2% (b) 2.50% (c) 5% (d) 10%
59. Where a company issued a shelf prospectus , it shall prior to the issue of a second or
subsequent offer of securities under the shelf prospectus, file____ with the registrar.
(a) Deemed prospectus (c) Information memorandum
60. No prospectus shall be valid if it is issued more than______ after the date in which a copy
thereof is delievered to the registrar.


61. A company may make a private placement of it's securities only if such proposal is approved
by______________
(a) The member by passing an ordinary resolution
(b) The member by passing an special resolution
(c) The board by passing unanimous resolution
(d) Both 2 and 3
62. The company shall maintain a complete record of private placement offers I form____
63. A public company may issue securities
(a) to public through prospectus
(b) to public through prospectus
(c) through a rights issue or a bonus issue
(d) All of above
64. A private company may issue securities
(a) by way of rights issue (c) through private placement
(b) by way of bonus issue (d) any of above
65. Term public offer includes
(a) initial public offer
(b) further public offer of securities to the public by a company
(c) an offer for sale of securities to the public by an existing shareholder
(d) all of above
66. "As per Section 25, it shall be evidence that an allotment of, or an agreement to allot,
securities was made
with a view to the securities being offered for sale to the public if it is shown"
(a) " that an offer of the securities or of any of them for sale to the public was made
within six months after the allotment or agreement to allot"
(b) "that at the date when the offer was made, the whole consideration to be received by
the company inrespect of the securities had not been received by it"
(c) either a or b
(d) both a and b
67. "Where a company allots or agrees to allot any securities of the company with a view to
all or any of those securities being offered for sale to the public, any document by which
the offer for sale to the public is made shall, for all purposes, be treated as"
(a) Prospectus (c) Shelf Prospectus
(b) Deemed Prospectus (d) Red Herring Prospectus
68. "No prospectus shall be valid if it is issued after the date on which a copy thereof is
delivered to the Registrar"
24 Navkar Institute
(a) More than 30 days (c) More than 90 days

(b) More than 60 days (d) More than 120 days
69. No prospectus shall be issued by or on behalf of a company or in relation to an intended
company unless
(a) It has been delivered to Registrar for registration
(b) "a copy thereof signed by every person who is named therein as a director or proposed
director of the company or by his duly authorised attorney"
(c) both a and b
(d) either a or b
70. "A prospectus issued under sub-section (1) of Section 26 shall not include a statement
purporting to be
made by an expert unless"
(a) "expert is a person who is not, and has not been, engaged or interested in the formation
or promotion or management, of the company"
(b) expert has given his written consent to the issue of the prospectus
(c) "expert has not withdrawn such consent before the delivery of a copy of the prospectus
to the Registrar for registration and a statement to that effect shall be included in
the prospectus"
(d) all of above
71. Every prospectus issued shall, on the face of it
(a) state that a copy has been delivered for registration to the Registrar
(b) "specify any documents required by this section to be attached to the copy so delivered
or refer to statements included in the prospectus which specify these documents"
(c) either a o r b
(d) both a and b
72. " A company shall not, at any time, vary the terms of a contract referred to in the
prospectus or objects for
which the prospectus was issued, unless"
(a) Approval through members by Special Resolution has been obtained
(b) Approval through members by Ordinary Resolution has been obtained
(c) Approval through Tribunal has been obtained
(d) Approval through Central Government has been obtained
73. "Those shareholders who have not agreed to the proposal to vary the terms of contracts
or objects referred to in the prospectus, shall be given an exit offer by promoters or
controlling shareholders, shall be termed as"
(a) Dissenting shareholders (b) Requisitionist
(c) Exiting shareholders (d) Revolutionary Shareholders

74. "Where the company has raised money from public through prospectus and has any
unutilized amount out of the money so raised, it shall not vary the terms of contracts
referred to in the prospectus or objects for which the prospectus was issued except
by passing a special resolution through postal ballot and the notice of the proposed
special resolution shall contain certain particulars, which shall not include the
following particular"
(a) the original purpose or object of the Issue
(b) the total money raised
(c) the money utilised for the objects of the company stated in the prospectus
(d) the extent of achievement of proposed objects(that is fifty percent, sixty percent,
etc.
(e) None of above
75. "Where the company has raised money from public through prospectus and has any unutilized
amount out of the money so raised, it shall not vary the terms of contracts referred to in
the prospectus or objects for which the prospectus was issued except by passing a special
resolution through postal ballot and the notice of the proposed special resolution shall
contain certain particulars, which shall not include the following particular"
(a) the unutilised amount out of the money so raised through prospectus
(b) "the particulars of the proposed variation in the terms of contracts referred to in the
prospectus or objects for which prospectus was issued"
(c) the reason and justification for seeking variation
(d) the fact that approval for SEBI for exit price has been achieved
76. "The advertisement of the notice for getting the resolution passed for varying the terms of
any contract referred to in the prospectus or altering the objects for which the prospectus
was issued, shall be in"
(a) Form PAS-1 (c) FormPAS-2
(b) Form PAS-3 (d) Form PAS-4
77. "Where certain members of a company propose, in consultation with the Board of Directors
to offer, in accordance with the provisions of any law for the time being in force, whole
or part of their holding of shares to the public, they may do so in accordance with such
procedure as may be prescribed as per"
(a) Section 28 read with Rule 6 of Companies (Prospectus and Allotment of Securities)
Rules, 2014
(b) Section 28 read with Rule 7 of Companies (Prospectus and Allotment of Securities)
Rules, 2014
(c) Section 28 read with Rule 8 of Companies (Prospectus and Allotment of Securities)
Rules, 2014
(d) Section 27 read with Rule 8 of Companies (Prospectus and Allotment of Securities)
Rules, 2014
26 Navkar Institute
78. As per Section 28, any document by which the offer of sale to the public is made shall be
(a) Deemed Prospectus issued by concerned shareholder
(b) Deemed prospectus as stated u/s 25
(c) Deemed to be a prospectus issued by the company
(d) None of above
79. "The members, whether individuals or bodies corporate or both, whose shares are proposed
to be offered to the public, shall"
(a) "collectively authorise the company, whose shares are offered for sale to the public,
to take all actions in respect of offer of sale"
(b) No need to reimburse the company all expenses incurred by it
(c) Ensure publication by company on their behalf
(d) State that for any frau in prospectus, they shall be collectively liable to aggrieved
parties
80. " Which out of the following companies shall issue the securities only in dematerialised
form by complying with the provisions of the Depositories Act, 1996"
(a) every company making public offer
(b) every company issuing securities to Qualified Institutional buyers
(c) every company issuing securities as private placement
(d) all of above
81. "As per Section 30, where an advertisement of any prospectus of a company is published in
any manner, it shall be necessary to specify therein"
(a) the contents of its memorandum as regards the objects
(b) the liability of members
(c) the amount of share capital of the company
(d) the names of the signatories to the memorandum and the number of shares subscribed
for by them
(e) All of above
82. "Any class or classes of companies, as the Securities and Exchange Board may provide, may
file a with the Registrar at the stage of the first offer of securities included therein which
shall indicate a period not exceeding one year as the period of validity of such prospectus"
(a) Statement in lieu of prospectus (c) Shelf Prospectus
(b) Offer letter for private placement (d) Deemed Prospectus
83. " A company filing a shelf prospectus shall be required to file a document containing all
material facts relating to new charges created, changes in the financial position of the
company as have occurred between the first offer of securities or the previous offer of
securities and the succeeding offer of securities, such document is termed as"
(a) Information Memorandum (c) Statement in Lieu of prospectus
(b) Memorandum (d) deemed prospectus

84. "Extra Ordinary General Meeting may be convened by giving shorter notice provided
consent has been
obtained from"
(a) Atleast 95% of the members entitled to vote
(b) Majority in numbers having 95% of the paid up share capital having voting power
(c) Majority in numbers having 95% of the paid up share capital
(d) Consent of 100% of members
85. " A prospectus in respect of which the securities or class of securities included therein are
issued for subscription in one or more issues over a certain period without the issue of a
further prospectus"
(b) Offer letter for private placement (d) Deemed Prospectus
86. The notice of the general meeting of the company shall be simultaneously
(a) Dispatched to ROC for its records
(b) Dispatched to Central Government for its records
(c) Placed on website of company on the website as may be notified by the Central
Government.
(d) Placed on website, if any of company on the website as may be notified by the Central
Government
87. Form used for preparation of Information Memorandum shall be
(a) Form PAS-1 (b) Form PAS-2 (c) FormPAS-3 (d) Form PAS-4
88. "The information memorandum shall be filed with the Registrar along with the fee as
provided in the Companies (Registration Offices and Fees) Rules, 2014 within prior to the
issue of a second or subsequent offer of securities under the shelf prospectus"
(a) 1 month (b) 2 month (c) 3 month (d) 4 month
89. A company proposing to issue a red herring prospectus shall file it with the Registrar
(a) at least 3 days prior to the opening of the subscription list and the offer
(b) at least 7 days prior to the opening of the subscription list and the offer
(c) at least 5 days prior to the opening of the subscription list and the offer
(d) at least 10 days prior to the opening of the subscription list and the offer
90. " A red herring prospectus shall carry the same obligations as are applicable to a prospectus and any
variation between the red herring prospectus and a prospectus shall be"
(a) highlighted as variations in the prospectus
(b) Intimated as variation to Registrar
(c) highlighted as variations in copy to be published to public
(D) None of above
91. " A prospectus which does not include complete particulars of the quantum or price of the securities
included therein"
28 Navkar Institute

(b) Red Herring Prospectus (d) Deemed Prospectus
92. "As per Section 33, No form of application for the purchase of any of the securities of a
company shall be issued unless such form is accompanied by"
(a) Abridged prospectus (c) Statement in lieu of prospectus
(b) Shelf Prospectus (d) Information memorandum
93. "As per Section 2(1), a memorandum containing such salient features of a prospectus as may
be specified by the Securities and Exchange Board, shall be termed as"
(a) Abridged prospectus (c) Statement in lieu of prospectus
(b) Shelf Prospectus (d) Information memorandum
94. " Any person who, either knowingly or recklessly makes any statement, promise or forecast
which is false, deceptive or misleading, or deliberately conceals any material facts, to induce
another person to enter into, or to offer to enter into, any agreement for, or with a view to,
obtaining credit facilities from any bank or financial institution, shall be liable for"
(a) Penalty of minimum ₹ 1,00,000 (c) Action u/s 447
(b) Penalty of minimum ₹ 50,000 (d) Imprisonment upto 6 months
95. A person shall be liable u/s 447 as pre the provisions of Section 38, if any person
(a) " makes or abets making of an application in a fictitious name to a company for acquiring, or
subscribing for, its securities"
(b) "makes or abets making of multiple applications to a company in different names or
in different combinations of his name or surname for acquiring or subscribing for its
securities"
(c) "otherwise induces directly or indirectly a company to allot, or register any transfer
of, securities to him, or to any other person in a fictitious name"
(d) All of above
96. Where a person has been convicted under section 38, the Court may order
(a) Attachment of assets
(b) Forfeiture of security
(c) "disgorgement of gain, if any, made by, and seizure and disposal of the securities in
possession of, such person"
(d) Imprisonment upto 1 year
97. The amount received through disgorgement or disposal of securities u/s 38 shall be
(a) Credited to the Investor Education and Protection Fund
(b) Credited to Fund established by Central Government for benefit of investors
(c) Central Government benevolent fund
(d) None of above
98. "While computing the number of investors to whom private placement can be made,
following shall be excluded"

(a) Qualified Institutional Buyers

(b) Employees
(c) Promoters
99. "Any offer or invitation to subscribe or issue of securities to a select group of persons by a
company (other than by way of public offer) shall be termed as"
(a) Private Placement (c) Public Offering
(b) Qualified Institutional Placement (d) Promoters contributions
100. "If a company, listed or unlisted, makes an offer to allot or invites subscription, or allots, or
enters into an agreement to allot, securities to more than the prescribed number of persons,
whether the payment for the securities has been received or not or whether the company
intends to list its securities or not on any recognised stock exchange in or outside India, the
same shall be deemed to be an"
(a) Private placement offer letter (c) Letter inviting offer from public
(b) Offer to public (d) None of above
101. " As per Section 42, A company making any allotment of securities under this section, shall
file with the Registrar a return of allotment within from the date of the allotment"
(a) 15 Days (b) 30 Days (c) 45 Days (d) 60 Days
102. Which out of the following is incorrect in relation to issue of capital through GDR u/s 41
(a) " The Board of Directors of the company intending to issue depository receipts shall pass a resolution
authorising the company to do so"
(b) "The company shall take prior approval of its shareholders by a special resolution to be passed at a
general meeting"
(c) "The company shall ensure that all the applicable provisions of the Scheme and the rules or
regulations or guidelines issued by the Reserve Bank of India are complied with before and
after the issue of depository receipts"
(d) "Committee of the Board of directors shall have l/3rd of directors as independent director in case the
company is required to have independent directors"
103. "Dwapar Equipment Finance Limited, a non-banking finance company (NBFC), is desirous of
offering secured, redeemable, non-convertible 9% Debentures to the public in three or more
tranches over a certain period of time. Which kind of prospectus it is required to issue so
that its purpose is served and there arises no need to take out a fresh prospectus for second
and subsequent offer of securities."
(a) Deemed prospectus. (c) Red Herring Prospectus.
(b) Shelf Prospectus. (d) Abridged Prospectus.

30 Navkar Institute
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
(d) (a) (a) (b) (c) (c) (a) (d) (d) (b) (a) (c) (d) (a) (b)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(a) (a) (c) (a) (b) (a) (a) (a) (c) (c) (b) (d) (b) (a) (a)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(a) (d) (b) (a) (a) (a) (c) (d) (a) (c) (b) (d) (c) (d) (c)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(d) (c) (d) (c) (b) (c) (c) (d) (b) (c) (a) (d) (c) (c) (c)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(b) (c) (d) (d) (d) (c) (b) (c) (c) (d) (d) (a) (a) (e) (d)
76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90.
(a) (c) (c) (a) (a) (e) (c) (a) (b) (c) (d) (b) (a) (a) (a)
91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103.
(b) (a) (a) (c) (d) (c) (a) (c) (a) (a) (a) (d) (e)

CHAPTER-4 Share Capital and Debentures
CHAPTER-4
Share Capital and Debentures
1. Minimum________________% of preference shares should be redeemed every year.

(a) 20%. (b) 30%. (c) 5%. (d) 10%.
2. Premium if any, payable on redemption, must be provided_________shares are redeemed.
(a) After. (b) Before. (c) When. (d) On.
3. Within How many days of redemption should a company give a notice to the ROC?
(a) 20days. (b) 30days. (c) 40days. (d) 50days.
4. After providing premium to preference shareholders, the balance in CRR is used to issue_.
(a) Fully paid bonus shares. (c) Fully paid equity shares.
(b) Fully paid shares. (d) Fully paid preference shares.
5. Preference shares can be redeemed only out of
(a) Profits of the company. (c) Divisible Profits.
(b) Company's Security Premium A/c. (d) Capital Redemption Reserve A/c.
6. Shares can be issued at discount only as per ____________provisions.
(a) Issue of Preference shares (c) Issue of Sweat equity shares
(b) Issue of equity shares (d) All of the above
7. The allotment of sweat equity shares can be within________months from the date of passing
the Special Resolution.
(a) 1O months. (b) 11 months. (c) 9 months. (d) 12 months.
8. The sweat equity shares of_company should be issued in accordance with SEBI guidelines.
(a) Listed company. (c) Nidhi Company.
(b) Unlisted company. (d) Sec.8 Company.
9. The sweat equity shares of_____company should be issued in accordance with Companies
Rules 2014 guidelines.
(a) Listed company. (c) Nidhi Company.
(b) Unlisted company. (d) Sec.8 Company.
10. What is the fine charged on a company if it issues shares at discount?
(a) Fine of minimum 5, 00,000 & maximum 10, 00,000.
(b) Fine of minimum 10, 00,000 & maximum 20, 00,000.
(c) Fine of minimum 1, 00,000 & maximum 5, 00,000.
(d) Fine of minimum 15, 00,000 & maximum 25, 00,000.
11. What is the annual ceiling limit on sweat equity issue?
(a) Shares of issue value 5 crores.
(b) 15% of existing paid up equity share capital.
(c) Shares of issue value 5 crores or 15% of existing paid up equity share capital whichever
is less.
32 Navkar Institute
(d) Shares of issue value 5 crores or 15% of existing paid up equity share capital whichever is higher.
12. Sweat equity shares issued shall be locked in for a period of_years from the date of allotment.
(a) 3 years. (b) 1 year. (c) 2 years. (d) 5 years.
13. The ________ shares issued to directors/managers is treated as managerial remuneration.
(a) Sweat equity shares. (c) Capital surplus.
(b) Preferred stock. (d) Retained earnings
14. A Start Up Company as per notification by Ministry of Commerce & Industry may issue
sweat equity shares _% of its paid up capital.
(a) Exceeding 40%. (c) Exceeding 50%.
(b) Not exceeding 40%. (d) Not exceeding 50%.
15. Which of the following forms shall maintain a register of sweat equity shares?
(a) Form No SH.l. (c) FormNoSH.2.
(b) FormNoSH.3. (d) FormNoSH.4.
16. Letter of offer/notice shall be despatched to existing share holders______days before opening
of the issue.
(a) 3 days. (b) 4 days. (c) 6 days. (d) 7 days.
17. How will the shareholders of a public company issue ESOS?
(a) By passing Special Resolution. (c) By passing Written Resolution.
(b) By passing Ordinary Resolution. (d) By passing Oral Resolution.
18. How will the shareholders of a private company issue ESOS?
(a) By passing Special Resolution. (c) By passing Written Resolution.
(b) By passing Ordinary Resolution. (d) By passing Oral Resolution.
19. The register of employee stock options should be in
(a) FormNo.SH.2. (c) FormNo.SH.5.
(b) FormNo.SH.4. (d) FormNo.SH.6.
20. The transfer deed (after stamping, dating and signing) shall be submitted to the company
within of execution
(a) 30 days (b) 45 days (c) 60 days (D) 90 days
21. A company can issue the equity shares with differential rights only if it has not defaulted
in filling financial statements and annual returns for immediately proceeding_________ .
(a) Financial year (c) 3 financial years
(b) 2 financial years (d) 5 years
22. The issue ESOP scheme shall be approved by the shareholders of the company by
passing_________
(a) An ordinary resolution (c) An unanimous resolution
(b) An special resolution (d) None of these
23. The rights attached to the shares of any class may be varied if ________is passed at a
separate meeting of the holders the issued shares of that class.


(b) An special resolution (d) None of these
24. The rights attached to the shares of any class may be varied with the consent in writing of
the holders of not less than ______of the issued shares of that class.
(a) One- half (c) Two-third
(b) One-third (d) Three-fourth
25. ________is required for issue of shares with differential rights as to dividend ,voting or
otherwise.
(b) An special resolution (d) An Board resolution
26. A special resoluation passed for by a company authorising it to issue sweat equity shares
shall be valid for making the allotment within a period of not more than _____ from the date
of passing SR.
(a) 6 month (b) 12 months (c) 2 years (d) 3 years
27. A company van issue the equity shares with differential rights only if it not been penalized
by Court or Tribunal during the last three years ,of any offence under ________.
(a) THE COMPANIES ACT,2013
(b) THE PREVENTIION OF MONEY LAUNDRING ACT,2002
(c) THE INDIAN PENAL CODE ,1860
(d) None of these
28. The ratio of debt (secured as well as unsecured debt) owed by the company must not be
more than .....the aggregate of paid up capital and free reserves........... the buy-back
(a) Twice; before (c) Thrice; before
(b) Twice; after (d) Thrice;after
29. ________means such part of the capital,which has been called for payment.
(a) authorised capital (c) subscribed capital
(b) issued capital (d) called-up capital
30. "A transfer deed is submitted to the company by the transferor and the shares are partly
paid up. The company gives a notice of the same to the transferee. The transferee has the
right to object to the proposed transfer within"
(a) 30 days (b) 2 weeks (c) 6 weeks (d) 2 months
31. In no case the tenure of secyre debenture shall exceed___________
32. One of the modes of alteration of capital clause of memorandum is to sub-divided the
shares into shares of_________amount than its existing shares
(a) Smaller (c) Either (a) or (b)
(b) Larger (d) None of these
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33. On a poll , the voting right of every equity share holder shall be ________
(a) Based on the principle of one vote for every member
(b) Based on the principle of one vote for every member, if so provided by the articles
(c) In proportion to his share in the paid up equity share capital of the company
(d) In proportion to his share in the paid up preference share capital of the company
34. The buy-back shall be completed within ......of passing the resolution for buy-back.
(a) 3 months (b) 6 months (c) 9 months (d) 1 year
35. _____________may issue secured debenture for a period exceeding 10 years but not exceeding
30 years
(a) Any company (c) asset reconstruction company
(b) infrastructure finance company (d) Both (b) and (c)
36. A person shall not be appointed as a debenture trustee if he is relative of ________or any
person who is in employment of the company as ________
(a) Any promoter;A director
(b) Any member;A director
(c) Any Promoter;A Director or Key managerial personnel
(d) Any Member;A Director or Key managerial personnel
37. Offer of further shares by a company to all its existing shareholders in proportion to the
paid up share capital held by them is called as
(a) Bonus issue (c) Public issue
(b) Right issue (d) None of these
38. Every share shall be distinguished by ___________
(a) The date of its issue (c) BOTH (A) & (B)
(b) The amount paid up (d) Its distinctive number
39. Where a private company gives a notice of refusal to transfer the securities, the transferee
may, within ......of receipt of the notice of refusal, file an appeal with the Tribunal
40. After completion of buy-back, the company shall, within.......file a return containing such
particulars relating to buyback as may be prescribed .
41. A meeting of the all the debenture holders shall be convened by the debenture trustee on
requisition in writing signed by debenture holders holding at least_________ in value of the
debenture for the time being outstanding.
(a) 1/5th (b) 1/10th (c) 1/20th (d) 1/3rd
42. The letter of offer of a right issue shall be despatched to all the existing shareholders at
least..... before the opening of the issue

43. A company may issue equity shares with differential rights as to dividend, voting or otherwise
, only if it is authorised by _________.
(a) The central government (c) The tribunal
(b) The court (d) Its Articles
44. A nomination may canceled or varried by filling by Form No._______
(a) SH-12 (b) SH-13 (c) SH-14 (d) SH-15
45. "One of the modes of alteration of capital clause of memorandum is to consolidate and
divide the share capital in to shares of....... amount than it existing shares"
(a) Smaller (c) Either (a) or (b)
(b) Larger (d) None of these
46. In case of transfer of shares, the share certificate shall be delivered by the company within
(a) 1 month of receipt of transfer deed
(b) 1 month of effecting transfer of shares
(c) 2 months of receipt of transfer deed
(d) 2 months of effecting transfer of shares
47. The application for transfer of securities must be made in Form
(a) SH-3 (b) SH-4 (c) SH-5 (d) SH-6
48. If the dividend on any class of preference shares is not paid for __________or more ,then ,
every preference share holder of such class shall have a right to vote on every resolution
placed before the company .
49. Every preference share holder shall have a right to vote _
(a) On such resoluations which directly affect his rights
(b) On any resolution for the winding up of the company
(c) On the resolution for the repayment or reduction of share capital
(d) All of these
50. In case of unlisted companies,The duplicate share certificate shall be issued within_______of
submission of complete documents with the company
(a) 1 month (b) 2 months (c) 2 months (d) 6 months
51. Where a company passes the necessary resolution for variation of rights attached to the
shares of any class, the dissenting shareholders, if they are eligible , may , within ____________,
make an application to the tribunal to cancel such variation.
52. A person shall not be appointed as a debenture trustee if he has any pecuniary relationship
with the company amounting to__________or more of its gross turnover or total income
or ____________or such higher amount as may be prescribed which ever is lower during to
immediately preceeding financial year or during the current financial year
(a) 1%,Rs.50 lakh (b) 2%,Rs.50 lakh
36 Navkar Institute
(c) 1%,Rs.20 lakh (d) 2%,Rs.20 lakh

53. The company dhall extiguish and physically destroy the shares bought back with in __________
of complition of buy back.
54. Where a public company refuses to transfer the securities, the transferee may, within.......
with the Tribunal
55. _______ means such capital as is authorised by the memorandum of a company to be the
maximum amount of share capital of the company.
56. In case of any allotment of debentures, the share certificate shall be delivered by the
company within
(a) 3 months of receipt of application (c) 6 months of receipt ofapplication
(b) 3 months of allotment (d) 6 months of allotment
57. Statement 1: A call shall be made uniformly on all the shares falling under the same class
Statement 2: The shares on which different amounts have been paid up shall be deemed to
be the shares falling under the same class.
(a) Only statement 1 is correct (c) Both the statements are correct
(b) Only statement 2 is correct (d) None of the statements are correct
58. "Further offer of buy-back shall not be given within......... of closure of preceding offer of
buy-back."
59. The debenture trustee(s) may be provide with such exemption(s) as may be agreed upon by
a majority of debenture holders not less than_________of total debentures
(a) 2/3in value (c) 1/3 in value
(b) 3/4 in value (d) None of these
60. Where a private company refuses to register the transfer of any securities, it shall give a
notice of such refusal to the transferor and the transferee, within___________ from the date
on which the transfer deed was delivered to the company.
61. __________can become member of a company
(a) A co-operative soc. (c) Joint holder
(b) Foreigner (d) All of these
62. A company can issue the equity shares with differential rights only if it has consistant
tracks record of distributable profits for the last ______________.
(a) 2years (b) 3 years (c) 5years (d) 7 years

63. "Where a private company refuses to register the transfer of any securities, but does not
send any notice of refusal, the transferee may, within ............of delivery of the transfer deed,
file an appeal with the Tribunal"
64. A company may alter the capital clause of memorandum by
(a) Passing a ordinary resolution
(b) Passing a special resolution
(c) Passing a ordinary resolution and obtaining approval of the Central Government
(d) Passing a special resolution and obtaining approval of the Central Government
65. Statement(1):where a company issues a prospectus, the appointment of one or more
debenture trustee is mandatory
Statement (2):where a company makes an offer or invitation to public , the appointment of
one or more debenture trustee is mandatory
(a) Only Statement(1) is correct (c) Both the statement is correct
(b) Only Statement(2) is correct (d) None of the statements are correct
66. _________can become member of a company
(a) Partnership firm (c) Trust
(b) LLP (d) Insolvent
67. A share certificate is a ________ of the fact that the person named therein is the owner of
such number of shares as are specified therein
(a) Conclusive (c) Persuasive evidence
(b) Prima facie evidence (d) Circumstantial evidence
68. Where a public company refuses to register the transfer of any securities, but does not need
any notice of refusal, the transferee may, within ............of delivery of the transfer deed, file
an appeal with the Tribunal
69. _______means such capital as the company issues from time to time for subscription.
70. A company may issue debentures with an option to convert them into shares, provided such
issue is approved by passing_______
(b) An special resolution (d) An Board resolution
71. _______may issue secured debenture for a period exceeding 10 years but not exceeding 30
years
(a) Companies engaged in setting up of infrastructure projects
(b) infrastructure debt fund Non-Banking financial companies
(c) Companies permitted by a Ministry or Department of the Central Government or by
38 Navkar Institute
RBI or by the National Housing Bank or by any othr=er statutory authority

(d) any of these
72. A company may issue the preference shares only if it is authorised by
(a) The Central Government (c) The Tribunal
(b) The Court (d) Its articles
73. A company may accept calls in advance only if it is authorised by________ .
(a) The central government (c) The tribunal
(b) The court (d) Its Articles
74. Where a company makes an offer to its members exceeding __________in numbers the
appointment of ONE or more debenture trustee is Mandatory
(a) 100 (b) 200 (c) 250 (d) 500
75. The secured debentures shall be secured by the creation of a charge on the asset of the_______
having a value which is sufficient for the repayment of the amount of the debentures and
interest there on.
(a) The company
(b) Its Subsidiaries or its Holding company
(c) Its Associates company
(d) any of these
76. Any holder of security may make nomination by filling Form No.__________
(a) SH-12 (b) SH-13 (c) SH-14 (d) SH-15
77. The shares with differential rights shall not exceed_________of the total post-issue paid up
equity share capital(including equity shares with differential rights issued at any point of
time.)
(a) 25% (b) 26% (C) 50% (D) 51%
78. The company shall , on or before the 30th day of april in each year , invest or deposit , as
a case may be ,a sum which shall not be less than ________of the amount of debenture
maturing up to 31st day of march of the next year, a deposit with any scheduled bank
,unencumbered securities of the central government or state government,etc.
(a) 15% (b) 25% (c) 35% (d) 50%
79. Statement1:A debenture can carry votting rights only if it is secured
Statement 2: A debenture can carry votting rights only if it is convertible in to equity shares
80. At any time, the sweat equity shares shall not exceed of the paid up equity capital of the
company
(a) 10% (b) 20% (c) 25% (d) 50%
81. ________can not become a member of a company.
(a) HUF (b) Company

(c) Government (d) Body Corporate

82. In case of any allotment of shares, the share certificate shall be delivered by the company
within
(a) 1 month of receipt of application
(b) 1 month of allotment
(c) 2 months of receipt of application
(d) 2 months of allotment
83. The "securities premium account" can not be used for ____ .
(a) Writing off the preliminary expenses of the company
(b) Issuing fully paid preliminary expenses bonus shares to the members
(c) Declaring dividend
(d) Writing off the discount allowed on Issue of shares or debentures
84. Where a company passes the necessary resolution for variation of rights attached to the
shares of any class, the holder(s) of such class of shares who hold not less than ___________
shares of such class and who had not consented to such variation or had not voted in favour
, may make an application to the Tribunal to cancel such variation .
(a) 5% (b) 10% (c) 20% (d) 25%
85. Every Equity share holder shall have a right to vote _________________
(a) Only on such resolutions which directly affect his rights
(b) Only on the resolution for the winding up of the company
(c) Only on the resolution for the repayment or reduction of share capital
(d) On every resolution placed before the company
86. "Where the buy-back is authorised by a resolution passed in Board meeting, it shall not
exceed .........of............"
(a) 25%; Aggregate of paid up capital and free reserves
(b) 25%; total paid up equity capital
(c) "25%; aggregate of Paid up equity capital and free reseves"
(d) 10%, aggregate of paid up equity capital and free reseves
87. A company intending to buy-back is securities, shall file with the Registrar a declaration of
solvency stating that it will not be rendered insolvent within next
88. Bonus shares may be issued out of
(a) free reserve
(b) The Securities Premium Account
(c) The Capital Redemption Reserve Account
(d) any of these
89. sweat equity shares can be issued by a company only to ________.
(a) directors of the company (b) employees of the company
40 Navkar Institute
(c) Either (A) or (B) or both (d) None of these

90. In case of allotment of shares to the subscribers to memorandum , the share certificate
shall be delivered by the company within
(a) 1 month of incorporation (c) 2 months of incorporation
(b) 1 month of allotment (d) 2 months of allotment of securitis
91. "Where the buy-back is a uthorised by a special resolution,it shall not exceed......of........."
(a) 25%; Aggregate of paid up capital and free reserves
(b) 25%; total paid up equity capital
(c) "25%; aggregate of Paid up equity capital and free reseves"
(d) 10%, aggregate of paid up equity capital and free reseves
92. A company can effect reduction of capital by
(a) Passing a ordinary resolution
(b) Passing a special resolution
(c) Obtaining the confirmation of the tribunal
(d) Both (b) and (c)
93. A notice of every alteration of capital clause of memorandum shall be given to the Registrar
within___________
94. _________means such part of the capital which is for the time being subscribed by the
members of the company.
95. Unless a company is engaged in infrastructure projects, it cannot issue preference shares
which are redeemable after
96. Where a transfer deed is submitted to the company by the transferor and the shares are
partly paid up, the company Shall give a notice to the transferee in Form No.
(a) SH-3 (b) SH-4 (c) SH-5 (d) SH-6
97. The company shall create DRR equivalent to _________of the value of the outstanding
Debentures.
(a) 15% (b) 25% (c) 35% (d) 50%
98. Statement(1):A person who is a registered holder of shares but does not benificially
holds any shares in a company shall not a appointed as a debenture trustee.
Statement(2): A person who is indebted to the company shall not be appointed as a debenture
trustee

99. ______ Model articles deal with forfeiture of shares.

(a) Table F. (b) Table D. (c) Table C. (d) Table A.
100. Right to recover call money expires _______years after the date of allotment.
(a) 2 years. (b) 3 years. (c) 4 years. (d) 5 years.
101. Which of the following should not be filed with ROC?
(a) Allotment of shares.
(b) Return of Allotment of the Forfeited shares reissued.
(c) Forfeiture of shares.
(d) Return of Allotment of the Forfeited shares.
102. A duly verified declaration in writing stating a share in the company has been duly forfeited
on a date stated in the declaration shall be______evidence.
(a) Conclusive (b) Exclusive. (c) Inclusive. (d) Disclosure.
103. _______is a tool in the company's hands to make defaulting shareholders pay within the
specified time.
(a) Bonafied of shares.
(b) Re issue of shares.
(c) Forfeiture of shares.
(d) By sending them schedules of the amount to be paid.
104. Why doesn't a company pay consideration in exchange of surrendered shares?
(a) They are purchasing their holding company's shares.
(b) They are purchasing HUF company's shares.
(c) They are purchasing their merger company's shares.
(d) It would amount to purchase its own shares.
105. Name the company to which reduction of share capital is applicable
(a) Company limited by shares.
(b) Company limited by guarantee 8i no share capital.
(c) Listed company.
(d) Unlimited company.
106. Reduction of share capital should be authorised by the company's_
(a) Director. (b) ROC. (c) AOC. (d) AOA.
107. The company should make an application to _____ for obtaining a confirm for reduction in
capital.
(a) ROC. (b) NCLT. (c) NLCT. (d) RAC.
108. Tribunal shall send notice of application for capital reduction to_in case of listed company.
(a) CG. (b) ROC. (c) SEBI. (d) Creditors.
109. Who is liable for the punishment u/s for 47?
(a) Any officer of the company who knowingly discloses name of any creditor entitled to
object to the reduction.
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(b) Any officer of the company who knowingly conceals name of any creditor entitled to
object to the reduction.
(c) Any officer of the company who knowingly represents the amount of debt.
(d) Any officer of the company who unknowingly represents the amount of debt.
110. What is the fine charged on a company who fails to comply u/s 66(4) publication of Tribunals
order?
(a) Minimum 5 lakhs, maximum 25 lakhs.
(b) Minimum 4 lakhs, maximum 20 lakhs.
(c) Minimum 3 lakhs, maximum 15 lakhs.
(d) Minimum 2 lakhs, maximum 10 lakhs.
111. _______doesn't amount to reduction of capital.
(a) Depreciation. (c) Depletion.
(b) Appreciation. (d) Diminution.
112. Which of the following cases require confirmation of tribunal?
(a) Reduction of share capital. (c) Diminution of capital.
(b) Alteration of share capital. (d) Depletion of share capital.
113. Diminution denotes cancelation of_______ part of issued capital.
(a) Called. (c) Unpaid.
(b) Uncalled. (d) Unsubscribed.
114. Which of the following involves repayment of surplus capital?
115. _______ requires producing notice to ROC within 30days of cancellation.
116. In which of the following cases Buyback of shares is not applicable to private companies -
(a) If its borrowing from bank is more than 2 times of paid up share capital?
(b) If it's borrowing from bank is less than 2 times of paid up share capital?
(c) If ifs borrowing from bank is more than 3 times of paid up share capital?
(d) If it's borrowing from bank is less than 4 times of paid up share capital?
117. The person who cannot be appointed as trustee to hold shares is
(a) Person holding beneficially 20% or more of the paid up share capital of the company.
(b) Person holding beneficially 10% or less of the paid up share capital of the company.
(c) Person holding beneficially 20% or less of the paid up share capital of the company.
(d) Person holding beneficially 10% or more of the paid up share capital of the company.
118. In which of the following cases of buy back special resolution of members is not required?
(a) Buy back is <10% of the total paid up equity capital 8i free reserves.
(b) Buy back =10% of the total paid up equity capital & free reserves.

(c) Buy back is >10% of the total paid up equity capital 8i free reserves.
(d) Buy back is <20% of the total paid up equity capital 8t free reserves.
119. In which of the following cases of buy back passing of board resolution of members is
sufficient?
(a) Buy back is <10% of the total paid up equity capital 8i free reserves.
(b) Buy back =10% of the total paid up equity capital & free reserves.
(c) Buy back is >10% of the total paid up equity capital & free reserves.
(d) Buy back is <20% of the total paid up equity capital & free reserves.
120. What is Debt equity Ratio?
(a) Secured Debts+Unsecured Debts. Paid up capital + Free Reserves
(b) Secured Debts-Unsecured Debts. Paid up capital + Free Reserves
(c) Secured Debts+Unsecured Debts. Paid up capital - Free Reserves
(d) Secured Debts-Unsecured Debts. Paid up capital - Free Reserves
121. Debt Equity Ratio should not be______after buy back.
(a) Less than 2:1. (c) More than 3:1.
(b) More than 2:1. (d) Less than 3:1.
122. Name the type of companies which should conduct buy back in compliance with Companies
Act,2013.
(a) Private companies & public companies.
(b) Private companies & listed companies.
(c) Public companies & unlisted companies.
(d) Private companies & unlisted companies.
123. The offer for Buy-Buck shall remain open for a period of
(a) Not less than 15 days from the date of despatch of the Letter of Offer.
(b) Not exceeding 30 days from the date of despatch of the Letter of Offer.
(c) Not less than 15 days / Not exceeding 30 days from the date of despatch of the Letter
of Offer.
(d) Not less than 15 days 8i Not exceeding 30 days from the date of despatch of the Letter
of Offer.
124. The company should extinguish & physically destroy the shares/ Securities within_days of
the last date of completion of buy back.
(a) 7 days (b) 8 days. (c) 9 days. (d) 6 days.
125. What is the fine charged on a company for non compliance with Sec.68 SEBI Regulations?
(a) Minimum 1 Lakhs,Maximum 3 Lakhs.
(b) Minimum 3 Lakhs,Maximum 5 Lakhs.
(c) Minimum 5 Lakhs,Maximum 10 Lakhs.
(d) Minimum 10 Lakhs,Maximum 50 Lakhs.
126. ______is necessary for authorising the contemplated reduction of share capital.
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(a) Ordinary Resolution. (c) Written Resolution.

(b) Special Resolution. (d) Oral Resolution.
127. Find out correct statement from the following
(a) reissue of forfeited shares does constitute appropriation out of the unappropriated
capital of the company
(b) reissue of forfeited shares doesnotconstitute appropriation out of the unappropriated
capital of the company
(c) A is true only in the case of govt company
(d) b is true only in the case of OPC
128. Buy back board resolution can only be up to_________
(a) 15 (b) 10 (c) 20 (d) 25
129. The form of annual return is
(a) MTG-10 (b) MTG-8 (c) CG-5 (d) MTG-11
130. Variation of shareholders right is permissible when ______contain no provision in respect to
such variation
(a) MOA (b) AOA (c) both A & B (d) A ORB
131. Every shareholder is not a member unless
(a) he is recommended by any member
(b) his name is entered in the register of members
(c) he participates in any of the previous company meeting
(d) none of these
132. ______specifies the time limit with in which share certificate is to be delivered
(a) sec 110 (b) sec 111 (c) sec 112 (d) sec 113
133. ________is a document showing title
(a) Share certificate (c) Both(a)&(b)
(b) Share warrant (d) None of the above
134. The class of shareholders who have the right to vote on every resolution placed before the
company are :
(a) Equity shareholders
(b) Preference shareholder
(c) Participating shareholders
(d) Non participating shareholder
135. On which of the following grounds the voting right of a shareholder is lost on..............
(a) non payment of calls
(b) non payment of the amount guaranteed by him
(c) being inactive on managerial decisions

136. How is the voting right of a preference shareholder determined.

(a) In proportion to his share in paid up preference capital
(b) In proportion to his share in nominal capital
(c) In proportion to his share in called up capital
(d) In proportion to his share in registered capital
137. Find out which of the following condition is true regarding the voting rights of equity
shareholders are:
(a) voting right shall be in proportion to his share in paid up equity capital
(b) The equity shareholders have the right to vote on every resolution placed before the
company
(c) Voting rights shall not be in proportion to his share in paid up equity capital.
(d) (a) and (b)
138. The exception which is made on equity shareholders in the case of nidhis is that......
(a) No member shall exercise voting on poll in less than 20% of total voting rights
(b) No member shall exercise voting rights on poll in excess of 5 % of total voting rights
(c) No member shall exercise voting rights on poll in excess of 10% of total voting rights
(d) None of the above.
139. When 2 or more persons hold one or more shares in a company jointly, they shall, for the
purpose of membership be treated as
(a) 2 members. (c) No: of persons who hold shares.
(b) Single member. (d) 3 members.
140. What is CIN?
(a) Corporate Identification Number. (c) Corporate Incorporation Number.
(b) Creditors Identification Number. (d) Corporate Identity Number.
141. Who can become a member of the company?
(a) Person who have agreed in writing to become a member.
(b) Person who have agreed orally to become a member.
(c) Person whose name is entered in the Register of Members.
(d) Person who have agreed in writing to become a member &whose name is entered in
the Register of Members
142. Which of the following creates registration of a person as a member of a company?
(a) Application.
(b) Allotment.
(c) Transmission by non operation of law.
(d) Application & Allotment.
143. Transfer of shares by law is referred to as
(a) Transfer of shares. (c) Legal transfer.
(b) Transmission of shares. (d) Illegal transfer.
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144. Which of the following cases require deed?

(a) Transfer of shares. (c) Legal transfer.
(b) Transmission of shares. (d) Illegal transfer.
145. When can a company proceed with registering of the transfer of Partly Paid Shares?
(a) Upon receipt of No-Objection from the equity shareholder.
(b) Upon receipt of No-Objection from any of the shareholder.
(c) Upon receipt of No-Objection from the Transferor.
(d) Upon receipt of No-Objection from the Transferee.
146. A transfer made by the_of the deceased member is valid
(a) Any family member. (c) Spouse.
(b) Legal representative. (d) Daughter or son.
147. For transfer of shares under depository system , where should a depository register?
(a) NCLT. (c) Registered office of the company.
(b) ROC. (d) SEBI.
148. What will SEBI issue to registered depository for transfer of shares upon fulfilment of
prescribed conditions?
(a) Certificate of commencement of business.
(b) Transfer certificate.
(c) Transferred deed.
(d) Transmission deed.
149. What is the role of depository?
(a) Custodial promoters of securities. (c) Custodial agencies of securities.
(b) Custodial agents of securities. (d) Custodial brokers of securities.
150. What happens if a depository transfers shares with an intention to defraud a person?
(a) He is liable under section 447^of comoanies' act 2013.
(b) He is liable under Depositories Act, 1996.
(c) He is liable under section 447 of companies' act 2013 & Depositories Act, 1996.
(d) He is liable under section 447 of companies act 2013/Depositories Act, 1996.
151. Forged transfer doesn't give the transferee concerned_to the shares.
(a) Any possession. (c) Any ownership.
(b) Any title. (d) Any right.
152. Why a bonafide Transferee does from a person who has acquired a blank transfer deed by
fraud doesn't acquire good title to the shares included in the deed?
(a) Transfer deed is not a negotiable instrument.
(b) Transfer deed is a negotiable instrument.
(c) Transfer deed is exchangeable.
(d) Transfer deed is not exchangeable.
153. Where can a company maintain ifs register if special resolution is passed?

(a) `Any place in India in which more than 2/10th of the total members entered in the
register reside.
(b) Any place in India in which more than l/10th of the total members entered in the
register reside.
(c) Any place in India in which more than 3/10th of the total members entered in the
register reside.
(d) Any place in India in which more than 4/10th of the total members entered in the
register reside.
154. Debentures payable to person whose name appears both on Debenture Certificate and
company's register is called as :
(a) Bearer (c) Registered
(b) Unregistered (d) Non transferable bonds
155. Debentures which are issued for a specified period of time and after that the company has
the right to pay back, is termed as :
(a) Convertible debenture (c) Bearer debenture
(b) Irredeemable (d) Redeemable debenture
156. No special resolution is required for a particular type of debenture and they become payable
on maturity, is generally known as
(a) Registered debenture (c) Non-Convertible debenture
(b) Redeemable debenture (d) Secured Debentures
157. Debenture with voting rights can be issued only if permitted by the Articles of Association"
Is the following statement Correct? -
(a) Correct (b) Incorrect
158. Can the following persons be appointed as a Debenture Trustee?
1. A, a Shareholder, who has no beneficial interest.
2. A Creditor whom the Company owes x 499 only.A person who has given a guarantee
for repayment of amount of
3. Debentures issued by the Company.
(a) Can be appointed (1) &(2) cases (c) Can be appointed (1) &(3) cases
(b) Can be appointed (2) &(3) cases (d) Can be appointed in all cases
159. As per Section 2(84) Shares means
(a) share in the share capital of a company, and exclude stock
(b) share in the share capital of a company, and includes stock
(c) share in the share capital of a company, and includes preference share capital
(d) share in the share capital of a company
160. "A company having a share capital may, if so authorised by its articles, issue preference
shares subject to the following conditions"
(a) "the issue of such shares has been authorized by passing a special resolution in the
general meeting of the company"
48 Navkar Institute
(b) "the company, at the time of such issue of preference shares, has no subsisting default in the
redemption of preference shares issued either before or after the commencement of
this Act or in payment of dividend due on any preference shares"
(c) "the company, at the time of such is sue of preference shares, has no subsisting default in the
redemption of preference shares issued either before or after the commencement of
this Act or in payment of dividend due on any preference shares"
(d) both a and b
161. As per Section 47, every member holding a preference share has a right to vote only on
resolutions
(a) which directly affect the rights attached to his preference shares
(b) which may affect their voting right
(c) Which may affect dividend to which they are entitled
(d) On every resolution proposed for reduction of capital
162. Preference Shareholder has Right to Vote on Every Resolution
(a) "If the dividend has remained unpaid for period of 2 consecutive years or more prior to
the date of the commencement of the meeting"
(b) If the dividend has remained unpaid for period of 2 immediate preceding financial year
(c) "If the dividend has remained unpaid for period of 2 years or more prior to the date of the
commencement of the meeting"
(d) "If the dividend has remained unpaid for period of any 2 years or more prior to the date of the
commencement of the meeting"
163. "As per Section 47, the proportion of the voting rights of equity shareholders to the voting
rights of the preference shareholders shall be in the same proportion"
(a) As the preference share bears to the Equity shares
(b) "As the paid-up capital in respect of the equity shares bears to the paid-up capital in
respect of the preference shares"
(c) "As the capital, which has been subscribed in respect of the equity shares bears t o the capital
subscribed in respect of the preference shares"
(d) "As the Authorised capital in respect of the equity shares bears to the Authorised
capital in respect of the preference shares"
164. "Every company limited by shares may issue equity shares with differential rights as to
voting or dividend to the extent of "
(a) 26 per cent of the total share capital issued
(b) "26 per cent of total post-issue paid up equity share capital including equity shares
with differential rights"
(c) 25 per cent of the total share capital issued
(d) 26 per cent of the total paid up capital

165. Which out of the following is not a pre-condition before issue of equity shares with
differential rights
(a) Company must have distributable profits for three financial years preceding such
issue
(b) No default in Repayment of matured Deposits
(c) No default in payment of interest on debentures
(d) No default in compliance of RBI Act, 1934
166. Which out of the following is not a pre-condition before issue of equity shares with
differential rights
(a) Approval of shareholders must be obtained in general meeting by passing an ordinary
resolution
(b) "Company has not defaulted in filling of financial statements or annual returns for 3
FYs preceding the relevant FY"
(c) The Articles of Association must authorize the issue of such equity shares
(d) No default in compliance of SECRA provisions
167. "Which out of the following is not a pre-condition before issue of equity shares with
differential rights "
(a) No default in Payment of dividend on preference shares
(b) No default in Statutory payments relating to its employees or to any authority
(c) "No default in Crediting the amount in Investor Education and Protection Fund to the Central
Government"
(d) No default in compliance of Foreign Trade Regulation Act
168. Which out of the following is incorrect in relation to issue of share certificate
(a) It shall be issued under the common seal of company, if any
(b) It shall be conclusive evidence of the title of the person to such shares
(c) "A duplicate certificate of shares may be issued, if such certificate is proved to have
been lost or destroyed"
(d) "A duplicate certificate of shares may be issued, if such certificate is defaced, mutilated
or torn and is surrendered to the company"
169. Every share certificate shall be issued as per
(a) FormSH-1 (b) Form SH-4 (c) FormSH-5 (d) Form SH-6
170. Which out of following section authorise Payment of dividend in proportion to amount paid
up
(a) Section 49 (b) Section 50 (c) Section 51 (d) Section 52
171. Which out of following is incorrect in relation to issue of security at premium
(a) No prior authorization is required as per AOA
(b) "Ordinary resolution shall be required for issue of securities at premium irrespective
of amount of premium"
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(c) Amount of premium can be used for issue of fully paid bonus shares
(d) "Amount of premium can be used for the purchase of its own shares or other securities
under section 68"
172. As per Section 53, A company may issue shares at a discount to its creditors when
(a) its debt is converted into shares in pursuance of any statutory resolution plan
(b) "debt restructuring scheme in accordance with any guidelines or directions or
regulations specified by the Reserve Bank of India under the Reserve Bank of India
Act, 1934 or the Banking (Regulation Act, 1949"
(c) both a and b
(d) either a or b
173. "In case of any non-compliance of Section 53, such company and every officer who is in
default shall be liable to a penalty which may extend to"
(a) "an amount equal to the amount raised through the issue of shares at a discount or
25 lakh rupees, whichever is less"
(b) "an amount equal to the amount raised through the issue of shares at a discount or
five lakh rupees, whichever is more"
(c) "an amount equal to the amount raised through the issue of shares at a discount or
five lakh rupees, whichever is less"
(d) "an amount equal to the amount raised through the issue of shares at a discount or 2
lakh rupees, whichever is less"
174. "Shares which are issued to the employees or directors for providing know-how to the
company or for making available to the company the rights in the nature of intellectual
property rights or value additions shall be termed as"
(a) Employees Stock Option (c) Sweet Equity Shares
(b) Warrant issued to employees (d) Sweat Equity Shares
175. Which out of the following is incorrect in relation to issue of sweat equity shares u/s 54
(a) "Sweat equity shares to be issued by the company should pertain to the class of
shares which the company has already issued."
(b) "not less than one year has, at the date of such issue, elapsed since the date on which
the company had commenced business"
(c) "Regulation framed by SEBI shall be duly complied with in case shares of a company
are listed on a recognized stock exchange"
(d) Authorized by a special resolution in GM is required
(a) "The company shall not issue sweat equity shares for more than fifteen percent of the
existing paid up equity share capital in a year or shares of the issue value of rupees
five crores, whichever is higher:"

(b) "issuance of sweat equity shares in the Company shall not exceed twenty five percent,
of the paid up equity capital of the Company at any time"
(c) "startup company may issue sweat equity shares not exceeding fifty percent of its
paid up capital upto five years from the date of its incorporation or registration"
(d) "The sweat equity shares issued to directors or employees shall be locked in/non
transferable for a period of 1 year from the date of allotment"
(a) "It means the shares issued by the company to its employees or directors at a discount or for
consideration other than cash."
(b) "These shares are issued to the employees or directors for providing know-how to
the company or for making available to the company the rights in the nature of
intellectual property rights or value additions"
(c) These shares to be issued to any employee of the company who has been working in
India
(d) These shares to be issued to a director of the company, whether a whole time director
or not
178. Any issue of Bonus issue shall be as per the provisions of
179. Which out of the following is correct in relation to issue of bonus shares by company
(a) No need to have an authorisation from Article
(b) Board Resolution shall be passed for any such bonus issue
(c) Bonus may be issued out of Capital Redemption reserve or any other capital reserve
(d) "Company has not defaulted in payment of interest or principal in respect of fixed
deposits or debt securities issued by it"
180. Which out of the following is not correct in relation to making of call by company
(a) The call must be made by a resolution Passed by members
(b) Calls shall be made on a uniform basis, on all shares, falling under the same class.
(c) "Shares of the same nominal value on which different amounts have been paid up
shall not be deemed to fall under the same class"
(d) The call must be made strictly in accordance with the provisions of the articles of the
company
181. Which out of following shall be true in relation to calls in advance
(a) Company may accept calls in advance only if it is authorised by Article of company
(b) "The shareholder is not entitled to voting rights in respect of the moneys so paid by
him until the same is called up"
(c) The amount received in advance of calls is refundable.
(d) I"In the event of winding up the shareholder ranks after the creditors, but must be
paid his amount with interest, if any before the other shareholders are paid off."
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182. Company engaged in infrastructure projects may issue Preference shares for a period
(a) period exceeding 20 years
(b) period exceeding 20 years and upto 30 years
(c) period exceeding 20 years and upto50 years
(d) period exceeding 20 years and upto40 years
183. "Where a company is not in a position to redeem any preference shares issue further redeemable
preference shares equal to the amount due in respect of the unredeemed preference shares
provided"
(a) Consent has been obtained from holders of three-fourths in value of such preference
shares
(b) with the approval of the Tribunal on a petition made by it in this behalf
(c) Approval of members in general meeting
(d) Both a and b
184. Which out of following is correct in relation to Redemption of Preference share capital
(a) "Any such redemption shall not be deemed to be an increase or, as the case may be, a
reduction, in the share capital of the company"
(b) "Tribunal shall, while giving approval for issue of further preference shares for
redemption under this section, order the redemption forthwith of preference shares
held by such persons who have not consented to the issue of further redeemable
preference shares"
(c) "where such shares are proposed to be redeemed out of the profits of the company,
there shall, out of such profits, be transferred, a sum equal to the nominal amount of
the shares to be redeemed, to a reserve, to be called the Capital Redemption Reserve
Account,"
'(d) All of above
185. "If any person deceitfully personates as an owner of any security and thereby obtains any
such security, he shall be punishable with"
(a) "imprisonment for a term which shall not be less than one year but which may extend
to three years and with fine which shall not be less than one lakh rupees but which
may extend to five lakh rupees."
(b) Penalty as prescribed u/s 447
(c) "imprisonment for a term which shall not be less than 6 months and with fine which
shall not be less than one lakh rupees but which may extend to five lakh rupees"
(d) "imprisonment for a term which shall not be less than one year but which may extend
to five years and with fine which shall not be less than one lakh rupees but which
may extend to five lakh rupees."
186. "Where any notice, advertisement or other official publication, or any business letter,
billhead or letter paper of a company contains a statement of the amount of the authorised

capital of the company, such notice, advertisement or other official publication, or such
letter, billhead or letter paper shall also contain"
(a) "a statement, in an equally prominent position and in equally conspicuous characters,
of the amount of the capital which has been paid-up."
(b) "a statement, in an equally prominent position and in equally conspicuous characters,
of the amount of the capital which has been subscribed."
(c) "a statement, in an equally prominent position and in equally conspicuous characters,
of the amount of the capital which has been subscribed and the amount paid-up"
(d) "a statement, in an equally prominent position and in equally conspicuous characters,
of the amount of the capital which has been called up"
187. As per the provisions of Section 44
(a) "The shares or debentures or other interest of any member in a company shall be
movable property transferable in the manner provided by the articles of the company."
(b) The shares or debentures or other interest of any member in a company shall be freely
transferable
(c) The shares or debentures shall be backed by share certificate or debenture certificate
(d) None of above
188. Every share in a company having a share capital shall be distinguished by its
(a) Share certificate number (c) Distinctive number
(b) Registered folio number (d) Serial number
189. "As per section 48, where a share capital of the company is divided into different classes of shares, the
rights attached to the shares of any class may be varied"
(a) "with the consent in writing of the holders of not less than three-fourths of the
issued shares of that class or by means of a special resolution passed at a separate
meeting of the holders of the issued shares of that class"
(b) if provision with respect to such variation is contained in the memorandum or articles
of the company
(c) "if variation by one class of shareholders affects the rights of any other class of
shareholders, the consent of three-fourths of such other class of shareholders shall
also be obtained"
(d) All of above
190. Holder of …………… Shares may apply against the decision of variation of right as passed u/s
48
(a) "Not less than 10% of the issued shares of a class who did not consent to such
variation or vote in favour of the special resolution for the variation"
(b) "Not less than 15% of the issued shares of a class who did not consent to such
variation or vote in favour of the special resolution for the variation"
(c) "Not less than 5% of the issued shares of a class who did not consent to
54 Navkar Institute
such variation or vote in favour of the special resolution for the variation"
(d) Not less than 10% of the issued shares
191. Any appeal against the decision passed u/s 48 shall be filed with tribunal within
(a) 15 days after the date on which the consent was given or the resolution was passed
(b) 21 days after the date on which the consent was given or the resolution was passed
(c) 30 days after the date on which the consent was given or the resolution was passed
(d) 7 days after the date on which the consent was given or the resolution was passed
192. Provisions of Section 52 are applicable to certain class of companies which does not cover
(a) all unlisted public companies;
(b) all private companies; and
(c) "listed companies so far as they do not contradict or conflict with any other regulation
framed in this regard by the Securities and Exchange Board of India"
(d) listed companies
193. "Where a company engaged in infrastructure project issued preference share for 30 years, which out
of the following statement is correct"
(a) "Redemption of a minimum 15% of such preference shares per year from the twenty first year
onwards or earlier, on proportionate basis, at the option of the preference shareholders"
(b) "Redemption of a minimum 20% of such preference shares per year from the twenty first year
(c) "Redemption of a minimum 10% of such preference shares per year from the twenty first year
(d) "Redemption of a minimum 5% of such preference shares per year from the twenty
first year onwards or earlier, on proportionate basis, at the option of the preference
shareholders"
194. In case of One person company, share certificate shall be signed by
(a) a director
(b) At least 2 directors
(c) Company secretary
(d) Both a and b or person authorised by Board
195. Issue of Renewed or Duplicate Share Certificate shall be issued only if
(a) Shares have been sub-divided or Shares have been consolidated
(b) In replacement of those which are defaced, mutilated, torn or old, decrepit, worn out
(c) where the pages on the reverse for recording transfers have been duly utilised
(d) All of above
196. "Out of following in which scenario company need to obtain approval of Board before issue
of Duplicate share certificate"
(a) Shares have been sub-divided

(c) Shares have been consolidated

(d) No such approval shall be required
197. "No surrender of existing share certificate shall be required, where a duplicate share
certificate is required in relation to"
(a) Shares have been sub-divided
(c) Shares have been consolidated
(d) Both a and c
198. Duplicate share certificate shall be issued within ……….. in case of unlisted company
(a) 3 months from the date of submission of complete documents with the company
(b) 3 months from the date of submission of complete documents with the company
(c) 2 months from the date of submission of complete documents with the company
(d) 30 Days from the date of submission of complete documents with the company
199. Duplicate share certificate shall be issued within …….. in case of listed company
(a) 3 months from the date of submission of complete documents with the company
(b) 1 months from the date of submission of complete documents with the company
(c) 2 months from the date of submission of complete documents with the company
(d) 45 Days from the date of submission of complete documents with the company
200. "The particulars of every duplicate share certificate issued shall be entered forthwith in a Register of
Renewed and Duplicate Share Certificates maintained in"
(a) FormSH-2 (b) Form SH-3 (c) FormSH-5 (d) Form SH-6
201. Period during which Register for duplicate share certificate shall be issued shall not exceed
(a) Immediate preceding 8 years (c) Immediate preceding 3 years
(b) Immediate preceding 5 years (d) It shall be maintained permanently
202. All entries made in the Register of Renewed and Duplicate Share Certificates shall be
authenticated by
(a) Atleast 2 directors of company
(b) Atleast 2 directors of company, where 1 shall be the managing director
(c) Atleast 2 directors of company along with company secretary
(d) company secretary
203. Right of pre-emptive is available to existing shareholders through provisions of
204. "Right offer shall be given through a notice, whereby period of …….. days shall be given to members
to decide"
(a) Minimum 15 days and max 30 days (c) Minimum 7 days and max 30 days
(b) Minimum 10 days and max 15 days (d) Minimum 30 days and max 45 days
205. Notice as specified in Section 62 shall not be dispatched through
(a) Registered Post (c) Electronic mode
(b) Speed Post (d) Post
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206. Period of notice as specified in Section 62 may be reduced in case of private limited company
provided
(a) "Atleast 90% of the members of a private company have given their consent in writing
or in electronic mode"
(b) "Atleast 75% of the members of a private company have given their consent in writing
or in electronic mode"
(c) "Atleast 100% of the members of a private company have given their consent in writing or in
electronic mode"
(d) Article of company so provide
207. Which out of the following shall not be the content of notice as dispatched u/s 62
(a) It must specify the number of shares offered, and the time within which the offer is
to be accepted.
(b) "It must inform the shareholders that if the offer is not accepted within the specified
time, it shall be deemed to be declined"
(c) "It must inform the shareholders that they have the right to renounce all or any of
the shares, offered to them, in favour of their nominees"
(d) "It must also inform that shareholders may request company for extension of time, if
shareholder need certain more time for making payment"
208. Out of the following, in which of the situation, company may issue its new shares to new
shareholders.
(a) If the existing shareholders to whom the shares are offered decline to accept the
shares.
(b) Conversion of Debentures or loans into shares
(c) "Conversion of Debentures or loan into shares based upon the directions issued by Central
Government"
(d) All of above
209. "While issuing any order for conversion of loan into shares u/s 62(4), central government
shall consider the following"
(a) Financial position of the company
(b) Rate of interest payable on the debentures or the loans
(c) Current market price of the shares in the company
(d) All of above
210. "Against the decision of central government to convert loan into shares, appeal can be
lodged to Tribunal within"
(a) 30 days from the date of communication of such order
(b) 45 days from the date of communication of such order
(c) 60 days from the date of communication of such order
(d) 90 days from the date of communication of such order

211. Central government can issue order for conversion of debenture or loan into share
(a) Even if term of issue of such loan or debentures does not contain a term of conversion
thereof
(b) Only if these debentures or loan was issued with a term containing for such conversion
(c) Only if prior approval of tribunal has been obtained
(d) Only if prior approval of Ministry has been obtained
212. Company can issue debentures or loan which is convertible into shares if
(a) Special resolution shall be passed at the time of conversion
(b) Special resolution shall be passed at the time of issue
(c) ordinary resolution shall be passed at the time of conversion
(d) ordinary resolution shall be passed at the time of issue
213. Which out of the following is incorrect in relation to underwriting commission
(a) Company must be authorized through its AOA to pay such commission
(b) "In case of shares, rate of commission shall not exceed 5% of the price at which the
shares are issued or Rate mentioned under articles, whichever is lower"
(c) "In case of Debentures, rate of commission shall not exceed 2.5% of the price at which
the Debentures are issued or Rate mentioned under articles, whichever is lower"
(d) "Company having a Paid-Up share capital of ?20 Cr or more shall not pay underwriting
commission of more than 1% except with prior approval by members through Special
Resolution"
214. "Unique Builders Limited decides to pay 2:% percent underwriting commission on debentures. The,
company further decides to pay the underwriting commission in the form of flats. Decide"
(a) "Decision on part of company is valid, as commission rate is within law, moreover
commission can be paid in form of flat"
(b) Decision on part of commission is not valid, since there is no provision for commission
through flat
(c) Company can not pay commission over 1% without special resolution at all, thus
decision is not valid
(d) Both b and c
215. "Where a company alters its share capital in any manner specified in sub-section (1) of
section 61, or an order is passed by the Government increasing the authorized capital of the
company in pursuance of subsection (4) of section 62 or a company redeems any redeemable
preference shares, the notice of such alteration shall be filed by the company with the
Registrar in"
(a) Form No. SH.5 (c) Form No. SH.7
(b) Form No. SH.6 (d) Form No. SH.8
216. "Suppose a company having liability of members as unlimited want to convert such liability
as limited, then it shall ensure the following"
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(a) "increase the nominal amount of its share capital by increasing the nominal amount
of each of its shares, subject to the condition that no part of the increased capital
shall be capable of being called up except in the event and for the purposes of the
company being wound up"
(b) "provide that a specified portion of its uncalled share capital shall not be capable of
being called up except in the event and for the purposes of the company being wound
up"
(c) either a or b (d) a and b (e) both c and d
217. Which out of the following is not a pre-condition for reduction of share capital
(a) Any such reduction shall require prior approval of tribunal
(b) Special resolution shall be passed for said alteration
(c) "no such reduction shall be made if the company is in arrears in the repayment of any deposits
accepted by it"
(d) Company shall not be in default in repayment of debentures
218. Which out of the following in not a valid manner for reduction of share capital by company
(a) "company may extinguish or reduce the liability on any of its shares in respect of the
share capital not paid-up"
(b) "company may either with or without extinguishing or reducing liability on any of its
shares cancelany paid-up share capital which is lost or is unrepresented by available
assets"
(c) "company may either with or without extinguishing or reducing liability on any of
its shares pay off any paid-up share capital which is in excess of the wants of the
company,"
(d) company may pay off any paid-up share capital which is in excess of the wants of the
company,
219. Upon any application to tribunal for its approval u/s 66
(a) Every endeavour shall be made to dispose off the application within 90 days
(b) Tribunal shall dispose off the application within 45 days
(c) "Tribunal shall give notice of every application made to it to the Central Government,
Registrar and to the Securities and Exchange Board"
(d) Tribunal to hear both parties and pass appropriate judgement
220. "Central Government, Registrar and to the Securities and Exchange Board shall provide their
representation to tribunal within"
(a) 3 months from the date of receipt of the notice
(b) 1 months from the date of receipt of the notice
(c) 30 days from the date of receipt of the notice
(d) 90 days from the date of receipt of the notice
221. "where no representation has been received from the Central Government, Registrar, the

Securities and Exchange Board or the creditors within the said period"
(a) it shall be presumed that they have objection to the reduction
(b) it shall be presumed that they have no objection to the reduction
(c) Extension of further 3 months shall be allowed to them for making their representation
(d) Extension of further 30 days shall be allowed to them for making their representation
222. Which out of the following is incorrect in relation to Section 66
(a) "The Tribunal may, if it is satisfied that the debt or claim of every creditor of the
company has been discharged or determined or has been secured or his consent is
obtained, make an order confirming the reduction of share capital on such terms and
conditions as it deems fit"
(b) "no application for reduction of share capital shall be sanctioned by the Tribunal
unless the accounting treatment, proposed by the company for such reduction is
in conformity with the accounting standards specified in section 133 or any other
provision of this Act and a certificate to that effect by the company's auditor has
been filed with the Tribunal"
(c) "order of confirmation of the reduction of share capital by the Tribunal shall be
published by the company"
(d) company shall deliver a certified copy of the order of the Tribunal to ROC within 60
days
223. "Where the name of any creditor entitled to object to the reduction of share capital
under this section is, by reason of his ignorance of the proceedings for reduction
or of their nature and effect with respect to his debt or claim, not entered on the list
of creditors, and after such reduction, the company commits a default, within the
meaning of section 6 of the Insolvency and Bankruptcy Code, 2016, in respect of the
amount of his debt or claim, then"
(a) "Every person, who was a member of the company on the date of the registration of
the order for reduction by the Registrar, shall be liable to contribute to the payment
of that debt or claim, an amount not exceeding the amount which he wouldhave
been liable to contribute if the company had commenced winding up on the day
immediately before the said date"
(b) "if the company is wound up, the Tribunal may, on the application of any such creditor
and proof of his ignorance as aforesaid, if it thinksfit, settle a list of persons so liable
to contribute, and make and enforce calls and orders on the contributories settled on
the list, as if they were ordinary contributories in a winding up."
(c) Both a and b
(d) Either a and b
224. Which out of the following statement is true in relation to reduction of share capital
(a) Company need to pass Ordinary Resolution
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(b) It will not have any impact on Paid up share capital

(c) It will alter the Capital clause of MOA
(d) It may or may not result in alteration under Capital clause of MOA
225. In which out of the following circumstances, company can purchase its own shares:
(a) Loan given by a banking company in the ordinary course of its business.
(b) "Where the loan is given by the company to its employees (other than the directors or
manager or KMP) provided amount of said loan cannot exceed the employees' salary
for a period of six months."
(c) "Where some scheme is draft according to which some provision of money is made to
enable the trustees to acquire fully paid shares in the company or its holding company
to be held for benefit of the employees of the company"
(d) Any of above
226. Section 67 shall not apply to private companies if,—
(a) in whose share capital no other body corporate has invested any money
(b) "if the borrowings of such a company from banks or financial institutions or anybody
corporate is less than twice its paid up share capital or fifty crore rupees, whichever
is lower"
(c) "such a company is not in default in repayment of such borrowings subsisting at the
time of making transactions under this section"
(d) All of above
227. Which out of the following is incorrect in relation to provisions of section 67
(a) "Generally, no public company shall give, whether directly or indirectly and whether
by means of a loan, guarantee, the provision of security or otherwise, any financial
assistance for the purpose of, or in connection with, a purchase or subscription made
or to be made, by any person of or for any shares in the company or in its holding
company."
(b) "Nothing in this section shall affect the right of a company to redeem any preference
shares issued by it under this Act or under any previous company law."
(c) "In case of Nidhi company - Sub-section (1) of Section 67 shall not apply, when shares
are purchased by the company from a member on his ceasing to be a depositor or
borrower and it shall not be considered as reduction of capital under section 66 of the
Companies Act, 2013"
(d) "No need for any disclosures in respect of voting rights not exercised directly by the
employees in respect of shares to which the scheme relates in the Board's report"
228. "A company may purchase its own shares or other specified securities (hereinafter referred
to as buy-back) out of certain sources, which shall not include the following"
(a) its free reserves
(b) the securities premium account

(c) the proceeds of the issue of any shares or other specified securities
(d) "out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified
securities"
229. No company shall purchase its own shares or other specified securities under section 68,
unless:-
(a) the buy-back is authorised by its articles
(b) a special resolution has been passed at a general meeting of the company authorising
the buy-back
(c) shares or other specified securities for buy-back may be fully paid-up
(d) "the ratio of the aggregate of secured and unsecured debts owed by the company after
buy-back is not more than twice the paid-up capital and its free reserves"
230. Which out of the following is incorrect in relation to buy back by members
(a) the buy-back is authorised by its articles
(b) a special resolution has been passed at a general meeting of the company authorising
the buy-back:
(c) "buy-back shall not exceed twenty-five per cent or less of the aggregate of paid-up
capital and free reserves of the company"
(d) "in respect of the buy-back of equity shares in any financial year, the reference to 20% shall be
construed with respect to its total paid-up equity capital in that financial year"
231. Once a buy back has been announced, company shall not proceed to announce any further
buy back
(a) within a period of one year reckoned from the date of the closure of the preceding
offer of buy-back
(b) within a period of 12 months reckoned from the date of the closure of the preceding
offer of buy-back
(c) within a period of 6 months reckoned from the date of the closure of the preceding
offer of buy-back
(d) within a period of 2 year reckoned from the date of the closure of the preceding offer
of buy-back
232. Period of completion of buy back shall be
(a) "within a period of one year from the date of passing of the special resolution, or as
the case may be, the resolution passed by the Board"
(b) within a period of one year from the date of passing of the resolution
(c) within a period of one year from the date of notice of general meeting
(d) within a period of one year from the date when first offer of security under buy back
is made
233. Which out of following is incorrect in relation to buy back of securities
(a) Free reserves" includes securities premium account
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(b) "Where a company buys back its shares or other specified securities under this section, it shall
maintain a register of the shares or securities so bought, the consideration paid for
the shares or securities bought back, the date of cancellation of shares or securities,
the date of extinguishing and physically destroying the shares or securities and such
other particulars as may be prescribed"
(c) "The buy-back may be either from the existing shareholders or security holders on a
proportionate basis or from the open market"
(d) "Where a company proposes to buy-back its own shares or other specified securities
under this section in pursuance of a special resolution, it shall, before making such
buy-back, file with the Registrar and the Securities and Exchange Board, a declaration
of solvency signed by at least two directors of the company, one of whom shall be the
managing director"
234. Period of Buy Back shall remains open for
(a) "period of not less than 10 days and not exceeding 30 days from the date of dispatch
of the letter of offer"
(b) "period of not less than 15 days and not exceeding 30 days from the date of dispatch
(c) "period of not less than 7 days and not exceeding 15 days from the date of dispatch of
the letter of offer"
(d) "period of not less than 10 days and not exceeding 45 days from the date of dispatch
235. "The company which has been authorized by a special resolution shall, before the buy-back
of shares, file with the Registrar of Companies a letter of offer in"
236. "The offer for buy-back may remain open for a period less than fifteen days, provided consent
has been obtained from"
(a) All members of a company (c) Atleast 75% of members of company
(b) 90% of members of company (d) Atleast 60% of members of company
237. "Incase of Buy Back of securities, company shall ensure payment within ……… days to those
shareholders or security holders whose securities have been accepted"
238. The company, shall maintain a register of shares or other securities which have been bought-
back in
239. "The company, after the completion of the buy-back under these rules, shall file with the
Registrar, and incase of a listed company with the Registrar and the Securities and Exchange

Board of India, a return in"

(a) Form No. SH.6 (c) Form No.SH. 11
240. "Where a company buys back its own shares or other specified securities, it shall extinguish
and physically destroy the shares or securities so bought back within ……….. days of the last
date of completion of buyback."
241. "As per Section 69, Where a company purchases its own shares out of free reserves or
securities premium account, a sum equal to the nominal value of the shares so purchased
shall be transferred to the"
(a) Free Reserve account
(b) Profit & loss Account
(c) capital redemption reserve account
(d) Capital Reserve account
242. "As per Section 70, No company shall directly or indirectly purchase its own shares or other specified
securities through"
(a) Any subsidiary company including its own subsidiary companies
(b) Any investment company or group of investment companies
(c) Any of its group company including its own associate company
(d) a and b above
243. Even if a default is committed in repayment of debentures, still company remains eligible
for Buy Back
(a) Statement is true
(b) Statement is false
(c) "Statement is true if the default is remedied and a period of three years has lapsed
after such default ceased to subsist"
(d) "Statement is true if the default is remedied and a period of 1 year has lapsed after
such default ceased to subsist"
244. "No company shall, directly or indirectly, purchase its own shares or other specified securities
in case such company has not complied with the provisions of "
(a) Section 92 i.e. Annual Return (c) Section 129 i.e. Financial Statement
(b) Section 123 and 127 i.e. Dividend (d) All of above
245. In case of Subscriber to Memorandum, Share certificate shall be issued
(a) Within 2 months from incorporation of company
(b) Within 2 months from Allotment of shares to them
(c) Within 2 months from submission of Memorandum
(d) Within 1 months from Allotment of shares to them
246. In case of transfer or transmission of shares, Share certificate shall be issued
64 Navkar Institute

(b) Within 2 months from Allotment of shares to them
(d) Within one months after the application for registration of the transfer of such shares.
247. In case of any allotment of Debentures, Debentures certificate shall be issued
(b) Within 6 months from Allotment
(d) Within 2 months from allotment
248. "If a private company refuses, to register the transfer of, or the transmission of any securities,
based upon some unreasonable conditions, then the company shall send notice of the refusal
to the"
(a) Transferor (c) Both transferor and transferee
(b) Transferee (d) No Such notice required
249. Intimation of rejection shall be served by company within
(a) "A period of 30 days from the date on which the instrument of transfer, or the
intimation of such transmission, was delivered to the company"
(b) "A period of 15 days from the date on which the instrument of transfer, or the
(c) "A period of 45 days from the date on which the instrument of transfer, or the
(d) "A period of 60 days from the date on which the instrument of transfer, or the
250. "In case of private limited company, transferee being aggrieved due to rejection by company
in transfer of shares, may lodge a complaint within"
(a) 30 Days from receipt of notice of rejection
(b) 60 days, where no notice of rejection could be served
(c) 90 days where no notice of rejection could be served
(d) Both a and b
251. "As per Section 59, Appeal to Tribunal may be submitted by aggrieved party if the name of
any person is, without sufficient cause,"
(a) entered in the register of members of a company
(b) after having been entered in the register, is, omitted there from
(c) if a default is made, or unnecessary delay takes place in entering in the register
(d) Any of above
252. Which out of the following is not a power of tribunal as prescribed u/s 59.
(a) dismiss the appeal or
(b) "direct that the transfer or transmission shall be registered by the company within a

period of ten days of the receipt of the order, or"

(c) "direct rectification of the records of the depository or the register and direct the
company to pay damages, if any, sustained by the party aggrieved."
(d) Direct penalty of 50000 rupee plus continuing penalty of 5,000 rupee on continuing
default
253. The instrument of transfer is said to be forged when
(a) transferor's signatures bearing on it are forged
(b) transferee's signatures bearing on it are forged.
(c) Signatures of both transferor and transferee are forged
(d) Stamp of Registrar of company bearing on it was forged
254. "If the company had issued a share certificate to the transferee on a forged transfer and
he further sold them to another buyer who has acted in good faith, then, which out of
following statement is true."
(a) the purchaser will have no right to be registered as shareholder
(b) "Purchaser can claim damages from the company on the ground since he has acted on
the faith of the share certificate issued by the company"
(c) Company can claim damages from the person who has submitted said forged transfer
deed to it
(d) All of above
255. "An instrument of transfer in which only the name and signature of the transferor are filled in, shall be
termed as"
(a) Invalid Transfer (c) Void Transfer
(b) Blank Transfer (d) Forged Transfer
256. "Being in need of further capital, Rimsi Cotton-Silk Products Limited opted to offer 50.00 lacs equity
shares of ?1 each to 50 identified persons on 'private placement' basis and accordingly a letter of offer
accompanied by serially numbered application form was sent to them after fulfilment of
due formalities including passing of special resolution. One of the applicants, Rajan made
a written complaint to the company highlighting the fact that the letter of offer was
incomplete as well as illegal, for the same did not contain 'renunciation clause' though he
wanted to exercise his 'right of renunciation' in favour of one of his son Uday. By choosing
the correct option, advise the company in this matter."
(a) "As the 'Right of Renunciation' cannot be denied, the company needs to rectify its mistake by
including the same in the letter of offer and the application form."
(b) "The company is prohibited from providing 'Right of Renunciation' and therefore, the
letter of offer and the application form need not include any such clause."
(c) "Instead of absolute prohibition, the company needs to provide 'Right of Renunciation'
limited to twenty five percent of offering."
(d) "Instead of absolute prohibition, the company needs to provide 'Right of Renunciation'
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limited to fifty percent of offering."

257. Term Debentures is defined as per
(a) Section 2(18) (c) Section 2(19)
(b) Section 2(18) (d) Section 2(29)
258. Which out of the following statement in incorrect
(a) No company shall issue any debentures carrying any voting rights
(b) " A company may issue debentures with an option to convert such debentures into
shares, either wholly or partly at the time of redemption"
(c) "An issue of secured debentures may be made, provided the date of its redemption
shall not exceed ten years from the date of issue"
(d) the company shall appoint the debenture trustee after the issue of prospectus for
purpose of security the company shall appoint the debenture trustee after the issue
of prospectus for purpose of security
259. Which out of the following statement is incorrect in relation to issue of debentures
(a) "Companies engaged in setting up of infrastructure projects may issue secured
debentures for a period exceeding ten years but not exceeding 20 years"
(b) "Debentures shall be secured by the creation of a charge on the properties or assets of
the company or its subsidiaries or its holding company or its associates companies,
having a value which is sufficient for the due repayment of the amount of debentures
and interest thereon"
(c) "In case of any issue of debentures by a Government company which is fully secured by
the guarantee given by the Central Government or one or more State Government or
by both, the requirement for creation of charge under this sub-rule shall not apply."""
(d) "the security for the debentures by way of a charge or mortgage shall be created in favour of the
debenture trustee"
260. A person shall not be appointed as a debenture trustee, if he
(a) Beneficially holds shares in the company
(b) "Promoter, director or key managerial personnel or any other officer or an employee
of the company or its holding, subsidiary or associate company"
(c) "Beneficially entitled to moneys which are to be paid by the company otherwise than
as remuneration payable to the debenture trustee"
(d) All of above
261. A person shall not be appointed as a debenture trustee, if he
(a) "is not indebted to the company, or its subsidiary or its holding or associate company
or a subsidiary of such holding company"
(b) "has not furnished any guarantee in respect of the principal debts secured by the
debentures or interest thereon"
(c) "Does not have any pecuniary relationship with the company amounting to two

per cent, or more of its gross turnover or total income or fifty lakh rupees or such
higher amount as may be prescribed, whichever is lower, during the two immediately
preceding financial years or during the current financial year"
(d) "Relative of any promoter or any person who is in the employment of the company as
a director or key managerial personnel"
262. Which out of the following is not a duty of Debenture trustee
(a) "satisfy himself that the letter of offer does not contain any matter which is
inconsistent with the terms of the issue of debentures or with the trust deed"
(b) "satisfy himself that the covenants in the trust deed are not prejudicial to the interest
of the debenture holders"
(c) Discussing the performance in Board Meeting
(d) "communicate promptly to the debenture holders defaults, if any, with regard to
payment of interest or redemption of debentures and action taken by the trustee
therefor"
263. Debenture Trustee shall be entitled to appoint Nominee Director on board of company, if
(a) Event of default in payment of interest to the debenture holders
(b) Delay in creation of security for debentures
(c) Default in redemption of debentures
(d) Non-sharing of information by management as required
264. which out of following shall not be the duty of every debenture trustee
(a) call for reports on the utilization of funds raised by the issue of debentures
(b) take steps to convene a meeting of members as and when such meeting is required
to be held
(c) "ensure that the debentures have been converted or redeemed in accordance with the
terms of the issue of debentures"
(d) "ensure that the debentures have been converted or redeemed in accordance with the
terms of the issue of debentures"
265. Meeting of all the debenture holders shall be convened by the debenture trustee on—
(a) "Requisition in writing signed by debenture holders holding at least l/5th in value of
the debentures for the time being outstanding"
(b) "Requisition in writing signed by debenture holders holding at least l/20th in value of
(c) "Requisition in writing signed by debenture holders holding at least 1/10th in value of
(d) "Requisition in writing signed by debenture holders holding at least 50% in value of
266. Meeting of all the debenture holders shall be convened by the debenture trustee on
(a) "happening of any event, which constitutes a breach, default or which in the opinion
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of the debenture trustees affects the interest of the debenture holders"

(b) Non-sharing of information by management as required
(c) Delay in creation of security for debentures
(d) None of above
267. Debenture Trust Deed shall be executed as per
(a) FormSH-12 (b) Form SH-II (c) FormSH-10 (d) Form SH-9
268. "Debenture Trust Deed shall be executed by the company issuing debentures in favour of the
debenture trustees"
(a) within 2 months of closure of the issue or offer
(b) within 2 months of closure of the issue or offer
(c) within 5 months of closure of the issue or offer
(d) within 6 months of closure of the issue or offer
269. "Which out of the following is correct in relation to Debenture Redemption Reserve, where
a company intends to redeem its debentures prematurely"
(a) "Company may provide for transfer of such amount in Debenture Redemption Reserve
as is necessary for redemption of such debentures"
(b) Company may provide for transfer of atleast 50% of amount in Debenture Redemption
Reserve
(c) Company may provide for transfer of atleast 75% of amount in Debenture Redemption
Reserve
(c) Company may provide for transfer of atleast 75% of amount in Debenture Redemption
Reserve
(d) None of above
270. "Any money transferred to the Unpaid Dividend Account of a company which remains unpaid or
unclaimed for a period of seven years shall be transferred by the company to"
(a) Investor Education and Protection Fund
(b) Investor Protection and Education Fund
(c) Investor Protection Fund
(d) Fund established by Company for this purpose
271. Which out of the following statement is incorrect in relation to Debenture Redemption
Reserve
(a) "No DRR is required for debentures issued by All India Financial Institutions (AIFIs)
regulated by Reserve Bank of India and Banking Companies for both public as well as
privately placed debenture"
(b) "For NBFCs registered with the RBI under Section 45-IA of the RBI (Amendment) Act,
1997, and for housing finance companies registered with the national housing bank
'the adequacy' of DRR will be 25% of the value of outstanding debentures issued
through public issue"

(c) "For -other companies including manufacturing companies, the adequacy of DRR will
be 25% of the value of outstanding debentures"
(d) "For companies engaged in infrastructure, the adequacy of DRR will be 50% of the value of
outstanding debentures"
272. "Every company required to create Debenture Redemption Reserve shall on or before the
30th day of April in each year, invest or deposit, as the case may be, a sum which shall not
be less"
(a) " 15% of the amount of its debentures maturing during the year ending on the 31st
day of March of the next year"
(b) "25% of the amount of its debentures maturing during the year ending on the 31st day
of March of the next year"
(c) "15% of the amount of its debentures maturing during the year ending on the 31st day
of March of the next year and also the following year"
(d) "25% of the amount of its debentures maturing during the year ending on the 31st day
of March of the next year and also the following year"
273. " Every company required to create Debenture Redemption Reserve shall invest in 1 or more of the
following securities"
(a) Deposits with any scheduled bank, free from any charge or lien
(b) Unencumbered securities of the Central Government or of any State Government
(c) Unencumbered securities mentioned in section 20 of the Indian Trusts Act, 1882
(d) "Unencumbered bonds issued by any other company which is notified under sub-
clause (f ) of section 20 of the Indian Trusts Act, 1882"
(e) All of above
274. In case of partly convertible debentures, Debenture Redemption Reserve shall be created in
respect of
(a) Entire Debenture Amount
(b) non-convertible portion of debenture only
(c) 100% for non-convertible Debentures and 50% for convertible portion
(d) 100% for non-convertible Debentures and 25% for convertible portion
275. " A trust deed for securing any issue of debentures shall be open for inspection to any
member or debenture holder of the company"
(a) This statement is correct
(b) Only for inspection of Debenture holder, but not for members
(c) Only for Debenture holders and those member who are debenture holder as well
(d) "For both member and debenture holders in the same manner, as if it were the register
of members of the company"
276. "A copy of the trust deed shall be forwarded to any member or debenture holder of the company, at his
request, within"
70 Navkar Institute
(a) 7 Days of such request (c) 15 Days of such request

(b) 10 Days of such request (d) 30 Days of such request
277. Any vacancy in office of Debenture Trustee shall be filled by
(a) Board of Directors
(b) Meeting of Debenture Holders
(c) Board subject to approval by Debenture holders
(d) Central Government
278. Any vacancy in office of Debenture Trustee caused due to his resignation shall be filled by
(a) Meeting of Debenture Holders
(b) Written consent of the majority of the debenture holders.
(c) Board of Directors
(d) Central Government
279. Any Debenture Trustee can be removed from his office provided
(a) "it is approved by the holders of not less than three fourth in value of the debentures
outstanding, at their meeting"
(b) it is approved by Board subject to consent of majority of Debenture holders
(c) "it is approved by the holders of not less than 2/3rd in value of the debentures
outstanding, at their meeting"
(d) it is approved by Central government
280. " Where at any time the debenture trustee comes to a conclusion that the assets of the company are
insufficient or are likely to become insufficient to discharge the principal amount as and
when it becomes due, he may"
(a) " File a petition before the Tribunal and the Tribunal may, after hearing the company
and any other person interested in the matter, by order, impose such restrictions on
the incurring of any further liabilities by the company as the Tribunal may consider
necessary in the interests of the debentureholders"
(b) Call the immediate meeting of Debenture hc'ders on urgent basis
(c) Take such step as may be directed by holder of atleast 75% in value of debentures
(d) opt for sale of security
281. " Where a company fails to redeem the debentures on the date of their maturity or fails to
pay interest on the debentures when it is due, the Tribunal may, on the application of any or
all of the debenture-holders, or debenture trustee and, after hearing the parties concerned,
direct, by order, the company"
(a) to redeem the debentures within next 60 days
(b) to redeem the debentures within next 30 days
(c) to redeem the debentures within next 90 days
(d) to redeem the debentures forthwith on payment of principal and interest due thereon

ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(d) (b) (b) (a) (c) (c) (d) (a) (b) (c) (c) (a) (a) (d) (b)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(a) (a) (b) (d) (c) (c) (b) (b) (d) (a) (b) (d) (b) (d) (b)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(c) (a) (c) (d) (b) (c) (b) (d) (b) (d) (b) (b) (d) (c) (b)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(a) (b) (b) (d) (c) (c) (b) (a) (c) (a) (d) (a) (d) (b) (d)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(d) (b) (c) (a) (c) (b) (b) (b) (b) (b) (d) (d) (d) (d) (d)
76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88 89. 90.
(b) (b) (a) (d) (c) (a) (d) (c) (b) (d) (d) (d) (d) (c) (c)
91. 92. 93 94. 95. 96. 97. 98. 99. 100. 101 102. 103. 104. 105.
(a) (d) (c) (c) (c) (c) (b) (b) (a) (d) (b) (a) (c) (d) (a)
106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120.
(d) (b) (c) (b) (a) (d) (a) (d) (a) (c) (b) (d) (a) (a) (a)
121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135.
(b) (d) (d) (a) (a) (b) (b) (b) (b) (d) (b) (d) (c) (a) (a)
136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150.
(a) (d) (b) (b) (d) (d) (d) (b) (a) (d) (b) (d) (c) (c) (d)
151. 152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165.
(b) (a) (b) (c) (d) (c) (b) (a) (b) (d) (a) (c) (b) (b) (c)
166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. 177. 178. 179. 180.
(b) (d) (b) (a) (c) (b) (d) (c) (b) (b) (d) (c) (d) (d) (a)
181. 182. 183. 184. 185. 186. 187. 188. 189. 190. 191. 192. 193. 194. 195.
(c) (b) (d) (d) (b) (c) (a) (c) (d) (a) (b) (d) (c) (d) (d)
196. 197. 198. 199. 200. 201. 202. 203. 204. 205. 206. 207. 208. 209. 210.
(c) (d) (c) (d) (a) (d) (d) (d) (a) (d) (a) (d) (d) (d) (b)
211. 212. 213. 214. 215. 216. 217. 218. 219. 220. 221. 222. 223. 224. 225.
(a) (b) (d) (a) (c) (e) (d) (d) (c) (a) (b) (d) (c) (c) (d)
226. 227. 228. 229. 230. 231. 232. 233. 234. 235. 236. 237. 238. 239. 240.
(d) (d) (d) (c) (d) (a) (a) (d) (b) (c) (a) (a) (d) (c) (a)
241. 242. 243. 244. 245. 246. 247. 248. 249. 250. 251. 252. 253. 254. 255.
(c) (d) (c) (d) (a) (d) (b) (c) (a) (d) (d) (d) (a) (d) (b)
256. 257. 258. 259. 260. 261. 262 263. 264. 265. 266. 267. 268. 269. 270.
(b) (b) (d) (a) (d) (d) (c) (c) (b) (c) (a) (a) (b) (a) (a)
271. 272. 273. 274. 275. 276. 277. 278. 279. 280. 281.
(d) (a) (e) (2) (d) (a) (a) (b) (a) (a) (d)
72 Navkar Institute
CHAPTER-5 ACCEPTANCE OF DEPOSITS BY COMPANIES
CHAPTER-5
ACCEPTANCE OF DEPOSITS BY COMPANIES
1. Amount deposited in Deposit Repayment Reserve A/c is called----------

(a) Crystallised Reserve (c) Deposit Reserve
(b) Liquid Reserve (d) None of these
2. An amount of 25 lakhs or more received by start up company by way of convertible note in
a single tranche from a person shall be acceptable as Deposits.
(a) True (b) False
3. ______includes any amount borrowed by a company:
(a) Deposits (b) Funds (c) Both(a)&(b) (d) None
4. What is the overall ceiling limit imposed for Government company to accept any deposits -
(a) 10% (b) 25% (c) 35% (d) 5%
5. Maximum amount of deposits that can be accepted in case of Private Company shall be —
(a) 10% (b) 35% (c) 100% (d) 25%
6. Depositor means :
(a) Debenture holder
(b) Shareholder
(c) Member of a company holding deposit
(d) Shareholder holding shares.
7. On 30th June 2017, the liability side of Balance Sheet of X Ltd. showed balance of paid up
share capita! ofx 65 lacs, free reserve of ` 10 lacs, share premium account of ` 20 lacs,
deposits of ` 25 lacs, repayable in the current financial year, during the month of September
2017.1n July 2017, the company was in need of some short term funds to the tune of `
20 lacs for a period of 6 months. The maximum amount which the company may hold as
deposit together with existing deposits will be—
(a) ` 33.25 Lacs (c) 1 95 lacs
(b) % 11.25 lacs (d) 4 9.5 lacs.
8. Every eligible company shall obtain_____ credit rating for deposits accepted by it and copy
of the credit rating shall br filled with registrar along with The return of deposits.
(a) At the time of acceptance of deposits
(b) At the time of removal of deposits
(c) Either 1 or 2 OR both
(d) atleast once in the year
9. _______is required to be passed,if a company intends to accept deposits from its memers.
(a) an ordinary resolution (c) an unanimous resolution
(b) a special resolution (d) resolution by circulation

10. The company shall execute a deposit trustdeed in form _____ at least 7 days before issuing
the circular or the circular in the form of advertisement
(a) DPT-1 (b) DPT-2 (c) DPT-3 (d) DPT-4
11. All the companies accepting deposits shall file the details of monies so accepted with the
registrar in form no________?
12. A company may make an application to _____ seeking extention of time for repayment of
any deposit accepted before the companies act-2013
(a) The tribunal (c') The CG
(b) the registrar (d) The court
13. In the case of deposits which are secured by the charge on the assets , the amount of such
deposits and the interest payable there on shall not exceed the _______ of such assets as
assessed by a_______
(a) Market value; registered valuer (c) Book value; registered valuer
(b) Market value;chartered accountant (d) Book value; chartered accountant
14. The security for deposits shall be created in favour of a trustee for the depositors shall not
be in the nature of_____
(a) A mortgage (c) Either 1 or 2
(b) A pledge (d) none of the above
15. if a company intends to accept deposits from its members, it shall issue a circular to the
members the circular shall be filed by the company with the registrar, at least______prior to
the issue of circular to the members.
16. A company shall be liable to pay penal rate of interest of _________ pa for the overdue period
in case of deposits, whether secured or unsecured, matured and claim but remaining unpaid
(a) 12% (b) 15% (c) 18% (d) 24%
17. Where a company accepts deposits from its members, it shall be deposit in a Scheduled bank
in a separate bank account a sum equal to _______ of the amount of deposits maturing
during the following financial year. Such amount shall be deposited on or before the______
each year.
(a) 10%; 31 st day of march (c) 10%;30th day of April
(b) 20%; 31 st day of march (d) 20%;30 th day of April
18. For the purpose of providing security, every company every company inviting secured
deposits shall provide for security by way of a charge on its assets as referred to in ____ of
the act excluding ___ assets of the company for the due repayment of the amount of deposit
and interest thereon.
(a) schedule 2,Intangible (c) schedule 3,Intangible
(b) schedule 2,tangible (d) schedule 3,tangible
74 Navkar Institute
19. The amount of deposits outstanding together with the amount of deposits proposed to
be accepted shall not exceed _____ of the aggregate of the paid up share capital , free
reserves,securities premium account of the company .
(a) 20% (b) 25% (c) 35% (d) 50%
20. No companies shall accept or renew any deposit which is repayable after _______ from the
date of acceptance of such deposit.
(a) 6 months (b) 12 months (c) 24 months (d) 36 months
21. if a company had accepted any deposits before the commencement i[of the companies act-
2013, and such deposits or interest there on remains unpaid as on such commencement ,
then the company shall file a statement in form no____
22. A company may accept deposits from person other than its members only if it is public
company and the networth of the company is______ or more _________ T/O of the company
is ______ or more.
(a) 100 crore;OR;500 crore (c) 100 crore;AND;500 crore
(b) 1000 crore;OR;5000 crore (d) 1000 crore;AND;5000 crore
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(d) (b) (b) (a) (c) (c) (a) (d) (a) (b) (c) (a) (a) (b) (d)
16. 17. 18. 19. 20. 21. 22.
(c) (c) (c) (c) (d) (d) (a)

CHAPTER-6 REGISTRATION OF CHARGE
CHAPTER-6
REGISTRATION OF CHARGE
1. A charge may be created —

(a) Only within India (c) Both(a) & (b)
(b) Can also be outside India (d) Either (a) or (b)
2. _______is a charge created on a class of assets related to ordinary course of business.
(a) Fixed (b) Specific (c) Floating (d) None
3. The company shall provide for security by way of a charge of assets excluding ..
(a) Tangible assets (c) Intangible assets
(b) Fixed movable assets (d) Fictitious assets
4. A charge was created on assets of Pram Limited. Such charge is registered on 12th November,
2018. Any person acquiring such assets shall be deemed to have notice of the charge: (Give
your answer as per the provisions of the Companies Act, 2013)
(a) from 12th November, 2018, (c) from 12th December, 2018,
(b) from 13th November, 2018, (d) from 12th January, 2019,
5. A charge requiring registration with Registrar of Companies was created on 1st February by
XYZ Limited. The Secretary of the Company realized on 15th March that the charge was not
filed with the Registrar. What should he do for registration?
(a) registered by payment of additional fees within next 300 days.
(b) registered by payment of additional fees within next 180 days.
(c) registered by payment of additional fees within next 90 days.
(d) None of the above
6. The Charge not registered with ROC will be------
(a) Void ab initio (c) Valid
(b) Void (d) Voidable
7. The instrument creating a charge or modification thereon shall be preserved by the company
for a period of 8 years from the date of_________ of charge.
(a) Creation (c) Satisfaction
(b) Modification (d) None of these
8. The term charge is defined as an interest or lien created on the property or assets of the
company or any of its___ both as security and includes a____.
(a) Intellectual property rights; mortagage
(b) Undertaking ;mortgage
(c) Undertaking ;hypothecation
(d) Intellectual property rights; pledge
9. If a person appointed as a receiver or manager ceases to hold his office, he shall give a notice
of such fact to_______
76 Navkar Institute
(a) The company (c) Both (1) and (2)

(b) The Registrar (d) None of these
10. If there is omission or misstatement of any entry required to be entered in the register of
charges and _______is satisfied that it was accidental or due to inadvertence or due to
some other sufficient cause, or it is just and equitable to grant relief, it may make an order
for rectification of register of charges.
(a) The Tribunal (c) The Court
(b) The Central Government (d) The Registrar
11. Where the particulars of modification of charge is registered, the Registrar shall issue a
certificate of modification of charge in Form No____________
(a) CHG-1 (b) CHG-2 (c) CHG-3 (d) CHG-4
12. Where a charge is not registered within the stipulated time period, the company may
make an application to the Registrar for condonation of delay The Registrar may allow the
registration of the charge within__________of creation of charge.
13. The application for condonation of delay in filing particulars of creation or modification or
satisfaction of charge shall be filed in Form No_______.
14. Where a company creates a charge on any of its assets, it shall be the duty of the company
to register auch charge with the Registrar within____ of its creation
15. The Registrar shall keep a register of charges which shall be open to inspection by_____ on
payment of fee?
(a) (a) The company (c) Both (a) and (b)
(b) The charge holder (D) Any person
16. "Where a charge is registered with the Registrar, the Registrar shall issue a certificate of
registration of such charge in_________Form No."
(a) CHG-1 (b) CHG-2 (C) CHG-3 (d) CHG-4
17. Where a registered charge is paid or satisfied in full, but the company does not give to the
Registrar an intimation of such payment or satisfaction within the stipulated time period,
the company or the charge holder may make application to the Registrar condonation of
delay. The Registrar may allow such intimation of payment or satisfaction to be made within
of such payment or satisfaction to be made within_____ of such payment or satisfaction,
18. Every company shall keep at its registered office a register of charges in Form No.____
19. A floating charge crystallizes into a fixed charge if ________.
(a) The company is ordered to wound up`

(b) The company ceases to carry on business

(c) A receiver is appointed
(d) any of these
20. The register of charges maintained by the company shall be preserved____ years?
(a) For a period of 3 years (c) For a period of 8 years
(b) For a period of 6 years (d) Permanently
21. "Statement (1): A specific charge is created on a class of assets, present as well as future.
Statement (2): A floating charge is created on some identifiable property of the company"
(a) Only Statement (1) is correct
(b) Only Statement (2) is correct
(c) both the statements are correct
(d) None of these statements are correct
22. . Where a registered charge is paid or satisfied in full, the company shall,give an intimation
to registrar within_____ days?
23. If the property charged _________,the Registrar may record the satisfaction of charge in
the register of charges maintained by him notwithstanding the fact that no intimation of
satisfaction of charge has been given to him by the company
(a) Has been released from charge
(b) Has ceased to be the property of the company
(c) either 1 or 2
(d) None of these
24. "For registration of change the particulars of the charge together with copy
of the instrument if any , creating the charge in Form No_______________
for other than Debentures) or form No._______ for debentures) shall be filed with the
Registrar."
(a) CHG-1; CHG-9 (c) CHG-1;CHG-2
(b) CHG-2; CHG-10 (d) CHG 1; CHG 10
25. As per the provisions of Section 77, who shall be liable to register the particulars of charge
with ROC
(a) As per the provisions of Section 77, who shall be liable to register the particulars of
charge with ROC
(b) every company creating a charge within or outside India
(c) Charge Holder
(d) Either company creating a charge or charge holder
25 As per the provisions of Section 77, who shall be liable to register the particulars of charge
with ROC
(a) As per the provisions of Section 77, who shall be liable to register the particulars of
78 Navkar Institute
charge with ROC

(b) every company creating a charge within or outside India
(c) Charge Holder
(d) Either company creating a charge or charge holder
26 Form to be submitted for creation/modification of charge (Excluding charge on Debentures)
shall be
(a) Form CHG-1 (c) Form CHG-3
(b) Form CHG-2 (d) Form CHG-4
27 Form to be submitted for creation/modification of charge on Debentures) shall be
28 As per Section 77, Form CHG-1 or CHG-9 shall be submitted to ROC within
(a) 60 days from creation of charge/modification of charge
(b) 30 days from creation of charge/modification of charge
(c) 300 days from creation of charge/modification of charge
(d) 120 days from creation of charge/modification of charge
29 As per Rule-3 of Companies (Registration of Charges) Rules, 2014. If the company fails to
register the particulars of the charge with the Registrar within the period of thirty days of
its creation or modification,
(a) "the particulars of the charge together with a copy of the instrument, if any, creating
or modifying such charge may be filed by the charge-holder"
(b) "the particulars of the charge together with a copy of the instrument, if any, creating
or modifying such charge may be filed by the company subject to approval of Central
Government"
(c) "the particulars of the charge together with a copy of the instrument, if any, creating
or modifying such charge may be filed by the charge-holder subject to penalty as
prescribed"
(d) "the particulars of the charge together with a copy of the instrument, if any, creating
or modifying such charge may be filed by the charge-holder subject to approval of
tribunal"
30 A copy of every instrument evidencing any creation or modification of charge (where the
instrument or deed relates solely to the property situated outside India) and required to be
filed with the Registrar in pursuance of section 77, 78 or 79 shall be verified by a certificate
issued either
(a) under the seal, if any, of the company
(b) "under the hand of any director or company secretary of the company or an authorised
officer of the charge holder or under the hand of some person other than the company
who is interested in the mortgage or charge"

(c) both a and b (d) either a or b

31 A copy of every instrument evidencing any creation or modification of charge (where the
instrument or deed relates solely to the property situated in India) and required to be filed
with the Registrar in pursuance of section 77, 78 or 79 shall be verified by a certificate
issued under the hand of
(a) any director
(b) company secretary of the company
(c) an authorised officer of the charge holder
(d) Any of above
32 As per Section 77, Registrar may allow registration of charge
(a) within a period of 300 days of such creation
(b) within a period of 300 days of such creation
(c) within a period of 60 days of such creation
(d) within a period of 90 days of such creation
33 Where a charge is registered with the Registrar under sub-section (1) of section 77 or
section 78, he shall issue a certificate of registration of such charge in
34 Where the particulars of modification of charge is registered under section 79, the Registrar
shall issue a certificate of modification of charge in
35 As per Section 78, Where a company fails to register the charge within the period of thirty
days referred to in sub-section (1) of section 77, the person in whose favour the charge is
created may apply to the Registrar for registration of the charge along with the instrument
created for the charge, within
(a) a period of 14 days after giving notice to the company
(b) a period of 21 days after giving notice to the company
(c) a period of 15 days after giving notice to the company
(d) a period of 7 days after giving notice to the company
36 Ram want to acquire a property from company on which charge was created, however
at the time of its sale, company failed to intimate about such charge to Ram. Discuss the
consequences
(a) Company has committed a fraud and every officer who is liable shall be proceeded u/s
447
(b) "As per Section 80, any person acquiring such property, assets, undertakings or part thereof or
any share or interest therein shall be deemed to have notice of the charge from the date of such
registration"
80 Navkar Institute
(c) either a orb (d) both a and b

37 As per Section 82, Intimation about satisfaction of charge shall be made to Registrar within
(a) within a period of 300 days from the date of such payment or satisfaction
(b) within a period of 30 days from the date of such payment or satisfaction
(c) within a period of 45 days from the date of such payment or satisfaction
(d) within a period of 60 days from the date of such payment or satisfaction
38 On an application by company or the charge holder, Registrar may allow such intimation of
payment or satisfaction to be made within a period of
(a) 60 Days of such payment or satisfaction
(b) 300 Days of such payment or satisfaction
(c) 100 Days of such payment or satisfaction
(d) 90 Days of such payment or satisfaction
39 Upon receipt of intimation about satisfaction of charge, Registrar shall
(a) "cause a notice to be sent to the holder of the charge calling upon him to show cause
within such time not exceeding fourteen days, as to why payment or satisfaction in
full should not be recorded as intimated to the Registrar"
(b) record the same in his register as memorandum of satisfaction immediately
(c) both a and b
(d) Neither a nor b
40 Certificate of registration of satisfaction of charge shall be issued by Registrar in
(b) Form CHG-2 (d) Form CHG-l
41 Which section authorize the Registrar to enter the entry regarding Memorandum of
Satisfaction of charge Suo Moto
42 Where Entry of satisfaction is entered suo moto by Registrar, he shall
(a) inform the affected parties within 30 days of making the entry
(b) inform the affected parties within 15 days of making the entry
(c) inform the affected parties within 7 days of making the entry
(d) inform the affected parties within 10 days of making the entry
43 Eztech Machines Limited owns a plot of land which was mortgaged to Urbane Commercial
Bank Limited for raising term loan of ` 2.00 crore. The mortgage was duly registered with
the Central Registry. First loan installment of ` 50.00 lacs was released immediately after
sanction of term loan with the condition that subsequent three installments of ` 50.00
lacs shall be released as soon as the earlier released installment is utilized satisfactorily.
Is it necessary either for the company or the bank to register the charge on plot with the
concerned Registrar of Companies (ROC) when the mortgage is registered with the Central
Registry?

(a) " It is not necessary either for the bank or the company to register the charge on
plot of land with the concerned Registrar of Companies (ROC) when the mortgage is
registered with the Central Registry."
(b) "It is necessary to get the charge on plot on land registered with the concerned
Registrar of Companies (ROC) irrespective of the fact that mortgage is registered with
the Central Registry."
(c) "The charge on plot needs to be registered with the concerned Registrar of Companies
(ROC) only when the actual liability of the company with the Bank exceeds ₹ 1.00
crore."
(d) "The charge on plot needs to be registered with the concerned Registrar of Companies
(ROC) only when the term loan sanctioned by the bank to the company exceeds ` 2.00
crores."
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(d) (c) (c) (a) (a) (b) (c) (b) (c) (b) (c) (d) (b) (b) (d)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(b) (d) (a) (d) (d) (d) (b) (c) (a) (b) (a) (c) (b) (a) (d)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43.
(d) (b) (b) (a) (a) (b) (b) (b) (a) (a) (b) (a) (b)
82 Navkar Institute
CHAPTER-7 Management and Administration
CHAPTER-7
MANAGEMENT AND ADMINISTRATION
1. The authority of BOD regarding convening of meeting include

(a) AOA empowers Board to convene GM
(b) Notice given by secretary without Board's sanction is valid
(c) MOA empowers Board to convene GM
(d) Notice given by secretary without Board's sanction is invalid
2. The incorrect requirement which makes a notice improper & inadequate
(a) The length of notice should be 25 clear days
(b) The accidental omission of a notice doesnot invalidate proceedings
(c) The contents should include proxy
(d) The enclosure should include explanatory statement
3. In case of non profit making companies, notice of GM should be given within_days
(a) 14 (b) 15 (c) 21 (d) 22
4. For every special resolution passed the form attached should be
(a) Form No:33 (b) FormNo:10 (c) Form No:23 (d) None
5. The minimum quorum required for private company and public company for general meetings
is
(a) 5&2 (b) 10 & 2 (c) 2&5 (d) No
6. What does sec. 117(3) (g) underlines
(a) Resolutions passed at the board meetings need not be filed with ROC
(b) For ESOP passing of ordinary resolution is sufficient
(c) Private company need not appoint directors individually
(d) Rights of persons other than directors to stand for directorship shall not apply for
private company
7. Notice of statutory meeting should be given with a period not less than
(a) 21 clear days (c) 7 clear days
(b) 14 clear days (d) none
8. Notice of statutory meeting should attested by atleast_directors
(a) 3 (b) 2 (c) 4
9. Quorum should be presented at the
(a) commencement of meeting (c) end of the meeting
(b) middle of the meeting (d) any time during the meeting
10. _________meeting give an opportunity to the member to know, discuss on promotion &
formalities of the company
(a) General (b) EGM (c) Statutory (d) none

11. In the given below who are not required to hold Statutory General Meeting?
(a) private company (c) public company
(b) govt company (d) both A & B
12. In case of Statutory General Meeting receipts & payments are prepaid upto__days before the
date of report
(a) 3 (b) 5 (c) 7 (d) 9
13. In the given below who are required to hold AGM?
(a) public company (c) govt company
(b) private company (d) All the three
14. The company for conducting of AGM is extended by ROC for how many months
(a) 1 (b) 2 (c) 3 (d) 4
15. Which of the following company can hold AGM on Public Holiday
(a) public (c) Government
(b) private (d) Association Not for profit
16. _______ may grant exception to any class of companies with regard to the time & place of
AGM
(a) CG (b) ROC (c) NCLT (d) BCLT
17. ________can vote at the meeting even though not a member
(a) Body corporate (c) Governor
(b) president (d) all the above
18. The chairman on his own motion_________also order a poll
(a) must (b) should (c) may (d) none
19. Proxy need not to be a__________of the company
(a) shareholders (c) both A & B
(b) members (d) none
20. If the notice contain a special business then an _statement shall be enclosed
(a) explanatory (c) enquiry
(b) equity (d) none of the above
21. Proxy cannot vote on
(a) show of hands (c) Both A & B
(b) poll (d) none of the above
22. _______is the official recording of the proceedings of a meeting
(a) quorum (b) minutes (c) Both A & B (d) None
23. "The minutes of every general meeting shall be signed by____. "
(a) The chairman of the same meeting or the chairman of the next meeting
(b) " The chairman of the same meeting or in the the event of the death or inability of
that chairman, by a director duly authorised by the Board for this purpose"
(c) "The chairman of the same meeting" (d) The CS
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24. A company cannot use postal ballot for transacting_______________.

(a) Any ordinary business
(b) "Any business in respect of which directors or auditors have a right to be heard at the
meeting"
(d) "Any Special business"
25. " If the quorum is not present within half-an-hour from the time feed for holding an
extraordinary general meeting called by the requisitionists under section 100, then,________"
(a) he meeting shall adjourn to such day, time and place as may be determined by the
Board
(b) The members present shall be the quorum
(c) The meeting shall stand cancelled
(d) None of these
26. Where the annual return is to be certified by a company secretary in practice, the company
secretary in practice shallissue the certificate in Form No, MGT-8
(a) MGT-7 (b) MGT-8 (c) MGT-9 (d) MGT-14
27. Not more than_______ shall lapse between the date of one AGM and that of the next AGM.
27. The meeting of Board meeting and committee meeting shall be signed by____________.
(a) The chairman of the same meeting or the chairman of the next meeting
(b) " The chairman of the same meeting or in the the event of the death or inability of
that chairman, by a director dulyauthorised by the Board for this purpose "
(c) "The chairman of the same meeting"
(d) The CS
28. In case of a company having a share capital, one or more members holding________or more
of the paid up share capital of a company are eligible to requisition an EGM.
(a) 1/10th (b) 1/5th (c) 1/3rd (d) 50%
29. In case of a company having a share capital, one or more members holding________or more
of the paid up share capital of a company are eligible to requisition an EGM.
(a) 1/10th (b) 1/5th (c) 1/3rd (d) 50%
30. ____________are required to prepare a report on cach AGM and file the same with the
Registrar.
(a) All public companies (c) Listed public companies
(b) All GOVT. companies (d) both (1) and (2)
31. A company is incorporated on 13th January, 2019. The first financial year and second financial
year of the company shall end on_______and________respectively.
(a) 31st March, 2019;31st March, 2020
(b) 31at March, 2020;31st March, 2021

(c) 31st December, 2019;31st December, 2020

(d) none of these
32. If__________an EGM,________ may order an EGM to be called, held and conducted in such
manner as it thinks fit.
(a) It is impracticable to call or hold or conduct; The Tribunal
(b) A default is made in holding the Tribunal
(c) It is impracticable to call or hold or conduct; The Central Government
(d) A default is made in holding; The CG
33. A requisition proposing any resolution to the company shall be valid only if it is deposited
at least_ _______before_____.
(a) 2 weeks; The AGM (c) 2 weeks;Any general Meeting
(b) 6 weeks;The AGM (d) 6 weeks;Any genreal meeting
34. The scrutinizer shall submit his report as soon as possible after the last date of receipt of
postal ballots but not later than_______ thereof.
35. A private company shall serve the notice of closure on all the members not less than___________
prior to closure of the resiter of members or debenture holders or other security holders.
36. The entries in the registers of members or other security holders shall be made within _____
after the Board of Directors or its duly constituted committee approves the allotment or
transfer of shares, debentures or any other securities.
37. At a general meeting, a resolution shall be decided on a show of hands, unless________.
(a) A poll is demanded (c) either (1) or (2)
(b) Voting is carried out electronically (d) none of these
38. he AGM of____may be held at any place in Indin II consent is given in advance either in
writing or by electronic mode by_________
(a) A listed company;all the members
(b) An unlisted company: all the members
(c) A listed company; 95% of the members
(d) An unlisted company; 95% of the members
39. " If the quorum is not present within half-an-hour from the time feed for holding a general
meeting called by the requisitionists under section 100, then,________"
(a) he meeting shall adjourn to such day, time and place as may be determined by the
Board
(b) The members present shall be the quorum
(c) The meeting shall stand cancelled
(d) None of these
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40. In case of a company having 2,500 members an on the date of the meeting, the quorum shall
be members personally present.
(a) 5 (b) 15 (c) 30 (d) 50
41. In case of a company having a share capital, a poll shall be ordered to be taken by the
chairman if a demand for poll is made by any member(s) present in person or proxy holding
________of the total voting power or paid up share capital of not less than _________or such
higher amount as may be prescribed.
(a) 1/10th; Rs. 5 lakh (c) 1%; Rs. 5 lakh
(b) 1/5th; Rs. 1 lakh (d) 1%; Rs. 1 lakh
42. "Statement (1): Special notice is required for proposing a resolution for
appointing a person, other than the retiring auditor, as an auditor at the AGM.
Statement (2): Special notice is required for proposing a resolution for removing an auditor
before the expiry of his term of office."
(a) Only Statement (1) is correct (c) Both statements are correct
(b) Only Statement (2) is correct (d) none of these statement are correct
43. A person can act as proxy on behalf of members holding in the aggregate not more
than____________the company carrying voting rights.
(a) 5% (b) 10% (c) 20% (d) 25%
44. Statement(1): The provisions relating to voting through electronic means apply
to all companies whose equity shares are listed on a recognized stock exchange.
Statement (2): The provisions relating to voting through electronic means apply to all
companies having 5,000 or more members."
45. The Registrar may, for any special reason, extend the time for holding__________ by any
period not exceeding________.
(a) The first AGM; 3 months
(b) Any AGM other than The first AGM; 3 months
(c) The first AGM; 6 months
(d) Any AGM other than The first AGM; 6 months
46. The register of members and the index of members shall be preserved__________
(a) For at least 4 years (c) For at least 8 years
(b) For at least 6 years (d) Permanantly
47. ___________are not required to transact any business through postal ballot.
(a) One Person Companies
(b) Companies having Members upto 200
(d) Unlisted company

48. "Where any declaration is received by the company from any significant beneficial
owner, the company shall file a return in Form No.__with the Registrar in respect of such
declaration,within___ from the date of receipt of declaration by it. "
(a) BEN-1; 30 days (c) BEN-2; 30 days
(b) BEN-1; 60 days (d) BEN-2; 60 days
49. ____________ omission to give notice of a general meeting shall not invalidate the proceedings
of the general meeting.
(a) Deliberate (b) Accidental (c) Planned (d) Strategic
50. All __________incurred by the requisitionists by reason of the failure of the Board to call EGM
shall be paid to the requisitionists by______.
(a) Expenses; the defaulting directors
(b) Reasonable expenses;the defaulting directors
(c) Expenses; The company
(d) Reasonable expenses;the company
51. "Statement (1): If a poll is demanded on the election of the Chairman, it shall be taken within
48 hours of demand for poll. Statement 2): On a poll being taken the Chairman elected on a
show of hands shall continue to be the Chairman of the meeting."
52. AGM shall be called for a day which is not a_______ holiday.
(a) public (b) bank (c) Gazetted (d) National
53. If AGM is not held as per the provisions of section 96,______ may make an application
to_______.
(a) Any director; the tribunal
(b) "Any member; the Tribunal"
(c) " Any director; the Central Government"
(d) " Any member; the Central Government"
54. A person can act as proxy on behalf of members not exceeding_____
(a) 20 (b) 25 (c) 50 (d) 100
55. Where a notice of general meeting is sent by post, it shall be deemed to be served at the
expiration of______after the letter containing the name is posted.
(a) 24 hours (b) 48 hours (c) 72 hours (d) 96 hours
56. In case of a company having a share capital, one or more members holding or more of the
paid up share capital of a company are eligible to propose any resolution to the company
and require the company to move such resolution at__________.
(a) "1/10th; any general meeting" (c) 1/10th; ensuing AGM
(b) "1/5th; any general meeting" (d) 1/5th; ensuing AGM
57. Every company shall prepare its annual return in Form No________
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58. On receipt of a special notice, the company shall give notice of the intention to move the
resolution to all its members atleast________________ before the date of the general meeting
(excluding the day on which such notice is given and the day of thegeneral meeting).
59. Any general meeting may be called by giving at least ____clear days' notice
(a) 7 (b) 14 (c) 21 (d) 30
60. " Statement (1): Special notice is required for proposing a resolution for appointing a new
director at an AGM Statement (2): Special notice is required for proposing a resolution for
removing a director before the expiry of his to office."
61. "Statement(1): Remote e-voting includes voting by electronic means. Statement (2): Remote
e-voting means voting at a general meeting through an electronic voting system"
62. The minutes of every general meeting shall be prepared and signed within 30 days of_________.
(a) The conclusion of the meeting
(b) The commencement of the original meeting
(c) either (1) or (2) as per article
(d) none of these
63. "In case of voting by postal ballot, the assent or dissent received after_______
treated as if reply from the member has not been received."
64. An AGM may be called by giving a shorter notice of consent, in writing or by electronic
mode, is accorded thereto by not less than ______ of the members entitled to vote thereat.
(a) 90% (b) 95% (c) 100% (d) None
65. The annual return shall be filed with the Registrar within_________of the date on which AGM
is held.
(a) 30 DAYS (b) 45 DAYS (c) 60 DAYS (d) 90 DAYS
66. Where the Tribunal make an order calling an AGM of a company, it _________direct that I
member ___________shall be the quorum.
(a) Shall; present In person or proxy (c) Shall; present In person
(b) May; present In person or proxy (d) May; present In person
67. "In respect of an AGM, other than the first AGM, a company in required to satisfy________ of
the following requirements. (1)AGM is to be held within 6 months of close of the relevant
financial year. (2) Not more than 15 months shall lapse between the date of one AGM and
that of the next AGM. (3)

AGM is to be held in each calendar year. "

(a) any one (b) any two (c) all three (d) none
68. The poll shall be taken forthwith if the question on which poll is demanded is________________.
(a) Adjournment of GM (c) Either or
(b) Appointment of chairman of GM (d) None of these
69. In case the number of members as on the date of meeting is____, The quorum shall be ______
members personally Present.
(a) More than 1000 but upto 5000;30 (c) upto 1000;7
(b) More than 5000;50 (d) none of these
70. Explanatory statement shall be annexed to the notice for transacting every item of_________
(a) Ordinary Business (c) Both(1) and (2)
(b) Special business (d) Business reqyiring special notice
71. A company is empowered to close to register of members for a maximum period of_________
IN A YEAR
72. A requisition requiring a company to circulate any statement with respect to any matter to
be dealt with at_____ shall be valid only if it is deposited at least____ before such_____.
(a) Any general meeting;2 weeks;general meeting
(b) Any generak meeting;6 weeks;General meeting
(c) An AGM;2 weeks;AGM
(d) An AGM;6 weeks;AGM
73. An AGM, other than the first AGM, shall be held within____ of close of____.
(a) "6 months; relevant fInancial year" (c) " 6 months; relevant calendar year"
(b) 9 months; relevant financial year (d) " 9 months;relevant calendar year"
74. The AGM of a listed company shall be held at_________.
(a) The registered office of the company
(b) "some other place within the city, town or village in which the registered office is
situated"
(c) Either (1) or (2)
(d) Any place within India
75. A requisition for calling an EGM shall not be valid if it does not specify______.
(a) The matter for the consideration of which EGM la to be called
(b) " The reason for the matters proposed to be considered "
(c) either (1) or (2) or both
(d) none of these
76. The company shall maintain a register of significant beneficial owners in Form
No.______________
(a) BEN-1 (b) BEN-2 (c) BEN-3 (d) BEN-4
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77. The report on AGM to be filed with the Registrar shall be in Form No._______
78. The company shall not be bound to circulate any statement with respect to any matter to
be dealt with at any general meeting is satisfied that the rights conferred under section 111
are being abused to secure needless publicity for defamatory matter.
(a) the CG (c) The Court
(b) The Tribunal (d) None of these
79. " Statement (1): On a poll being taken, a member or proxy need not une all his votes.
Statement (2): On a poll being taken, a member or proxy need not cast in the same way all
the votes he uses."
80. ____________Is entitled to receive the notice of every general meeting.
(a) Every member (c) The Registrar
(b) Every promoter (d) All of these
81. The Tribunal may order an EGM to be called, held and conducted__________
(a) On the application of a member (c) Suo moto
(b) On the application of director (d) any of these
82. In case of an OPC,__________shall be deemed to be the date of the meeting.
(a) "The date of despatch of notice of the general meeting"
(b) The date of signing the minute-book by the member
(c) The date of conclusion of the genral meeting
(d) The date of commencement of the general meeting
83. A resolution passed at an adjourned meeting shall be treated to have been passed on the
date_________.
(a) of original general meeting (c) either (1) or (2)
(b) On which it was in fact passed (d) either (1) or (2) as per article
84. The copies of the minute book of any general meeting shall be made available by the company
to any member within_______ request made.
(a) 3 working days (c) 10 working days
(b) 7 working days (d) 15 working days
85. First AGM is to be held within _____of close of______.
(a) " 6 months; first financial year" (c) " 6 months; first calendar year"
(b) 9 months; first financial year (d) "9 months; first calendar year"
86. The registers and indices and copies of annual return shall be kept at the registered office
of the company or at any other place in India, if more than_________ of the total number of
members reside at such place and in passed in the general meeting.
(a) 10%; an ordinary resolution (b) 20%; an ordinary resolution

(c) 10%; a special resolution (d) 20%; a special resolution

87. A notice of general meeting may be sent by e-mail as______ or
(a) A text
(b) An attachment to email
(c) A notification providing electronic link or Uniform Resource Locator for accessing
such notice
(d) any of these
88. Every Company limited by shares shall maintain the register of members inj form no:
89. In case the provisions relating to voting through electronic means apply to a company, the
scrutinizer(s) shall make, not later than_________ of conclusion of the general meeting, a
consolidated scrutinizer's report to the Chairman.
90. Any provision contained in the articles which specifies or requires_______ a period than 48
hours before a meeting of the company, for depositing with the company any instrument
appointing a proxy, shall have effect as if a period of 48 hours had been specified in or
required by such provision for such deposit.
(a) lONGER (c) either (1) or (2)
(b) Shorter (d) none of the above
91. An individual who holds beneficial interest of not less than_______or such other percantage
as may be prescribed in shares of a company shall be termed as significant beneficial owner.
(a) 10% (b) 20% (c) 25% (d) 50%
92. " Statement (1): In an extraordinary general meeting, all business shall be deemed as ordinary
business. Statement (2): In an annual general meeting, no business shall be deemed as
special business."
(a) only statement 1 is correct (c) Both statements are correct
(b) only statement 2 is correct (d) none of these statement are correct
93. Any member in entitled to inspect the proxies deposited with the company only if_____
notice is given to the company.
(a) 1 DAY (b) 2 days (c) 3 days (d) 7 days
94. "On receipt of a valid requisition, the Board shall within_______ proceed to call an EGM to be
held not later than________ from the date of deposit of requisition"
(a) 7 DAYS,21 DAYS (c) 14 days,45 days
(b) 14 days,30 days (d) 21 days,45 days
95. The requisitionists ____propose a date for holding the EGM .The requisition shall be deposited
at least____ before such proposed date for holding the EGM
(a) May;14 (b) SHall;14 (c) May;21 (d) SHall;21
96. AGM shall be called during business hours, ie, between______________
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(a) 9 am and 5 pm (c) 10 am and 5 pm

(b) 9 am and 6 pm (d) 10 am and 6 pm
97. "Where the Board of directors of a company, other than a company which is___
of a company incorporated outside India, calls an EGM, such EGM shall be held at a place
within India"
(a) A subsidiary (c) A holding company
(b) A wholly owned subsidiary (d) either (1) or (3)
98. The registers shall be maintained at the registered office of the company unless ______is
passed in a general meeting authorising the keeping of the register at any other place
within the city, town or village in which the registered office is situated or any other place
in India in which more than______ of the total number of members reside.
(a) An ordinary resolution;1/5th (c) An special resolution;1/20th
(b) An ordinary resolution;1/10th (d) An special resolution;1/10th
99. Every Individual who acquires a significant beneficial ownership in a company, shall file a
declaration in Form No____ to the company within_______ of acquiring such significant
beneficial ownership.
(a) BEN-1; 30 days (c) BEN-2; 30 days
(b) BEN-1; 60 days (d) BEN-2; 60 days
100. If special notice is required to move a resolution at a general meeting, then, the notice of
the intention to move such a resolution shall be given to the company not earlier than______
before the date ofthe general meeting but at least________ before the general meeting
(excluding the day on which such notice is given and the day of the general meeting).
(a) 1 month; 7 days (c) 6 months; 21 days
(b) 3 months; 14 days (d) 6 months; 30 days
101. Cut-off date means a date not earlier than______ before the date of general meeting for
determining the eligibility to vote by electronic means or in general meeting.
102. "Statement (1): A poll cannot be taken before declaration of the result of voting on a show of hands.
Statement (2): A poll may be taken on declaration of result of voting on show of hands."
103. Within_____ of any entry made in any foreign register, the company shall transmit a copy of
such entry to its registered office in india.
104. "The minutes books of general meetings shall be preserved__________."
(a) For a period of 4 years (c) For a period of 8 years
(b) For a period of 6 years (d) Permanantly
105. "Statement (1): A proxy has no right to speak at the meeting. Statement (2): A proxy can

vote on a show of hands."

106. An instrument appointing a proxy, if in Form No. shall not be questioned on the ground
that it fails to comply with any special requirements specified for such instrument by the
articles.
107. "The extract of the annual return shall be in Form No._______"
108. On receipt of a valid requisition. If the Board fails to call an EGM, it may be called by the
requisitionists themselves within _______from the date of deposit of the requisition.
(a) 6 week (b) 45 days (c) 60 days (d) 3 months
109. The Index shall not be necessary in case the number of members in less than _
(a) 20 (b) 50 (c) 100 (d) 200
110. Statement (1): The articles of a company may provide a member of a company having no
share capital shall be company having no share capital Statement (2): If the articles of a
company do not provide otherwise, the provisions relating to proxies shall not apply to a
company having no share capital.
111. The facility for remote e-voting shall remain open for not less than_________ and shall close
at ____on the date preceding the date of general meeting.
(a) 2 days; 5 PM (c) 3 days; 5 pm
(b) 2 days; 6 pm (d) 3 days; 6 pm
112. The company shall cause an advertisement to be published stating that the ballot papers for
voting by postal ballot have been despatched. The advertisement shall be published at least
________before the date of beginning of the voting period.
113. During a general meeting, a company ______to provide the same electronic voting system
as used during_________.
(a) Is bound; remote e-voting (c) Is bound; postal ballot
(b) May opt; remote e-voting (d) May opt; postal ballot
114. A company shall not restrict the voting right of any member on the ground that_________.
(a) Calls on shares payable by the member have not been paid
(b) "he company has, and has exercised, any right of lien on shares"
(d) none of these
115. "Inspection of minutes book of general meetings can be made during business hours, subject
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to reasonable restrictions through the articles or a resolution passed in a general meeting,

so that at least ____________in each business day are allowed for inspection."
(a) 1 hour (b) 2 hours (c) 3 hours (d) 4 hours
116. No matter shall be included in the minutes, if the chairman is of the opinion that it
is___________
(a) Defamatory of any person
(b) Irrelevant or immaterial
(c) Detrimental to the interests of the company
(d) any of these
117. If a default in made in the company and every officer of the company who is in default
shall be punishable with fine upto Rs. 1 lakh and fine upto Rs. 5,000 per day in case of a
continuing default.
(a) Holding AGM under sec-96
(b) Holding AGM under sec-97
(c) Holding AGM under sec-98
(d) Holding AGM under sec-96 or Sec-97 or Sec-98
118. Where any declaration in respect of beneficial interest in field with a company, the company
shall, within_________, file a return with the Registrar.
119. The company shall provide an advance opportunity at least ______to the members to register
their e-mail addresses and to update their email addresses..
(a) Once in a financial year (c) thrice in a financial year
(b) twice in a financial year (d) Once in every quarter
120. "If special business relates to, or affects, any other company, the extent of shareholding in
that other company of every promoter, director, manager and every other key managerial
person shall be disclosed, if the extent of such shareholding is______or more of the paid up
share capital of that other company."
(a) 2% (b) 5% (c) 10% (d) 20%
121. A company is empowered to close to register of members for a maximum period of__________
at any one time.
122. _______ shall exercise absolute discretion with regard to the inclusion or non-inclusion of
any matter in minutes
(a) The CS (c) The chairman
(b) The BOD (d) The MD
123. special notice is required to move a resolution at a general meeting, then, the notice of
the intention to move such a resolution shall be given to the company by members holding
not less than ______of total voting power or holding paid up Share capital of not less

than_______.
(a) 1%;5 lakh (c) 1%; Rs. 10 lakh
(b) 2%; Rs. 5 lakh (d) 2%; Rs. 10 lakh
124. Every company which issues or allots debentures or any other security shall maintain a
separate register of debenture holders or security holders, as the case may be, for each type
of debentures or other securities in Form NO____.
125. Quorum needs to be present________
(a) " At the commencement of GM"
(b) "At the time of panaing each and every resolution"
(c) Both and
(d) Any time during the meeting
126. A copy of every special resolution together with explanatory statement is to be filed with
the Registrar within passing the special resolution.
127 ROC can provide an extension in conducting meeting up to—
(a) AGM upto 3 months
(b) Subsequent AGM for 3 months
(c) Subsequent AGM upto 3 months
(d) First AGM upto 3 months
128 In case of Government company, AGM shall be held at:-
(a) "Registered office of the company or at some other place within the city town or
village in which the registered office of the company is situated"
(b) "Registered office of the company or such other place as the Central Government may
approve in this behalf "
(c) Head office of company
(d) Registered office of the company or such other place as the Tribunal may approve in
this behalf
129 Where a default is occurred in convening AGM,
(a) Member may requisition for convening such meeting
(b) Tribunal may convene such meeting
(c) Tribunal may direct calling of AGM
(d) Member may request CG to intervene
130 Where AGM is held upon direction of Tribunal u/s 97 then
(a) Any such meeting shall be deemed to be a General Meeting
(b) Any such meeting shall be deemed to be a Annual General Meeting
(c) Any such meeting shall be deemed to be a General Meeting by Tribunal
(d) None of above
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131 If the default is made by the company in holding Annual General Meeting in accordance with
Section 96 or In complying in any direction given by Tribunal under Section 97
(a) "Company and its every officer who are at default shall be punishable with fine upto
`50,000 and in case of the continuing default with a further fine upto `5,000 for every
day during continuation of default"
(b) "Company and its every officer who are at default shall be punishable with fine upto
`50,000 and in case of the continuing default with a further fine upto `2,500 for every
day during continuation of default"
(c) "Company and its every officer who are at default shall be punishable with fine upto
`1,00,000 and in case of the continuing default with a further fine upto `5,000 for
every day during continuation of default"
(d) " Company and its every officer who are at default shall be punishable with fine upto
`5,00,000 and in case of the continuing default with a further fine upto `5,000 for
every day during continuation of default"
132 Extra ordinary General Meeting may be called by
(a) Board of Directors (c) Tribunal
(b) Members (d) All of them
133 For company having share capital, requisitionist shall means
(a) Members holding at least 10% of the paid up share capital of the company
(b) Members having at least 1/10 of the total voting power
(c) Members holding at least 10% of the paid up share capital of the company or paid up
share capital of 5,00,000
(d) Members holding at least 5% of the paid up share capital of the company
134 Where any member want to convene requisition, he shall deposit the requisition
(a) At head office of company
(b) At registered office of company
(c) At any office of company
(d) Submission through electronic mode to company
135 Upon submission of requisition be members, Board of directors shall
(a) "Proceed within 7 days of the deposit of the requisition to convene a meeting which
must be held within 90 days of such deposit of the requisition with the company"
(b) " Proceed within 21 days of the deposit of the requisition to convene a meeting which
(c) " Proceed within 21 days of the deposit of the requisition to convene a meeting which
(d) " Proceed within 21 days of the deposit of the requisition to convene a meeting which
must be held within 3 months of such deposit of the requisition with the company"
136 If quorum remains absent in a meeting called u/s 100(4), the meeting

(a) Meeting stand cancelled

(b) Meeting stand adjourned to next week same time same location
(c) Meeting to be convened by Tribunal now
(d) Meeting to be convened by Tribunal now
137 Incase of failure on part of Board to convene EGM
(a) Members may requisition convening of an extraordinary general meeting
(b) Requisitionist may requisition convening of an extraordinary general meeting
(c) Tribunal may requisition convening of an extraordinary general meeting
(d) Tribunal may requisition convening of an extraordinary general meeting
138 Requistionists should convene meeting at
(a) Registered office or in the same city or town where Registered office is situated
(b) "Registered office or in the same city or town where Registered office is situated and
such meeting should be convened on working day"
(c) "Registered office or in the same city or town where Registered office is situated and
such meeting should be convened on working day at business hours"
(d) "Registered office or in the same city or town where Registered office is situated and
such meeting should be convened on any day other than national holiday"
139 Where Board proceed to requisition EGM upon an application by members, notice of any such
meeting shall be given to
(a) "Members whose names appear in the Register of members of the company within
21 days on which the requistionists deposit with the Company a valid requisition for
calling an extraordinary general meeting"
(b) " Members whose names appear in the Register of members of the company within
(c) " Members whose names appear in the Register of members of the company within
(d) "Members whose names appear in the Register of members of the company within
140 Where meeting is convened u/s 100(4), Notice shall be given through
(a) Normal post (c) Speed Post (e) All of above
(b) Registered Post (d) Electronic Mode (f ) B, c and d only
141 As per Section 121, which company shall prepare in the prescribed manner a report on
each annual general meeting including the confirmation to the effect that the meeting
was convened, held and conducted as per the provisions of this Act and the rules made
thereunder
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(a) All companies (c) Listed companies only

(b) All public limited companies (d) Private company only
142 Service on the joint holder may made by serving it on
(a) All joint holders together
(b) In name of any of them
(c) the one whose name appears first in the register of members.
(d) None of above
143 Incase of Section 8 companies, notice of 21 days as specified in Section 101 shall be considered
as
144 Any omission to serve notice of meeting on a member on the mistaken ground that he is not
a shareholder cannot be said to be an accidental omission, this view was taken by court in
the case of
(a) Mussehvhite v C.H. Musselwhite & Sons Ltd
(b) Meenakshi Cotton Mills Limited
(c) Howard v Patent Ivory Manufacturing limited
(d) Kelnerv Baxter
145 Who out of following shall not be entitled to have notice of EGM
(a) Preference share holder (c) Auditor
(b) Non Executive Director (d) Company Secretary
146 Which out of the following need not be required to be placed in notice of AGM, wherein
Ordinary business are proposed
(a) Name of company (c) Explanatory Statement
(b) Proposed Agenda (d) Proxy form
147 AGM may be convened by giving shorter notice provided consent has been obtained from
(b) Majority in numbers having 95% of the paid up share capital
(c) Members having paid up share capital of ?5,00,000 or voting power of atleast 1%
148 Extra Ordinary General Meeting may be convened by giving shorter notice provided consent
has been obtained from
(b) Majority in numbers having 95% of the paid up share capital having voting power
(c) Majority in numbers having 95% of the paid up share capital
149 A notice may be sent through e-mail
(a) as a text or (b) as an attachment to e-mail or
(c) as a notification providing electronic link or (d) Any of above

150 The notice of the general meeting of the company shall be simultaneously
(a) Dispatched to ROC for its records
(b) Dispatched to Central Government for its records
(c) Placed on website of company on the website as may be notified by the Central
Government.
(d) Placed on website, if any of company on the website as may be notified by the Central
Government.
151 Which out of the following is not an ordinary business u/s 102
(a) Consideration of financial statements and the reports of the Board of Directors and
auditors
(b) Declaration of Dividend
(c) Appointment of Directors in the place of those retiring
(d) Rectification of name of company
152 Out of the following who shall not be considered as member personally present
(a) A member of the company
(b) Authorized representative of a body corporate.
(c) Representative of President/Governor of the state
(d) Person appearing on behalf of representative of body corporate
153 Proxy can become part of quorum in following circumstances
(a) In case of the Annual general meeting convened, conducted and held by the Tribunal
(b) " In case of the General meeting other than Annual General Meeting convened,
conducted and held bythe Tribunal."
(c) Extra ordinary General meeting convened at requisition of Member
(d) A or b only
154 If all the members are present, it is immaterial that the quorum required is more than the
total number of members, this view was upheld in the case of
(a) Musselwhite v C.H. Mussel-white & Sons Ltd
(b) Re Express Engineering Works Ltd
(c) Howard v Patent Ivoiy Manufacturing limited
(d) Kelnerw Baxter
155 Suppose a poll is demanded in relation to election of chair, then what would be the legal
position in this regard
(a) It shall be ensured by chairperson of last meeting within 48 hrs of its demand
(b) It shall be ensured by chairperson elected as a result of show of hand within 48 hrs of
its demand
(c) It shall be ensured by chairperson elected as a result of show of hand forthwith
(d) It shall be ensured by chairperson elected as a result of show of hand within 24 hrs of
its demand
100 Navkar Institute

156 Which out of the following is true about appointment of proxy by Section 8 company
(a) A member of a company registered under section 8 shall not be entitled to appoint
any other person
(b) "A member of a company registered under section 8 shall not be entitled to appoint
any other person as his proxy unless such other person is also a member of such
company."
(c) "A member of a company registered under section 8 shall not be entitled to appoint
any other person as his proxy unless article provide so"
(d) None of above
157 As per Section 105, a proxy can max. represent
(a) "members not exceeding 10 and holding in the aggregate not more than 50% of the
total share capital of the company carrying voting rights"
(b) "members not exceeding 50 and holding in the aggregate not more than 10% of the
(c) "members not exceeding 50 and holding in the aggregate not more than 20%o of the
total share capital of the company carrying voting rights "
(d) "members not exceeding 10 and holding in the aggregate not more than 20% of the
158 Which one of the following required ordinary resolution?
(a) to change the name of the company (c) to reduce the share capital
(b) to alter the articles of association (d) to declare dividends.
159 Form for appointing a proxy shall be
(a) MGT-14 (b) MGT-11 (c) INC-11 (d) INC-14
160 Member shall be entitled to inspect proxy form during
(a) "the period beginning 2 hours before the time fixed for the commencement of the
meeting and ending with the commencement of the meeting"
(b) "the period beginning 24 hours before the time fixed for the commencement of the
meeting and ending with the commencement of the meeting"
(c) "the period beginning 2 hours before the time fixed for the commencement of the
meeting and ending with the conclusion of the meeting"
(d) "the period beginning 24 hours before the time fixed for the commencement of the
meeting and ending with the conclusion of the meeting"
161 Where a member want to inspect proxy form, notice ofWhere a member want to inspect
proxy form, notice of
(a) Atleast 3 days (c) Atleast 5 days
(b) Max 3 days (d) Max 5 days
162 Where a company is a member of another company, it may attend the meeting of any other
company through a person called as

(a) Proxy (c) Representative

(b) Authorised Representative (d) Proxy of Body Corporate
163 In case company not having any share capital, right to demand poll shall remain with
(a) "Any member or members present in person or by proxy and having at least l/5th of total voting
power"
(b) " Any member or members present in person or by proxy and having at least 1/10th of
total voting power or Paid up capital of 5,00,000"
(c) "Any member or members present in person or by proxy and having at least l/5th of total voting
power or Paid up capital of 5,00,000"
(d) " Any member or members present in person or by proxy and having at least 1/10th of
total voting power"
164 Out of the following, in which of the scenario no restriction on voting power may be imposed
(a) In case of non payment of Calls due on shares
(b) In case of non payment of other dues against the members
(c) Where right of lien is exercised by the company in respect of shares
(d) Where right of lien is exercised by the company in respect of shares
165 Facility of casting votes by a member using an electronic voting system from a place other
than venue of a general meeting shall be termed as:
(a) Voting by Electronic Means (c) Remote E-Voting
(b) Voting by Electronic Mode (d) None of above
166 As per Section 108, the facility for remote e-voting shall remain open for
(a) not less than 7 days and shall close at immediate preceding business day
(b) not less than 3 days and shall close at 5.00 p.m. on the date preceding the date of the
general meeting
(c) not less than 2 days and shall close at 5.00 p.m. on the date preceding the date of the
general meeting
(d) not less than 5 days and shall close at 5.00 p.m. on the date preceding the date of the
general meeting
167 After the conclusion of voting at the general meeting, the scrutiniser shall, immediately
first count the votes cast
(a) At General Meeting (c) Both together
(b) Through Remote E Voting (d) Depend upon decision of chairperson
168 A company's own articles may prescribe for
(a) special resolution where under the Act only an ordinary resolution is necessary
(b) ordinary resolution where under the Act only special resolution is necessary
(c) Both a and b are allowed
(d) None of a and b shall be allowed
169 According to section 116 of the Companies Act, 2013, where a resolution is passed at an

adjourned meeting of a company, then, the resolution shall, for all purposes, be treated as
having been passed on the date on
(a) Meeting was originally convened
(b) which notice of general meeting was dispatched
(c) which it was in fact passed, and shall not be deemed to have been passed on any
earlier date
(d) None of above
170 As per Section 115, A special notice required to be given to the company shall be signed,
either individually or collectively by such number of members holding
(a) "Atleast 1 % of total voting power or holding shares on which an aggregate sum upto
5,00,000 hasbeen paid up on the date of the notice"
(b) "Atleast 1 % of total voting power or holding shares on which an aggregate sum upto
2,00,000 has been paid up on the date of the notice"
(c) "Atleast 5 % of total voting power or holding shares on which an aggregate sum upto
(d) "Atleast 10 % of total voting power or holding shares on which an aggregate sum upto
171 Out of the following, no special notice shall be required for following resolution
(a) To provide that a retiring auditor shall not be re-appointed
(b) To appoint an auditor other than retiring one
(c) To appoint a director other than retiring one.
(d) To change the business of company
172 Where a member wishes to move requisition to proposes a resolution, he shall submit his
requisition
(a) At least 2 weeks before the meeting
(b) At least 4 weeks before the meeting
(c) At least 6 weeks before the meeting
(d) At least 14 days before the meeting
173 Process of keeping of a record of proceedings at a meeting including decision arrived at such
meeting, is termed as
(a) Minutes (c) Evidence
(b) Record Keeping (d) Books for general meeting
174 Every company shall maintain minutes of all proceedings of general meetings. Entries of the
proceedings must be made in the books kept for that purpose within
(a) 30 days of conclusion of meeting
(b) 30 days of start of meeting
(c) Before commencement of next meeting
(d) Before commencement of subsequent board meeting

175 As per Section 120, which out of the following company shall maintain its records in electronic
form
(a) "Every listed company or a company having not less than 10,000 shareholders,
debenture holders and other security holders"
(b) "Every company having not less than one thousand shareholders, debenture holders
and other security holders"
(c) "Every listed company or a company having not less than one thousand shareholders,
debenture holders and other security holders"
(d) " Every listed public company or a company having not less than one thousand
shareholders, debenture holders and other security holders"
176 Which out of the following shall be incorrect in relation to records to be maintained u/s 120
(a) "the records are maintained in the same formats and in accordance with all other
requirements as provided in the Act or the rules made there under;"
(b) the records must be capable of being readable, retrievable and reproducible in printed
form;
(c) "the records are capable of being dated and signed digitally wherever it is required under the
provisions of the Act or the rules made there under;"
(d) the records, once dated and signed digitally, shall be capable of being edited or altered;
177 In the current financial year Zunee Traders Limited, a non-listed company, has 556 members,
increased from 451 members which it had in the immediate previous financial year. For the
forthcoming Annual General Meeting (AGM), advise the company whether it is required to
provide to its members the facility to exercise their right to vote at this AGM by electronic
means
(a) " Since the company has more than 500 members it is required to provide to its
members the facility to exercise their right to vote at the forthcoming AGM by
electronic means."
(b) "Though the company is required to provide to its members the facility to exercise
their right to vote at the forthcoming AGM by electronic means because it has more
than 500 members, it can, as a onetime measure, seek exemption from ROC beforehand
and in that case, it need not provide facility of voting by electronic means."
(c) "Though the company is required to provide to its members the facility to exercise
their right to vote at the forthcoming AGM by electronic means because it has more
than 500 members, it can, as a onetime measure, seek exemption from ROC beforehand
and in that case, it need not provide facility of voting by electronic means."
(d) "Only a listed company is required to provide to its members the facility to exercise
their right to vote at the General Meetings by electronic means."

ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(a) (a) (a) (c) (c) (a) (a) (b) (a) (c) (d) (c) (a) (c) (d)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(a) (d) (c) (c) (a) (a) (b) (b) (c) (d) (b) (c) (a) (a) (c)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(b) (a) (b) (c) (a) (a) (c) (b) (a) (b) (a) (a) (b) (a) (b)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(d) (c) (c) (b) (d) (b) (d) (b) (d) (b) (c) (a) (b) (c) (b)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(d) (a) (c) (b) (c) (b) (c) (c) (d) (b) (b) (a) (a) (c) (a)
76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88 89. 90.
(c) (c) (a) (c) (a) (d) (b) (b) (b) (b) (c) (d) (a) (a) (a)
91. 92. 93 94. 95. 96. 97. 98. 99. 100. 101 102. 103. 104. 105.
(c) (d) (c) (d) (c) (b) (b) (d) (a) (b) (c) (b) (b) (d) (a)
106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120.
(b) (c) (d) (b) (c) (c) (b) (b) (d) (b) (d) (d) (d) (a) (a)
121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135.
(a) (c) (a) (a) (c) (b) (c) (b) (c) (b) (c) (d) (a) (b) (c)
136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150.
(a) (b) (d) (d) (f ) (c) (b) (a) (a) (d) (c) (a) (b) (d) (d)
151. 152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165.
(d) (d) (d) (b) (c) (b) (b) (d) (b) (d) (a) (c) (d) (d) (c)
166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. 177.
(b) (a) (a) (c) (a) (d) (c) (a) (a) (c) (d) (b)

CHAPTER-8 DECLARATION OF DIVIDEND PAYMENT OF DIVIDEND
CHAPTER-8
DECLARATION OF DIVIDEND PAYMENT OF DIVIDEND
1. Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which
matured four years back. However, 1000 such debentures of ? 100 each are still remaining
unclaimed and unpaid even after the maturity. State the period after which the company
needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain
unclaimed and unpaid.
(a) After the expiry of five years from the maturity date.
(b) After the expiry of six years from the maturity date
(c) After the expiry of seven years from the maturity date
(d) After the expiry of eight years from the maturity date.
2. Return paid on shares is___________
(a) interest (c) commission
(b) dividend (d) none of the above
3. To enable a company to pay dividends, a special authority is_______.
(a) not needed either in the memorandum or in the articles
(b) needed either in the memorandum or in the articles
(c) needed only in the memorandum
(d) needed only in the articles.
4. Dividend on preference capital will be paid_________.
(a) at a fixed rate (c) once in two years
(b) at a fluctuating rate (d) even when the does not have profit
5. In which of the following, interest or dividend is payable even if the company does not earn
profit?
(a) Equity capital (c) Debentures.
(b) Preference capital. (d) Bonds
6. XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to transfer
unpaid dividend to bank account even after 40 days from declaration of Dividend. In such
case how much interest will be payable?
(a) 8%p.a. (b) 16%p.a. (c) 10%p.a. (d) 12%p.a.
7. The rate of dividend proposed by the board may be increased or reduced by the members. Is
the given statement is -
(a) True (b) False
8. Before any dividend is declared , the following shall be setoff against profits of the Current
year-
(a) Losses of any Previous FY not provided for
(b) Depreciation of any Previous FY not provided for

(c) Either (a) or (b)

(d) Both (a) and (b)
9. The declaration of dividend at an annual general meeting is an item of ordinary business. A
Company may pay dividend in proportion to the amount paid up on snares, if the company
is so authorised by the Board.
(a) correct statement (c) Partly Correct Statement
(b) False Statement
10. The dividend for any financial year can be declared or paid out of
(a) Profits for that financial year
(b) Profits for any previous financial years and remaining undisturbed
(c) Both (a) and (b)
(d) Both (a) and (b) and out of free reserves.
11. In case of Joint holders ,the dividend shall be paid to
(a) The Joint holder ,who is authorised by all the joint holders in this regard
(b) All the joint holders equally
(c) The joint holder , who is first named in the register of members
(d) All the joint holder in proportion of money invested by them
12. Mode of payment of dividend -
(a) Cash and Kind
(b) Cheque, Electronic mode. Dividend Warrant
(d) Either (a) or (b)
13. The amount of the dividend shall be deposited by the company in__________in a separate
account within ________of declaration of such dividend
(a) A nationalised bank, 5 days (c) State Bank of India ,7 days
(b) A scheduled bank, 5 days (d) A nationalised bank ,7 days
14. if a dividend is declared but remains unpaid or unclaimed for-days from the date of its
dedaration
15. Transfer shall be made within-days to unpaid dividend amount of expiry of 30 days from the
date of declaration of dividend
(a) 7 days (b) 14 days (c) 21 days (d) 30 days 16.
17. If a Company fails to transfer the unpaid or unclaimed dividend to the Unpaid Dividend
Account ,the company shall be liable to pay interest @________per annum
(a) 9% (b) 12% (c) 15% (d) 18%
18. A Statement containing the names their last known addresses and the amount of unpaid
dividend to be paid to each person shall be prepared within_________days of transfer of
amount to unpaid dividend account.


19. Any money transferred to the Unpaid Dividend Account which remains unpaid for_________
from the date of such transfer shall be transferred by the company ,along with interest
accrued ,if any, to the investor Education and Protection Fund'
(a) 3 Years (b) 5 years (c) 7 years (d) 10 years
20. All such shares in respect of which dividend has not been paid or claimed for__________shall
be transferred by the company in the name of Investor Education and Protection fund .
(a) Any 7 years (c) Any 5years
(b) 7 consecutive years (d) 5 Consecutive years
21. The Central Government shall constitute ,by notification ,an authority for administration
of the Investor Education and Protection Fund consisting of a chair person and such other
members ,not exceeding_and a chief executive officer ,as the Central Government may
appoint
(a) 5 (b) 7 (c) 10 (d) 12
22. The Accounts of the f9nd shall be audited by -
(a) Statutory Auditor appointed by Central Govt.
(b) Joint Statutory Auditor appointed by Central Govt.
(c) Internal Auditor Appointed by the respective Company
(d) Comptroller and Auditor General
23. Can the application money received for allotment of securities which are due for refund and
remained unpaid for 7 years be credited to the Investor Education and Protection Fund. Is it
correct?
(a) True (c) Partly true
(b) False (d) Not at all possible
24. Can the sale proceeds of fractional shares arising out of issue of bonus shares, merger and
amalgamation and remained unpaid for 7 years be credited to the Investor Education and
Protection Fund. Is it correct?
(a) True (c) Partly true
(b) False (d) Not at all possible
25. The amount accumulated in the Investor Education and Protection Fund shall not be used
for________
(a) Reimbursement of legal expenses incurred in pursuing class action suits under section
37 and 245
(b) Refund in respect of unclaimed dividends ,matured debentures, application money due
for refund and interest thereon
(c) Donations to any financial institutions
(d) Distribution of any disgorged amount among eligible and identifiable applicants who
have suffered losses.

26. Where a transfer deed has been delivered to the company for registration ,but the transfer
of shares has not yet been registered by the company ,the company shall
(a) Pay the dividend to the registered shareholder ,if it is so authorised by the articles
(b) Pay the dividend to the transferor^ the transferee has authorised the company to do
so
(c) Transfer the dividend in relation to such shares to the Investor Educaion and Protection
Fund
(d) Transfer the dividend in relation to such shares to the unpaid dividend A/c
27. Where a transfer deed has been delivered to the Company for registration ,but the transfer
of shares has not yet been registered by the company ,any offer of right shares or bonus
shares made by the company
(a) Shall belong to the transferor (c) Shall remain pending
(b) Shall belong to the transferee (d) Shall be transferred to the fund
28. The Dividend shall be paid within_days from the date of________of dividend .
(a) 30,declaration (c) 30,recommendations
(b) 7,declaration (d) 7,recommendations
29. Dividend (other than interim dividend ) is declared by_______
(a) The Board (c) Either (a) or(b)
(b) The members (d) Both (a) and (b)
30. Punishment for Every director who is knowingly a party to default-
(a) Fine of Min X 500 per day and imprisonment max 6 months
(b) Fine of Min X 2000 per day and imprisonment max 12 months
(c) Fine of Min ? 5000 per day and imprisonment max 18 months
(d) Fine of Min X 1000 per day and imprisonment max 24 months
31. Mr. Mannan , a member of Moksh Ltd had given directions to the company regarding payment
of dividend ,but those directions could not be complied with. Consequently dividend could
not be paid to Mr. Mannan. Consider the following Statement:
(1) Moksh Ltd .has contravened the provisions of section 127, and is therefore, liable for
penalty under section 127.
(2) In case a company contravene the provisions of section 127, it shall be liable to pay
simple interest @12% per annum during the period for which the default continues.
(c) Both the Statements are correct
(d) None of the Statements is correct
32. Examine the validity of the given statement-
(1) The Board may declare interim dividend out of surplus in the profit and loss account
(2) The Board may declare interim dividend out of profits of the financial year for which

the interim dividend is sought to be declared.

(3) The Board may declare interim dividend out of profits generated in the financial year
till the quarter preceding the date of declaration of the interim dividend .
(4) The Board may declare interim dividend out of profits which have been transferred to
reserves.
(a) (1) and (3) are correct (c) (1) ,(2) and(3) are correct
(b) (2) and (3) are correct (d) All the Statements are correct.
3. If a Company has incurred loss upto ________ immediately preceding the date of declaration
of interim dividend then,the rate of interim dividend shall not be higher than the average
rate of dividends declared by the company during immediately preceding__financial years.
(a) The end of the financial year ,3 (c) The end of the financial year,5
(b) The end of the quarter,3 (d) The end of the quarter,5
34. Statement (1) : The Board may declare the interim dividend whether or not it is authorised
by the articles.
Statement (2) : The amount of interim dividend is to be compulsorily deposited in a scheduled
bank in a separate bank account ,within 7 days of passing the Board resolution declaring the
interim dividend.
(a) Only Statement (1) is correct (c) Both the statements are correct
(b) Only statement (2) is correct (d) None of the Statements are correct
35. A Ltd. Proposes to declare dividend out of accumulated profits earned by it in the previous
years and transferred to the free reserves . The rate of dividend declared by it shall not
exceed the average of the rates at which dividend was declared by it in the immediately
preceding ________financial years ,and the total amount to be drawn from reserves shall not
exceed_of the sum of its paid up share capital and free reserves as per the latest audited
financial statements.
(a) 3,175th (b) 5,175th (c) 3,1/10* (d) 5,1710th
36. B Ltd. has incurred loss for the financial year 2017-18. However, for the financial year
2017-18, B Ltd. proposes to declare dividend out of accumulated profits earned by it in the
previous years and transferred to the free reserves . Consider the following statements:
Statement (1): The total amount to be drawn from reserves shall not exceed 1/20* of the sum
of its paid up share capital and free reserves as per the latest audited financial statements.
Statement (2): Any Amount drawn from reserves shall first be utilised to set off the losses
incurred in the financial year for which the dividend is declared. Statement (3): The balance
of reserves after drawal from reserves shall not fall below 10% of its paid up share capital
as per the latest audited financial statements.
(a) Statements (1) and (2) are correct (c) Statements (2) and(3) are correct
(b) Only Statements (2) is correct (d) All the Statements are correct.

37. "The amount of the dividend shall be deposited by the company in__________ In a separate
account within of________declarations of such dividend."
(a) A nationalised bank; 5 days (c) State bank of India; 7 days
(b) A scheduled bank: 5 days (d) A nationalised bank; 7 days
38. If a company has incurred loss upto_______ immediately preceding the date of declaration
of interim dividend, then, the rate of interim dividend shall not be higher than the average
rate of , dividends declared by the company during immediately preceding_________ financial
years.
(a) The end of the financial year; 3 (c) The end of the financial year; 5
(b) The end of the quarter; 3 (d) The end of the quarter; 5
39. If a company fails to transfer the unpaid or unclaimed dividend to the Unpaid Dividend
Account, the company shall be liable to pay interest @_______% per annum.
(a) 9 (b) 12 (c) 15 (d) 18
40. "Statement (1): The Board may declare interim dividend out of surplus in the P&L Account
Statement (2): The Board may declare interim dividend out of profits of the financial year for
which interim dividend is sought to be declared. Statement (3): The Board may declare interim
dividend out of profits generated in the financial year preceding the date of declaration of
the interim dividend. Statement (4): The Board may declare interim dividend out of profits
which have been transferred to reserves."
(a) Statements 1 and 3 are correct (c) Statements 1,2 and 3 are correct
(b) Statements 2 and 3 are correct (d) all of the statements are correct
41. Where a transfer deed has been delivered to the company for registration, but the transfer
of shares has not yet been registered by the company, any offer of right shares or bonus
shares made by the company_________
(a) Shall belong to the transferor (c) Shall remain pending
(b) Shall belong to the transferee (d) Shall be transfereed to the fund
42. A company shall not declare any dividend on __________if it has failed to comply with the
provisions of section 73 or section 74
(a) Equity shares
(b) Preference shares
(c) any shares, whether equity or preference
43. where a transfer deed has been delivered to the company for registration, but the transfer
of shares has not yet been registered by the company, the company shall
(a) Pay the dividend to the registered shareholder,if it is so authorised by the articles
(b) Pay the dividend to the trasnferor if the transferee has authorised the company to do
so.
(c) Transfer the dividend in relation to such shares ti the investor education and protection
fund
(d) Transfer the dividend in relation to such shares to the unpaid dividend account
44. The rate of dividend proposed by the Board may be ____by the members
(a) Increased (b) Reduced (c) both 1 & 2 (d) none
45. The amount accumulated in the Investor Education and Protection Fund shall not be used
for____________.
(a) Reimbursement of legal expenses incurred in pursuing class action suits under section
37 and 245
(b) Refund in respect of unclaimed dividend matured deposits,matured debentures
,application money due for refund and interest thereon
(c) Grants or donations bt the CG
(d) Distribution of any disgorged amount among eligible and identifiable applicants who
have have suffered losses
46. The Central Government shall constitute, by notification, an Authority for administration
of the Investor Education and Protection And consisting of a chairperson and such other
members, not exceeding________ and a chief executive officer, an the Central Government
may appoint.
(a) 5 (b) 7 (c) 10 (d) 12
47. Dividend (other than interim dividend)is declared by______
(a) The board (c) either (1) or (2)
(b) The members (d) both 1 & 2
48. ALL such shares in respect of which dividend has not been paid or claimed for __________
shall be transferred by the company in theme of Investor Education and Protection Fund.
(a) Any 7 years (c) Any 5 years
(b) 7 consecutive years (d) 5 consecutive years
49. "B Ltd. has incurred loss for the financial year 2017-2018. However, for the
financial year 2017-2018, B Ltd. proposes to declare dividend out of accumulated
profits earned by it in the previous years and transferred to the free reserves.
Consider the following statements: Statement (1): The total amount to be drawn from
reserves shall not exceed 1/20th of the sum of its paid-up share capital and free reserves
as per the latest audited financial statements.for which the dividend is declared.
Statement (2): Any amount drawn from reserves shall first be utilised to set off the
losses incurred in the financial year per the latest audited financial statements.
Statement (3): The balance of reserves after drawal from reserves shall not fall below 10%
of its paid up share capital as per the latest audit financial statements."
(a) Statements (1) and (2) are correct
(b) only statement 2 is correct
(c) Statements (3) and (2) are correct
(d) all the statements are correct

50. "A Ltd. proposes to declare dividend out of accumulated profits earned by it in the previous year
and transferred to the free reserves. The rate of dividend declared by it shall not exceed the
average of the rates at which dividend was declared by it in the immediately preceding______
financial years, and the total amount to be drawn from reserves shall not exceed________
of the sum of its paid-up share capital and free reserves as per the latest audited financial
statements."
(a) 3; 1/5th (b) 5; 1/5th (c) 3; 1/10th (d) 5; 1/10th
51. In case of joint holders, the dividend shall be paid to__________
(a) The Joint holder, who is authorised by all the joint holder in this regard
(b) All the joint holders equally
(c) The joint holder, who is first named in the register of members
(d) All the joint holder in propotion of money invested by them
52. A money transferred to the Unpaid Dividend Account which remains unpaid for_________________
from the date of such transfer shall be transferred by the company, along with interest
accrued, if any, to the Investor Education and Protection Fund
(a) 3 years (b) 5 years (c) 7 years (d) 10 YEARS
53. The dividend for any financial year can be declared or paid out of______
(a) Profit for that financial year
(b) Profits for any previous financial year(s) and remaining undistributed
(c) both 1 & 2
(d) both 1 & 2 out of free reserve
54. "Statement (I): The Board may declare the interim dividend whether or not it is authorised by
the articles Statement (2): The amount of interim dividend is to be compulsorily deposited
in a scheduled bank in a separate bank financial year; 5 within 7 days of passing the Board
resolution declaring the interim dividend."
(a) Only statement 1 is correct (c) both The statmenets are correct
(b) only statement 2 is correct (d) none of the above
55. "Mr. Manan, a member of Moksh Ltd. had given directions to the company
regarding payment of dividend, but those directions could not be complied with
Consequently, dividend could not be paid to Mr. Manan. Consider the following
Statement: Statement (1): Moksh Ltd. has contravened the provisions of section 127,
and is therefore, liable for penalty under section 127 Statement (2): In case a company
contravenes the provisions of section 127, it shall be liable to pay simple interest @
12% per annum during the period for which the default continues."
(a) Only statement 1 is correct (c) both The statmenets are correct
(b) Only statement 2 is correct (d) none of the above
56. "Statement 1:The declaration of dividend at an annual general meeting is an item of ordinary
business Statement 2: A company may pay dividend in proportion to the amount paid up

on shares, if the company is authorised by the Board"

(a) Only statement 1 is correct (c) both 1 & 2 are correct
(b) only statement 2 is correct (d) none of the above
57. The dividend shall be paid within _______days from the date of_______of dividend.
(a) 30; declaration (c) 30, recommendation
(b) 7; declaration (d) 7, recommendation
58. Name the form in which a Holding & subsidiary company shall attach along with its financial
statement, a separate statement containing the salient features of ifs subsidiaries.
(a) FormAOC-2. (c) FormAOC-4
(b) FormAOC-3. (d) FormAOC-1.
59. Persons responsible to maintain books is/ or
(a) Managing director
(b) whole time director in charge of finance
(c) chief financial officer
(d) all the above
60. From the following information in respect of company ABC Ltd. Compute the amount the
company is required to spend on account of
Financial Year Net Profit(In Cr.)
2016-17 30
2017-18 22
2018-19 27
(a) 26Crore (b) 52 Lacs (c) 55 Lacs (d) 26 Lacs
61. SNDT Ltd decided to shift its registered office from jurisdiction of one Registrar to the
jurisdiction of another Registrar. SNDT Ltd complied with the provisions of Companies Act,
2013 and did all relevant filing within due period of time. Confirmation on such shifting
was received by Regional Director on 26th June, 2018. By when SNDT Ltd has to file that
confirmation with the Registrar?
(a) 11th July, 2018 (c) 11th August, 2018
(b) 25th July, 2018 (d) 25th August, 2018
62. The registered office of A Ltd is situated at Chennai. It has a branch office at Madurai. It is
desired by the Board of directors of A Ltd. to keep the books of Madurai at Trichy. As per the
Companies Act ,2013,A Ltd. is authorised to keep the books of account of Madurai Office at -
(a) Chennai only
(b) Madurai only
(c) Chennai or / and Madurai
(d) Chennai or / and Madurai or / and Trichy
63. A member of a company ( not being a director) shall have a right to inspect books of account
if he is so authorised by -

(a) The law

(b) The Board
(c) The General Meeting
(d) The Law or the Board or the general meeting
64. Mr. Polite is a director of courteous Ltd. Courteous Ltd. has a branch situated at USA. Mr.
Polite requires some detailed information relating to assets and Liabilities of USA Branch.
He authorises Mr. Straight Forward to obtain such detailed financial information from
Courteous Ltd. Mr .Straight Forward requests Courteous Ltd. to furnish him the required
financial information . Courteous Ltd. is bound to furnish to Mr. Straightforward the required
financial information-
(a) No
(b) Yes, if a power of attorney is executed by Mr. Polite in favour of Mr. Straight forward
(c) Yes, if the articles of Courteous Ltd. so provide
(d) Yes, if Mr.Straight forward submits an undertaking that he shall not use such financial
information for passing on to any rival of the company
65. Where the books of account and other relevant papers are kept in electronic mode , the
company shall intimate to the Registrar on _______ basis, the name and internet protocol of
the service provider, the location of the service provider (wherever applicable) , where the
books of account and other books and papers are maintained on cloud and such address as
provided by the service provider.
(a) Monthly Basis (c) Annual Basis
(b) Quarterly Basis (d) None of these.
66. Every Company shall preserve in good order the books of account together with the relevant
vouchers. The time period of preservation shall not be less than______financial years
immediately preceding the relevant financial year.
(a) 5 (b) 7 (c) 8 (d) 10
67. ________are responsible for compliance with the provisions relating to maintenance of proper
books of account.
(a) Managing Director
(b) Whole -time director in charge of finance
(c) Chief Financial Officer
(d) All of these
68. The Books of account etc. Maintained within India shall be open for inspection by_______
(a) Any Director
(b) Managing Director and whole time director
(c) Any director other than Managing director or Whole time Director
(d) None of these

69. If any default is made in complying with the provisions relating to maintenance of books of
account, all such person who are responsible for ensuring such compliance shall be liable
to imprisonment upto________or fine which shall not be less than ` 50,000 but which may
extend upto ` 5,00,000 or both .
(a) 1 year, ` 50000, ` 5 Lakh (c) 6 months,` 25,000, ` 5 Lakh
(b) 1 year ` 25,000, ` 2.5 Lakh (d) 6 months, ` 50,000 , ` 5 Lakh
70. If the financial statement do not comply with the accounting standards ,the company shall
disclose in its financial statement,________
(a) The deviation from the accounting standards
(b) The reason for such deviation
(c) The financial effects, if any , arising out of such deviation
(d) All of these
71. The Financial statements shall be in the form or forms as may be provided for different class
or classes of companies in Schedule-
(a) I (b) II (c) III (d) IV
72. At every_______, the Board shall lay the financial statements of the company and consolidated
financial statement of the company and of all subsidiaries and associate companies ,if any .
(a) Annual general Meeting (c) General Meeting
(b) Extraordinary General Meeting (d) None of these
73. Examine the validity of statements
(1): Where a company has one or more subsidiaries ,it shall prepare a consolidated financial
statement of the company and of all the subsidiaries.
(2): Where a company has one or more subsidiaries as well as one or more associate
companies ,it shall prepare a consolidated financial statement of the company and of
all the subsidiaries and associate companies.
(a) Only statement (1) is correct
(b) Only statement (2) is correct
(c) Both the statements are correct
(d) None of the Financial Statements is correct
74. Where a company has one or more subsidiaries ,it shall prepare
(a) Financial Statement of the company
(b) A Consolidated Financial Statement of the company and of all its subsidiaries
75. Where a company has one or more subsidiaries or associate companies ,the company shall
attach along with its financial statement , a separate statement containing the salient
features of the financial statement of its subsidiaries and associate companies in Form No
._________

(a) AOC-I (b) OC-2 (c) AOC-3 (d) AOC-4

76. If any default is made in complying with the provisions relating to financial statements ,all
such person who are responsible for ensuring such compliance shall be liable to imprisonement
upto_________or fine which shall not be less than ` 50,000 but which may extend upto `
5,00,000 or both
(a) 1 year, ` 50,000, ` 5 lakh (c) 6 months , ` 25000, ` 5lakh
(b) 1 year, ` 25,000, ` 2.5 lakh (d) 6 months , ` 50,000, ` 5 lakh
77. An Application for reopening of accounts under section 130 may be made by_
(a) CG or SEBI or the Income tax authorities
(b) Any statutory regulatory body or authority
(c) Any person concerned
(d) Any of these
78. ___________is empowered to make an order for reopening of accounts under section 130.
(a) The Court
(b) The Tribunal
(c) The court or / and the Tribunal
(d) The Central Government
79. Under section 130, no order shall be made in respect of re-opening of books of account
relating to a period earlier than_______financial years immediately preceding the current
financial year.
(a) 3 (b) 5 (c) 7 (d) 8
80. Under section 131, the Board of directors may decide to prepare revised Board's report in
respect of any of the preceding________financial years.
(a) 3 (b) 5 (c) 7 (d) 8
81. Under Section 131, the board of directors may decide to prepare revised financial statement
or a revised Board's report after obtaining approval of
(a) The court (c) The Court or / and the Tribunal
(b) The Tribunal (d) The Central Government
82. Under section 131, the revised financial statements or the Revised Board's report shall not
be prepared more than_______
(a) Once in a Financial year (c) Once in every 3 financial years
(b) Twice in a Financial year (d) Once in every 5 financial years
83. Before granting approval for preparing the revised financial statement or a revised Board's
report under section 131,the Tribunal shall give notice to _______and shall take into
consideration their representations ,if any,
(a) CG and Income tax authorities
(b) SEBI and any statutory regulatory body or authority

(d) All of these

84. Detailed reasons for revision of financial statement or Board's report shall be disclosed in
(a) The Board's report (c) All of these
(b) The Audit report (d) None of these
85. NFRA Stands for-
(a) National Financial Reporting Authority
(b) National Fund Recovery Audit
(c) Need for Recovery Audit
(d) Nominee for Resource Authority
86. The NFRA shall make recommendations to________on the formulation and laying down of
accounting and auditing policies and standards for adoption by companies or their auditors
,as the case may be.
(a) The Institute of Chartered Accountants of India
(b) The Central Government
(d) The Accounting Standards Board
87. The NFRA shall monitor and enforce the compliance with_______
(a) The accounting standards and auditing standards
(b) The auditing standards
(d) Secretarial standards
88. The NFRA shall oversee the quality of service of________associated with ensuring compliance
with accounting and auditing standards , and suggest measures required for improvement
in quality of service
(a) The professions
(b) The Ministries of the Central Government
(c) The office of Comptroller and Auditor General of India
(d) All of these
89. The NFRA shall consist of a chair person and such other part time and full time members
,not exceeding________, as may be prescribed
(a) 10 (b) 12 (c) 15 (d) 20
90. The Chairperson and members, who are in full-time employment with NFRA shall not be
associated with any audit firm (including related consultancy firms ) during the course of
their appointment and_________after ceasing to hold such appointment.
91. Where NFRA has initiated an investigation,________shall not initiate or continue any
proceedings in such matters of misconduct.
(a) The central government (b) The SEBI

(c) The Tribunal (d) Any institute or body

92. Any person aggrieved by any order of NFRA may prefer an appeal before________
(a) The Tribunal (c) The Central government
(b) The Apellate Tribunal (d) The High court
93. _______shall recommend the Standards of Accounting ,which shall be examined by
_____.Then,______shall examine the recommendations made by, and consult_____,_.Then CG
shall prescribe the Accounting standards
(a) ICAI, CG, ICAI, NFRA (c) NFRA, CG , NFRA, ICAI
(b) ICAI, NFRA, CG, NFRA (d) NFRA, ICAI, CG , ICAI
94. The financial statement,including consolidated financial statement, if any, sha'1 be
submitted to the______after they have been______by the Board and_______on behalf of the
Board .
(a) Managing Director, Approved , signed (c) Auditor, Signed, Approved
(b) Auditor, Approved, Signed (d) Registrar, Signed, Approved
95. The auditors' report shall be attached to_______
(a) Annual report (c) Cost Audit Report
(b) Board Report (d) Financial statement
96. "As per Section 123, company may declare dividend out of certain profit as prescribed, now
decide which out of following is incorrect"
(a) out of the profits of the company for that year arrived at after providing for depreciation
(b) "out of the profits of the company for any previous financial year arrived at after providing for
depreciation"
(c) "out of money provided by the Central Government or a State Government for the payment of
dividend by the company in pursuance of a guarantee given by that Government"
(d) "out of the profits of the company for that year arrived at after providing for
depreciation but before taxation"
97 While computing profit for purpose of dividend, following shall be excluded
(a) amount representing unrealised gains
(b) revaluation of assets
(c) "change in carrying amount of an asset or of a liability on measurement of the asset
or the liability at fair value"
(d) All of above
98 Which out of the following statement is correct
(a) "A company may, before the declaration of any dividend in any financial year, transfer such
percentage of its profits as it may consider appropriate to the reserves of the company"
(b) "A company shall, before the declaration of any dividend in any financial year, transfer such
percentage of its profits as it may consider appropriate to the reserves of the company"
(c) "Any transfer to reserve is not mandatory and the percentage to be transferred to

reserves is to be decided at the discretion of the company"

(d) Any transfer to reserve is mandatory and it shall be as per Rule 3
99 "Before declaring dividend, depreciation shall be charges as per rate prescribed in Schedule II. Decide,
which out of following is incorrect."
(a) "Rate as per Schedule-II shall be minimum and therefore there is no bar in providing a
higher rate of depreciation"
(b) Rate as per Schedule-II shall be maximum
(c) Depreciation shall be as per Schedule-II only
(d) No restriction, company may exercise its own discretion
100 "In terms of section 123(4), the amount of the dividend, including interim dividend, shall be
deposited in a scheduled bank in a separate account"
(a) within 5 days from the date of declaration of such dividend
(b) within 7 days from the date of declaration of such dividend
(c) within 30 days from the date of declaration of such dividend
(d) within 1 month from the date of declaration of such dividend
101 Provisions of Section 123(4), are not applicable to
(a) "Government Company in which the entire paid up share capital is held by the Central
Government, or by any Stale Government or Governments"
(b) Government Company
(c) Private limited company
(d) All above
102 No company shall declare dividend, which has committed a default in
(a) Repayment of Debentures
(b) Repayment of Term Loan
(c) Repayment of Deposit
(d) Payment of dividend to Preference share holders
103 "As per rule-3, rate of dividend declared shall not exceed the average rates at which dividend
was declared by it in the 3 years immediately preceding that year, however, this rule will
not apply if "
(a) Rate of Dividend proposed is atleast 25%
(b) company has not declared any dividend in each of the three preceding financial year
(c) company has not declared any dividend in each of the immediately preceding financial
year
(d) None of above
104 "As per Section 123(3), in case the company has incurred loss during the current financial
year up to the end of the quarter immediately preceding the date of declaration of interim
dividend"
(a) "such interim dividend shall not be declared at a rate lower than the average dividends

declared by the company during the immediately preceding three financial years"
(b) "such interim dividend shall not be declared at a rate higher than the average dividends
declared by the company during the immediately preceding three financial years"
(c) "such interim dividend shall be declared at a rate equal to average dividends declared
by the company during the immediately preceding three financial years"
(d) None of above
105 "As per Section 124, where a dividend has been declared by a company but has not been paid or claimed
within thirty days from the date of the declaration to any shareholder entitled to the payment of the
dividend, the company shall"
(a) "within 7 days from the date of expiry of the said period of thirty days, transfer the
total amount of dividend which remains unpaid or unclaimed to a special account
to be opened by the company in that behalf in any scheduled bank to be called the
Unpaid Dividend Account"
(b) "within 5 days from the date of expiry of the said period of thirty days, transfer the
total amount of dividend which remains unpaid or unclaimed to a special account
to be opened by the company in that behalf in any scheduled bank to be called the
Unpaid Dividend Account"
(c) "transfer the total amount of dividend which remains unpaid or unclaimed to a
special account to be opened by the company in that behalf to Investor Education
and Protection Fund"
(d) Company may transfer this amount to its general reserve
106 "Within how many days, a company making any transfer to the Unpaid Dividend Account, prepare a
statement containing the names, their last known addresses and the unpaid dividend to be
paid to each person and place it on the web-site of the company"
(a) Within 90 days of declaration of dividend
(b) Within 60 days of declaration of dividend
(c) Within 90 days of making any transfer to the Unpaid Dividend Account
(d) Within 7 days of declaration of dividend
107 "If any default is made in transferring the total amount to the Unpaid Dividend Account of
the company, it shall pay, interest on so much of the amount as has not been transferred to
the said account at the rate of "
(a) 12% from date of such default (b) 15% from date of such default
(c) 18% from date of such default (d) 24% from date of such default
108 "Any person claiming to be entitled to any money transferred to the Unpaid Dividend Account of the
company may apply to the"
(a) Central Government
(b) Investor Education and Protection Fund Authority
(c) Company (d) Tribunal

109 "Any money transferred to the Unpaid Dividend Account of a company which remains unpaid or
unclaimed for a period of seven years shall be transferred by the company to"
(a) Investor Education and Protection Fund
(b) Investor Protection and Education Fund
(c) Investor Protection Fund
(d) Fund established by Company for this purpose
110 "As per Section 124, if any dividend is paid or claimed for any year during the period of seven
consecutive years"
(a) Neither Dividend nor Shares shall be transferred to Investor Education and Protection
Fund
(b) Dividend shall not be transferred to Investor Education and Protection Fund
(c) Share shall not be transferred to Investor Education and Protection Fund
(d) No restriction on any transfer
111 "Any person whose shares has been transferred to the Fund, may claim the shares to the Authority by
submitting an online application in"
(a) FormIEPF-6 (c) FormDIV-5
(b) Form EEPF-5 (d) Form DIV-6
112 "The claimant shall after making an application for refund of dividend unpaid or shares
which have been transferred to fund shall send the same duly signed by him to the"
(a) Authority
(b) Central Government for its record
(c) Company for verification
(d) ROC for its record
113 "The company shall send a verification report to the Authority in the format specified by the
Authority along with all the documents submitted by the claimant."
(a) within 15 days from the date of receipt of claim
(b) within 45 days from the date of receipt of claim
(c) within 30 days from the date of receipt of claim
(d) within 60 days from the date of receipt of claim
114 An application received for refund of any claim shall be disposed off by the Authority within
(a) 30 days from the date of receipt of Application
(b) 60 days from the date of receipt of Application
(c) 60 days from the date of receipt of the verification report from the company
(d) 60 days from the date of receipt of the verification report from the company
115 Which out of the following need not be attached to a report of Board of Directors of company
(a) the amounts, if any, which it proposes to carry to its capital reserves
(b) the amount, if any, which it recommends should be paid by way of dividend
(c) "material changes and commitments, if any, affecting the financial position of the

company which have occurred between the end of the financial year of the company
to which the financial statements relate and the date of the report"
(d) the conservation of energy, technology absorption, foreign exchange earnings and
outgo
116 As per Section 125, certain amount shall be credited to the fund, which shall not include
(a) the amount received by way of grants from companies
(b) "donations given to the Fund by the Central Government, State Governments,
companies or any other institution for the purposes of the Fund"
(c) "the amount in the Unpaid Dividend Account of companies transferred to the Fund
under subsection (5) of section 124"
(d) "the amount in the general revenue account of the Central Government which had been
transferred to that account under sub-section (5) of section 205A of the Companies
Act, 1956"
117 "As per Section 125, Fund shall be utilised for certain purpose, which shall not include the following
purpose"
(a) "the refund in respect of unclaimed dividends, matured deposits, matured debentures,
the application money due for refund and interest thereon"
(b) promotion of investors' education, awareness and protection
(c) distribution of any disgorged amount towards betterment of economy
(d) "reimbursement of legal expenses incurred in pursuing class action suits under sections
37 and 245 by members, debenture-holders or depositors as may be sanctioned by the
Tribunal"
118 "As per Section 127, where a dividend has been declared by a company but has not been paid to any
shareholder entitled to the payment of the dividend, every director of the company shall, if he is
knowingly a party to the default, be punishable with"
(a) imprisonment which may extend to two years.
(b) fine which shall not be less than 1,000 rupees for every day during which such default
continues
(c) "company shall also be liable to pay simple interest at the rate of 18% p.a. during the
period for which such default continues"
(d) All of above
(e) Any of above
119 "There are certain scenario as specified as exception to Section 127, where no penalty shall
be levied, any such scenario shall not include the following"
(a) where the dividend could not be paid by reason of the operation of any law
(b) "where a shareholder has given directions to the company regarding the payment of
the dividend and those directions cannot be complied with and the same has been
communicated to him"

(c) where there is a dispute regarding the right to receive the dividend
(d) none of above
120 "Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures
which matured four years back. However, 1000 such debentures of ` 100 each are still
remaining unclaimed and unpaid even after the maturity. State the period after which the
company needs to transfer them to Investor Education and Protection Fund (IEPF) if they
remain unclaimed and unpaid."
(a) After the expiry of five years from the maturity date
(b) After the expiry of six years from the maturity date.
(c) After the expiry of seven years from the maturity date
(d) After the expiry of eight years from the maturity date.
ANSWERS
1 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(c) (b) (a) (a) (c) (d) (b) (d) (c) (d) (c) (b) (b) (d) (a)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(b) (a) (c) (b) (b) (d) (a) (a) (c) (d) (c) (a) (b) (d) (a)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(c) (b) (a) (c) (b) (b) (b) (b) (c) (c) (a) (d) (b) (c)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(b) (b) (b) (b) (c) (c) (c) (d) (a) (a) (a) (a) (d) (d) (b)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(d) (d) (d) (a) (c) (c) (d) (a) (a) (d) (c) (a) (c) (c) (a)
76. 77. 78. 79. 80 81. 82. 83. 84. 85. 86. 87. 88. 89. 90.
(a) (d) (c) (d) (a) (b) (a) (a) (a) (a) (b) (c) (a) (c) (b)
91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105.
(d) (b) (a) (b) (d) (d) (d) (a) (a) (b) (a) (c) (c) (b) (a)
106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120.
(c) (a) (c) (a) (c) (b) (a) (a) (c) (a) (a) (c) (d) (d) (c)

CHAPTER-9 Accounts of Companies
CHAPTER-9
ACCOUNTS OF COMPANIES
1 The books of account etc. maintained within India shall be open for inspection by___
(a) a) Any director
(b) Managing director and whole time director
(c) Any director other than managing director or whole time director
(d) None of these
2 "In the case of______the directors' responsibility statement shall disclose as to whether
the directors, had laid down internal financial controls to be followed by the company and
whether such internal financial controls are adequate and were operating effectively."
(a) A listed company (b) Prescribed classes of companies
(c) Both and (d) Every company
3 The directors' responsibility in directors' responsibility statement shall disclose as to whether
the directors had taken properly and sufficient care for_______
(a) Maintenance of adequate accounting records
(b) Safeguarding the assets of the company
(c) Preventing and detecting fraud and other irregularities
(d) All of these
4 Mr. Polite is a director of Courteous Ltd. Courteous Ltd. has a branch situated at USA. Mr.
Polite requires some detailed information relating to assets and liabilities of USA Branch, He
authorises Mr Straightforward to obtain such acta financial information from Courteous Ltd.
Mr. Straightforward requests Courteous Ltd. to furnish him the conce financial information.
Courteous Ltd. is bound to furnish to Mr. Straightforward the required financial information
______
(a) No
(b) Yes, if a power of attorney is executed by Mr. Polite in favour of Mr. Straightforward
(c) Yes,if the articles of Courteous Ltd. So provide
(d) Yes, If mr.Straight forward submits an undertaking that he shall not use such financial
information for passing on to any rival of the company.
5 CSR projects or programs or activities_______ shall not amount to CSR Activities for the
purpose of Section 135.
(a) Undertaken outside India
(b) That benefit only the employees of the company and their families
(c) Both and
(d) None of these
6 The NFRA shall oversee the quality of service of_______associated with ensuring compliance
with accounting and auditing standards, and suggest measures required for improvement in
quality of service.
(a) The professions (b) The Ministries of the CG

(c) he office of Comptroller and auditor general of India
(d) All of these
7 The NFRA shall make recommendations to______on the formulation and laying down of
accounting and auditing policies and standards for adoption by companies or class of
companies or their auditors, as the case may be.
(a) The Institute of Chartered accountants of india
(b) The Central Government (c) Both and (b)
(d) The Accounting standards board
8 The NFRA shall monitor and enforce the compliance with___
(a) The accounting standards and auditing standards
(b) The auditing standards (c) Both and
(d) Secretarial Standards
9 Every company shall allow ___to inspect the financial statement and other documents at
its registered office during business hours.
(a) Every member (c) Both and
(b) Every debenture trustee (d) None of these
10 Where a company has one or more subsidiary or associate companies, the company shall
attach along with its financial statement, a separate statement containing the salient
features of the financial statement of its subsidiaries and associate companies in Form
No._______
(a) AOC-1 (b) AOC-2 (c) AOC-3 (d) AOC-4
11 The chairperson and members, who are in full-time employment with NFRA shall not be
associated with any audit firm(including related consultancy firms) during the course of
their appointment and___ after ceasing to hold such appointment.
12 " Statement (1): Where a company has one or more subsidiaries, it shall prepare a consolidated
financial statement of the company and of all the subsidiaries. Statement (2): Where a
company has one or more subsidiaries as well as one or more associate companies, it shall
prepare a consolidated financial statement of the company and of all the subsidiaries and
associate companies."
(c) Both the Statements are correct
(d) None of the statements are correct
13 If the financial statements do not comply with the accounting standards, the company shall
disclose in its financial statements,________
(a) The deviation from the accounting standards

(b) The reasons for such deviation

(c) The financial effects, if any, arising out of such deviation
(d) All of these
14 _______shall place its financial statements and other documents on its website.
(a) Every listed company
(b) Every public company
(c) Every company
(d) Every public company having net worth of more than Rs. 1 crore and turnover of more
than Rs. 10 crore
15 provisions relating to internal audit shall apply to------------
(a) A Unlisted public (c) " All companies companies"
(b) Private companies (d) "Prescribed classes of companies "
16 The internal auditor shall be__________________
(a) A chartered Accountant
(b) A cost accountant
(c) " Any other professional as may be deleted by the Board"
(d) Any of these
17 The provisions relating to corporate social responsibility apply to a company (including a
foreign company) if it has____ in the immediately preceding financial year.
(a) Net worth of Rs. 100 crore or more (c) Net profit of Rs. 50 crore or more
(b) Turnover of Rs. 500 crore or more (d) None of these
18 _____shall recommend the amount of expenditure to be incurred on the CSR activities to be
undertaken by the company.
(a) The Central Government (c) The CSR committee
(b) The Board (d) none of these
19 The Financial statements shall be in the form or forms as may be provided for different
class or classes of companies in__
(a) I (b) b) II (c) III (d) IV
\20 Where professional or other misconduct is proved, NFRA shall have the power to impose
penalty of not less than____ but which may extend to___ of the fees received, in case of
individuals, and not less than__ but which may extend to ___of the fees received, in case of
firms.
(a) Rs. 1 Lakh; 10 times; Rs. 5 lakh; 20 times
(b) Rs. 10 Lakh; 5 times; Rs. 50 lakh; 10 times
(c) Rs. 1 Lakh; 5 times; Rs. 5 lakh; 10 times
(d) Rs. 10 Lakh; 10 times; Rs. 50 lakh; 20 times
21 The Financial Statement, Consolidated Financial Statement, if any, auditor's Report and all
the documents which are required to be annexed or attached to the financial statement

shall be filed with the Registrar within__ of the date of AGM.

(a) 7 days (b) 14 days (c) 21 days (d) 30 DAYS
22 Under section 130, no order shall be made in respect of re-opening of books of account
relating to a period earlier than____ financial years immediately preceding the current
financial year.
(a) 3 (b) 5 (c) 7 (d) 8
23 "Before granting approval for preparing the revised financial statement or a
revised Board's report under section 131, the Tribunal shall give notice to____
and shall take into consideration their representations, if any"
(a) CG and Income-tax authorities
(b) SEBI and any statutory regulatory body or authority
(d) all of these
24 Where NFRA has initiated an investigation___shall not initiate or continue any proceeding
in such matters of misconduct.
(a) The Central Government (c) The Tribunal
(b) The SEBI (d) Any institute or body
25 ___is empowered to make an order for reopening of accounts under section 130
(a) The court (c) The court or/and the Tribunal
26 If any default is made in complying with the provisions relating to financial statements, all
such person who are responsible for ensuring such compliance shall be liable to imprisonment
upto____ or fine which shall not be less than Rs. 50,000 but which may extend upto Rs.
5,00,000 or both
(a) 1 year; Rs. 50,000; Rs.5 lakh (c) 6 months;26000; Rs. 5 lakh
(b) 1 year; Rs. 25,000; Rs. 2.5 lakh (d) 6 months; Rs. 50,000;Rs.5 lakh
27 Where the financial statements are not adopted at the AGM, but are adopted in the adjourned
AGM, the financial statements and other documents shall be filed with the Registrar within
30 days of____
(a) The date of the original AGM
(b) The date of the adjourned AGM
(c) The last date upto which the AGM should have been held(
(d) None of these
28 All or any of the books of account and other relevant papers may be kept at such place in
India, other than the registered office, as the Board of directors may decide. In such a case,
the company shall within_________of the decision of the Board, file with the Registrar, a
notice in writing

29 The auditors' report shall be attached to________

(a) Annual Report (c) Cost Audit Report
(b) Board's Report (d) Financial statement
30 The NFRA shall consist of a chairperson and such other part-time and full-time members,
not exceeding___ as may beprescribed.
(a) 10 (b) 12 (c) 15 (d) 20
31 A company may collaborate with other companies for undertaking projects or programs or
CSR activities in such a manner that the CSR Committees of respective companies are in a
position to report_______ on such projects or programs.
(a) Consolidatedly (c) Consolidatedly as well as separately
(b) Separately (d) Accurately
32 " The Financial Statement, consolidated Financial Statement, if any, auditor's Report and
all the documents which are required to be annexed or attached to the financial statement
shall be sent at least____ before the date of the Annual General Meeting."
33 if a company fails to file the financial statements before the expiry of the period specified
in section 137, the company shall be punishable with fine of ____for every day during which
the failure continues but which shall not be more than_____ and the managing director
and the Chief Financial Officer of the company shall be punishable with imprisonment for
a term which may extend to_______ or with fine which shall not be less than___ but which
may extend to_____or with both.
(a) Rs. 10,000; Rs. 10 lakh; 6 months; Rs. 1 lakh;Rs.10 lakh
(b) Rs. 1,000: Ra. 10 lakh;6 months; Rs.1 lakh;Rs.5 lakh
(c) Rs. 5,000; Rs. 5 lakh;3 months; Rs. 5 lakh;Rs. 25 lakh
(d) Rs. 10,000; Rs. 10 lakh; 3 months; Rs. 2 lakh;Rs.20 lakh"
34 The Board shall ensure that the company spends in every financial year, at least___ of the
average net profits of the company made during the 3 immediately preceding financial
years, in pursuance of its CSR Policy.
(a) 1% (b) 2% (c) 3% (d) 5%
35 One Person Company shall file the financial statements and other documents, within____
(a) 30 day of the date of AGM
(b) 60 days of the date of AGM
(c) 180 days of close of the financial year
(d) 210 days of close of FINANCIAL YEAR
36 Contribution of any amount, directly or indirectly to____shall not amount to CSR Activities
for the purpose of Section 135.
(a) Any political party (c) Both and
(b) Any charitable trust (d) "Prime Minister National Relief Fund"

37 "The provisions relating to internal audit shall apply to every unlisted public company having
paid SHARE CAPIATAL of _______or more during the preceding financial year. "
(a) Rs. 25 crore (c) Ra 100 crore
(b) Rs. 50 crore (d) Rs. 200 crore
38 Under section 131, the revised financial statements or the Revised Board's Report shall not
be prepared more than______
(a) Once in a financial year (c) Once in every 3 financial years
(b) Twice in a financial year (d) Once in every 5 financial years
39 At every___ the Board shall lay the financial statements of the company and consolidated
financial statement of the company and of all the subsidiaries and associate companies, if
any.
(a) Annual general meeting (c) General meeting
(b) Extraordinary general meeting (d) None of these
40 Under section 131, the Board of directors may decide to prepare revised financial statement
or a revised Board's report in respect of any of the preceding___ financial years.
(a) 3 (b) 5 (c) 7 (d) 8
41 Any person aggrieved by any order of NFRA may prefer an appeal before___
(a) The Tribunal (c) The Central Government
(b) The Appellate Tribunal (d) The High Court
42 ___having a subsidiary or subsidiaries shall place separate audited accounts in respect of
each of subsidiary on its website.
(a) Every listed company
(b) Every public company
(c) Every company
(d) Every public company having net worth of more than Rs. 1 crore and turnover of more
than Rs. 10 crore
43 The provisions relating to internal mudit shall apply to every unlisted public company having
turnover of _________during the preceding financial year.
(a) Rs. 25 crore (c) Rs. 100 crore
44 ___are responsible for compliance with the provisions relating to maintenance of proper
books of account.
(a) Managing director
(b) Whole-time director in charge of finance)
(c) Chief Financial officer (d) All of these
45 In the case of ____the Board's Report shall contain the prescribed information and details
with respect to conservation of energy, technology absorption, foreign exchange earnings
and outgo

(a) A listed company (c) Both and

(b) Prescribed classes of companies (d) Every company
46 The provisions relating to internal audit shall apply to every unlisted public company
having outstanding loans or borrowings from banks or public financial institutions
exceeding_________ or more at any point of time during the preceding financial year.
47 The financial statement, including consolidated financial statement, if any, shall be
submitted to the___ after they have been___by the Board and ___on behalf of the Board.
(a) Managing Director;approved; signed (c) Auditor; signed;approved
(b) Auditor; approved;signed (d) Registrar; signed;approved
48 "Companies may build CSR capacities of their own personnel as well as those of their
Implementing agencies through Institutions with established track records of at least ___
financial year but such expenditure including expenditure on administrative overheads, shall
not exceed________ of total CSR expenditure of the company in one financial year."
(a) 5; 3% (b) 3; 3% (c) 5; 5% (d) 3; 5%
49 Every company shall preserve in good order the books of accounts together with the
relevant vouchers. The time period preservation shall be not less than_____ financial years
immediately preceding the relevant financial year.
(a) 5 (b) 7 (c) 8 (d) 10
50 The provisions relating to corporate social responsibility apply to a company (including a
foreign company) if it has net worth of ______or more or turnover of crore or more or net
profit of_______ or more, in the immediately preceding financial year.
(a) Rs. 500 crore; Rs.100; Rs. 5 crore (c) Rs. 50 crore; Rs. 100; Rs. 5 crore
(b) Rs. 500 crore; Rs.1,000; Rs. 5 crore (d) Rs. 100 crore; Rs. 500; Rs. 50 crore
51 Adoption of financial statement and other documents is an item of _______,and requires______.
(a) Ordinary business; an ordinary resolution
(b) Special business;special resolution
(c) Ordinary business;special resolution
(d) pecial business; ordinary resolution
52 _______shall recommend the Standards of Accounting, which shall be examined by______ .
Then, ____examine the recommendations made by, and consult, ____Then, CG shall prescribe
the Accounting Standards.
(a) ICAI; CG; ICAI; NFRA (c) NFRA; CG; NFRA; ICAI
(b) ICAI; NFRA; CG; NFRA (d) NFRA; ICAI; CG; ICAI
53 " Statement (1): The internal auditor may or may not be an employee of the company
Statement (2): A chartered accountant or cost accountant may be appointed as internal
auditor whether or not he is engaged in practice"

(a) Only Statement (1) is correct (c) Both the Statements are correct
(b) Only Statement (2) is correct (d) None of the statements are correct
54 The financial statements shall be filed together with Form No._____ and the consolidated
financial statement, if any, shall be filed together with Form No.______
(a) AOC-3; EM-3 CFS (c) AOC-5; AOC-5CFS
(b) AOC-4; AOC-4CFS (d) AOC-6; AOC-6CFS
55 "The registered office of A Ltd situated at Mumbai. It has branch office at Kolkata. It is
desired by the Board of director of A Ltd. to keep the books of Kolkata office at Delhi, As per
the Companies Act, 2013, A Ltd. is authorised to keep the books of account of Kolkata office
at________"
(a) Mumbai Only (c) Mumbai or/and kolkata
(b) Kokata Only (d) Mumbai/delhi/Kolkata
56 Where professional or other misconduct is proved, NFRA shall have the power to debar the
member or the firm from engaging himself or itself from practice as member of ICAI for a
minimum period of__ or for such higher period not exceeding ___as may be decided by NFRA.
(a) 3 months; 5 years (c) 3 years; 10 years
(b) 6 months; 5 years (d) 3 months; 10 years
57 Under section 131, the Board of directors may decide to prepare revised financial statement
or a revised Board's report after obtaining approval of________
(a) The court (c) The court or / and the Tribuna
58 "Where the books of account and other relevant papers are kept in electronic mode, the
company shall intimate Registrar on ________basis, the name and internet protocol of the
service provider, the location of the service provider (wherever applicable), where the books
of account and other books and papers are maintained on cloud and which address as
provided by the service provider."
(a) Monthly basis (c) Annual basis
(b) Quarterly basis (d) None of these
59 If any default is made in complying with the provisions relating to maintenance of books of
account, all such person who are responsible for ensuring such compliance shall be liable to
imprisonment upto___ or fine which shall not be less than Rs. 50,000 but which may extend
upto Rs. 5,00,000 or both.
(a) 1 year; Rs. 50,000; Rs.5 lakh (c) 6 months; Rs.25000;rs.5 lakh
(b) 1 year; Rs. 25,000; Rs. 2.5 lakh (d) 6 months; Rs. 50,000;rs.5 lakh
60 "If any default is made in complying with the provisions relating to circulation of financial
statement to the members and others, the company shall be liable to a penalty of____,
and every officer of the company who is_______in default shall be liable to a penalty of__."
(a) Rs. 25,000; Rs. 5,000 (b) Rs. 2,50,000; Rs. 50,000

(c) Rs. 5 lakh; 1 lakh (d) 50,000; Rs. 10,000

61 An application for reopening of accounts under section 130 may be made by_______
(a) CG or SEBI or the Income-tax authorities
(b) "Any statutory regulatory body or authority "
(d) Any of these
62 Board's Report shall contain explanations or comments by the Board on every qualification,
reservation or adverse remark or disclaimer made in the______
(a) Audit report
(b) Secretarial audit report
(c) Both and
(d) Report of Internal auditor
63 Detailed reasons for revision of financial statements or Board's report shall be disclosed
in____
(a) The Board's report (c) All of these
(b) The Audit report (d) none of these
64 "Where AGM is not held, the financial statements and other documents and a statement of
facts and reasons for not holding the AGM shall be filed with the Registrar within 30 days of
"
(a) The date of the original AGM
(b) The date of the adjourned AGM
(c) The last date upto which the AGM should have been held(
(d) None of these
65 Where a company has one or more subsidiaries, it shall prepare__________
(a) Financial statement of the company
(b) "A consolidated financial statement of the company and of all its subsidiaries "
(d) Either (1) or (2)
66 As per Regulation 89 of Table F. a member of a company (not being a director) shall have a
right to inspect books of account if he is so authorised by___
(a) The law
(b) The Board
(c) The general meeting
(d) The law or the Board or the general meeting
67 "Statement (1): Any activity undertaken in pursuance of normal course of business
of a company shall not amount to CSR Activities for the purpose of Section 135.
Statement (2): The Board shall ensure that activities included by a company in its CSR Policy
fall within the purview of the activities included in Schedule VI."

(a) Only Statement (1) is correct (c) Both the Statements are correct
(b) Only Statement (2) is correct (d) None of the statements are correct
68 The provisions relating to Internal Audit shall apply to every unlisted public company having
outstanding deposits of________or more at any point of time during the preceding financial
year.
69 Every company shall prepare and keep at its registered office the following for every financial
year
(a) Every company shall prepare and keep at its registered office the following for every
financial year
(b) other relevant books and papers
(c) financial statement
(d) All of above
70 Which out of following is incorrect in relation to books to be maintained by company u/s
128
(a) Books shall present a true and fair view of the state of the affairs of the company
(b) Books shall be maintained either on accrual basis or on cash basis
(c) Books shall be maintained on Double entry system
(d) "The company may also keep all or any of the books of accounts at any other place in India as the
Board of directors may decide"
71 The company may also keep all or any of the books of accounts at any other place in India,
provided
(a) "Any such decision has been approved in general meeting and a notice in writing giving the full
address of that place within 7 days shall be submitted"
(b) "company should file with the Registrar of Companies, a notice in writing giving
the full address of that place within 7 days of the decision by Managing Director of
company"
(c) "company should file with the Registrar of Companies, a notice in writing giving the
full address of that place within 7 days of the Boards' decision"
(d) None of above
72 "The company may also keep all or any of the books of accounts at any other place in India as the Board
of directors may decide, provided any such decision shall be communicated to ROC in"
(a) FormAOC-1 (c) FormAOC-4
(b) Form AOC-2 (d) FormAOC-4
73 "Inspection in respect of any subsidiary of the company shall be done only by the person
authorised in this behalf by a"
(a) Resolution of the Members

(b) Resolution of the Board of Directors

(c) Regional Director
(d) Resolution of the Board of Directors, subject to approval of board of directors
74 "As per Rule 4, the summarized returns of the books of account of the company kept and maintained
outside India shall be sent to the registered office"
(a) At reasonable interval
(b) At quarterly intervals
(c) No such period prescribed
(d) At six monthly basis
75 "Where any other financial information maintained outside the country is required by a director, the
director shall"
(a) Submit a request to the company within prescribed period
(b) Submit a request to the company with no such period prescribed
(c) Submit a request to the company with no such period prescribed
(d) Submit a request to the company within 15 days of conclusion of AGM
76 The company shall produce such financial information to the director within
(a) 7 days of the date of receipt of the written request
(b) 10 days of the date of receipt of the written request
(c) 15 days of the date of receipt of the written request
(d) 30 days of the date of receipt of the written request
77 Which out of the following is incorrect as per the Rule 4
(a) "Where any other financial information maintained outside the country is required by
a director, the director shall furnish a request to the company"
(b) " The summarized returns of the books of account of the company kept and maintained
outside India shall be sent to the registered office at quarterly intervals"
(c) "The books of account and other books and papers maintained by the company within
India shall be open for inspection at the registered office of the company or at such
other place in India by any director during business hours."
(d) " The financial information shall be sought for by the director himself or by or through
his power of attorney holder or agent or representative"
78 "The books of account of every company together with the vouchers relevant to any entry
in such books of accounts shall be kept in order by the company for a minimum period of "
(a) 8 financial years immediately preceding a financial year
(b) 8 financial years
(c) 6 financial years immediately preceding a financial year
(d) 5 financial years
79 As per Section 129, which out of the following statement is incorrect
(a) Financial Statement shall give a true and fair view of the state of affairs of the

company
(b) Financial Statement shall comply with the accounting standards notified under
section 133
(c) " Financial Statement shall be in the form or forms as may be provided for different
class or classes of companies in Schedule III"
(d) Financial Statement shall be based on double entry system of accounting
80 " As per Section 129, provisions relating to nature and content of financial statement shall
not apply to certain companies, which shall not include the following company"
(a) Insurance Companies
(b) Banking companies
(c) Company engaged in the generation or supply of electricity
(d) Company engaged in Infrastructure business
81 "Preparation of consolidated financial statements by a company shall not be required, if it meets the
following conditions:-"
(a) " it is a wholly-owned subsidiary, or is a partially-owned subsidiary of another company
and all its other members, including those not otherwise entitled to vote, having been
intimated in writing and for which the proof of delivery of such intimation is available
with the company, do not object to the company not presenting consolidated financial
statements"
(b) "it is a company whose securities are not listed or are not in the process of listing on any stock
exchange, whether in India or outside India"
(c) "its ultimate or any intermediate holding company files consolidated financial
statements with the Registrar which are in compliance with the applicable Accounting
Standards"
(d) All of above
82 "If the financial statements of a company do not comply with the accounting standards, the
company shall disclose in its financial statements the following namely"
(a) the deviation from the accounting standards
(b) the deviation from the accounting standards
(c) the financial effects, if any, arising out of such deviation
(d) All of above
83 Tribunal may direct opening of books of accounts provided an application in this regard is
made by
(a) Central Government (c) Securities and Exchange Board
(b) Income-tax authorities (d) Any of above
84 Tribunal may order opening of books as per Section 130 only if
(a) Relevant accounts were prepared in a fraudulent manner
(b) "Affairs of the company were mismanaged during the relevant period, casting a doubt

on the reliability of financial statements"

(c) Either a or b
(d) Both a and b
85 "No order shall be made under section 130(1) in respect of re-opening of books of account relating to a
period"
(a) earlier than 8 financial years immediately preceding the current financial year
(b) earlier than 6 financial years immediately preceding the current financial year
(c) earlier than 4 financial years immediately preceding the current financial year
(d) earlier than 3 financial years immediately preceding the current financial year
86 Which out of the following shall not form part of Directors Responsibility Statement
(a) "in the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures"
(b) " the directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the company at the end of the financial year"
(c) "the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities"
(d) the directors had prepared the annual accounts on a double entry system of accounting
(a) a statement on declaration given by independent directors under sub-section (6) of
section 149
(b) "in case of a company covered under sub-section (1) of section 178, company's policy
on directors' appointment and remuneration including criteria for determining
qualifications, positive attributes, independence of a director and other matters
provided under sub-section (3) of section 178"
(c) particulars of loans made to Directors under section 185
(d) the amounts, if any, which it proposes to carry to any reserves
(a) the amounts, if any, which it proposes to carry to its capital reserves
(b) the amount, if any, which it recommends should be paid by way of dividend
(c) "material changes and commitments, if any, affecting the financial position of the
company which have occurred between the end of the financial year of the company
to which the financial statements relate and the date of the report"
(d) the conservation of energy, technology absorption, foreign exchange earnings and
outgo
89 " In case of a One Person Company, the report of the Board of Directors to be
attached to the financial statement under section 134 shall, mean"

(a) "A report containing explanations or comments by the Board on every qualification,
reservation or adverse remark or disclaimer made by the auditor in his report"
(b) A report by Board on its performance
(c) A report by board on transaction with sole member of company
(d) All of above
90 In absence of Chairperson, the Board's report and any annexure thereto shall be signed by
(a) At least two directors, one of whom shall be a managing director
(b) "At least two directors, one of whom shall be a managing director, or by the director
where there is one director"
(c) Any two directors
(d) By Managing Director of company
91 " As per Section 135, Every company having net worth of rupees 500 crore or more, or
turnover of rupees 1000 crore or more or a net profit of rupees 5 crore or more during the
immediately preceding financial year shall"
(a) Contribute atleast 2% of their Net profit for CSR
(b) Contribute atleast 2% of their average profit for past 3 years for CSR
(c) Contribute up to 2% of their average profit for past 3 years for CSR
(d) Constitute a Corporate Social Responsibility Committee
92 CSR committee shall consist of atleast
(a) 3 or more directors, out of which majority shall be an independent director
(b) 3 or more directors, out of which at least one director shall be an independent director
(c) 5or more directors, out of which at least 2 directors shall be an independent director
(d) 5or more directors, out of which at least one director shall be an independent director
93 "Where a company is not required to appoint an independent director under sub-section (4)
of section 149, then"
(a) it shall have in its Corporate Social Responsibility Committee two or more directors.
(b) it shall have in its Corporate Social Responsibility Committee 3 or more directors.
(c) no need to have CSR committee
(d) it shall have in its Corporate Social Responsibility Committee any number of directors
94 Out of the following who shall not be considered as member personally present
(a) A member of the company
(b) Authorized representative of a body corporate. By Company Liquidator within 30 days
(c) Representative of President/Governor of the state
(d) Person appearing on behalf of representative of body corporate
95 Which out of the following is not a task to be performed by CSR committee
(a) "Formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be
undertaken by the company as specified in Schedule VII"
(b) Recommend the amount of expenditure to be incurred on the activities referred to in

Schedule VII
(c) Recommend the amount of expenditure to be incurred on the activities referred to in
Schedule VII
(d) "Ensure that the activities as are included in Corporate Social Responsibility Policy of
the company are undertaken by the company."
96 If the company fails to spend such amount
(a) "Board shall, in its report made under sub-section (3) of section 134, specify the reasons for not
spending the amount"
(b) Company shall be liable to pay penalty as prescribed u/s 135
(c) "Member become entitled to submit an application to tribunal for directing the
company to ensure the compliance with Section 135"
(d) None of above
97 "As per Section 136, incase of EGM of A Limited i.e. company having share capital, if the copies of the
documents are sent less than twenty-one days before the date of the meeting, they shall be
deemed to have been duly sent if it is so agreed by members—"
(a) "Holding majority in number entitled to vote and who represent not less than ninety-
five per cent of paid-up share capital of the company as gives a right to vote at the
meeting"
(b) " Holding not less than ninety-five per cent of paid-up share capital of the company
as gives a right to vote at the meeting"
(c) Holding majority in number entitled to vote and who represent not less than ninety
per cent of paidup share capital of the company as gives a right to vote at the meeting
(d) Holding majority in number
98 Which out of the following is true about appointment of proxy by Section 8 company
(a) A member of a company registered under section 8 shall not be entitled to appoint
any other person
(b) "A member of a company registered under section 8 shall not be entitled to appoint
any other person as his proxy unless such other person is also a member of such
company"
(c) "A member of a company registered under section 8 shall not be entitled to appoint
any other person as his proxy unless article provide so"
(d) None of above
99 "Provision of Section 136 shall be deemed to have been complied, if the copies of the
documents are made available for inspection at its registered office during working hours
for a period of 21 days before the date of the meeting in case of "
(a) Public Listed company (c) All Public limited companies
(b) All Listed company (d) All companies as prescribed u/s 135

100 "Incase of Listed company, a statement containing the salient features of Financial
statement and other documents as prescribed u/s 136, shall be send through form no to
every member of the company and to every trustee for the holders of any debentures issued
by the company"
(a) AOC-3 (b) AOC-1 (c) AOC-1 (d) AOC-4
101 Every listed company having a subsidiary or subsidiaries shall
(a) place separate audited accounts in respect of each of subsidiary on its website, if any
(b) place separate audited accounts in respect of each of subsidiary on its website
(c) place consolidated audited accounts only in respect of each of subsidiary on its
website, if any
(d) place separate audited accounts in respect of each of subsidiary in newspapers
102 Section 136(2), provides the right of to members or trustees of debentures
(a) Inspection of documents as specified u/s 136(1)
(b) Inspection of books of accounts
(c) Inspection of Secret documents which are not otherwise available for inspection
(d) None of above
103 "As per Section 137, copy of the financial statements, including consolidated financial
statement, if any, along with all the documents which are required to be or attached to
such financial statements under this Act shall be"
(a) " Filed with the Registrar within 30 days of the date of annual general meeting after
they have been adopted"
(b) Filed with the Registrar within 30 days of the date of general meeting after they have
been adopted
(c) "Filed with the Registrar within 30 days of the date of annual general meeting even if
they are not yet audited"
(d) None of above
104 "Where the financial statements are not adopted at annual general meeting or adjourned
annual general meeting, then"
(a) "such unadopted financial statements along with the required documents shall be
filed with the Registrar within 30 days of the date of annual general meeting"
(b) No need for submission to ROC unless the same has been adopted
(c) "such unadopted or unaudited financial statements along with the required documents
shall be filed with the Registrar within 30 days of the date of annual general meeting"
(d) " such unaudited financial statements along with the required documents shall be
filed with the Registrar within 30 days of the date of annual general meeting"
105 " A One Person Company shall file a copy of the financial statements duly adopted by its member,
along with all the documents which are required to be attached to such financial statements,"
(a) within 180 days from the closure of the financial year to ROC

(b) within 30 days from General Meeting

(c) within 6 months from the closure of the financial year to ROC
(d) within 180 days from the closure of the financial year to Tribunal
106 "As per Section 137, A company shall, along with its financial statements to be filed with the
Registrar, attach the accounts of "
(a) All its subsidiary or subsidiaries
(b) its subsidiary or subsidiaries including associate company
(c) " its subsidiary or subsidiaries which have been incorporated outside India and
established their place of business in India."
(d) "its subsidiary or subsidiaries which have been incorporated outside India and which have not
established their place of business in India."
107 Where the annual general meeting of a company for any year has not been held
(a) "the financial statements along with the documents required to be attached shall
be filed with the Registrar within 60 days of the last date before which the annual
general meeting should have been held"
(b) "the financial statements along with the documents required to be attached, duly
signed along with the statement of facts and reasons for not holding the annual
general meeting shall be filed with the Registrar within thirty days of the last date
before which the annual general meeting should have been held"
(c) "the financial statements along with the documents required to be attached, duly
signed along with the statement of facts shall be filed with the Registrar within 30
days of the last date before which the annual general meeting should have been held"
(d) "the financial statements along with the documents required to be attached, duly
signed along with the statement of facts and reasons for not holding the annual
general meeting shall be filed with the Registrar within 60 days of the last date before
which the annual general meeting should have been held"
108 "As per Section 138, which out of the following company shall not be required to appoint an Internal
Auditor"
(a) Listed Company
(b) "Every unlisted public company having paid up share capital of 50 crore rupees or more
during the preceding financial year"
(c) "Every unlisted public company having turnover of 200 crore rupees or more during
the preceding financial year"
(d) "Every private limited company having turnover of 100 crore rupees or more during
the preceding financial year"
109 Rule 3 of Companies (Accounts) Rules, 2014 is in relation to
(a) Manner of Books of Account to be Kept in Electronic Mode
(b) Notice of Address at Which Books of Account are to be Maintained

(c) Conditions Regarding Maintenance and Inspection of Certain Financial Information by

Director
(d) None of above
110 Rule 4A of Companies (Accounts) Rules, 2014 is in relation to
(a) Forms and Items Contained in Financial Statements
(b) Conditions Regarding Maintenance and Inspection of Certain Financial Information by
Directors
(c) Form of Statement Containing Salient Features of Financial Statements of Subsidiaries
(d) None of above
111 "The statement containing the salient feature of the financial statement of a company's
subsidiary or subsidiaries, associate company or companies and joint venture or ventures
under the first proviso to subsection (3) of section 129 shall be in"
(b) Form AOC-2 (d) Form AOC-4
(a) Manner of Consolidation of Accounts
(b) Transitional Provisions with Respect to Accounting Standards
(c) Matters to be Included in Board's Report
(d) Form of Statement Containing Salient Features of Financial Statements of Subsidiaries
113 "The Report of the Board shall contain the particulars of contracts or arrangements with
related parties referred to in sub-section (1) of section 188 in the"
(b) Form AOC-2 (d) Form AOC-4
114 Rule 8A of Companies (Accounts) Rules, 2014 is in relation to
(a) Matters to be included in Board's Report for One Person Company and Small Company
(b) Matters to be Included in Board's Report
(c) Form of Statement Containing Salient Features of Financial Statements of Subsidiaries
(d) Manner of Consolidation of Accounts
(a) Matters to be included in Board's Report for One Person Company and Small Company.
(b) Matters to be included in Board's Report
(c) Disclosures About CSR Policy
(d) Manner of Consolidation of Accounts
116 "Companies which are required to comply with Companies (Indian Accounting standards)
Rules, 2015 shall forward their statement in form"
(a) FormAOC-1 (c) FormAOC-3A
(b) FormAOC-2 (d) Form AOC-3
117 "A standardised language for communication in electronic form to express, report or file financial

information by companies, as provided in Rule 12 shall be termed as"

(a) Extensible Business Reporting Language
(b) Financial statement in electronic mode
(c) Electronic records
(d) Record in Electronic mode
(a) Companies Required to Appoint Internal Auditor
(b) Manner of Circulation of Financial Statements in Certain Cases
(c) Statement Containing Salient Features of Financial Statements
(d) Format of Extensible Business Reporting Language
ANSWERS
1 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
(a) (a) (d) (a) (c) (a) (b) (c) (c) (a) (b) (c) (d) (a) (d)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(d) (d) (c) (d) (c) (d) (d) (a) (d) (c) (a) (b) (a) (d) (c)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(b) (c) (b) (b) (c) (a) (b) (a) (a) (a) (b) (a) (d) (d) (d)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(c) (b) (d) (c) (b) (a) (a) (c) (b) (d) (b) (b) (c) (a) (a)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.
(d) (c) (a) (c) (c) (d) (a) (a) (d) (b) (c) (d) (b) (b) (b)
76. 77. 78. 79. 80 81. 82. 83. 84. 85. 86. 87. 88. 89. 90.
(c) (d) (a) (d) (d) (d) (d) (d) (c) (a) (d) (c) (a) (a) (b)
91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105.
(d) (b) (a) (d) (d) (a) (a) (b) (b) (a) (a) (a) (a) (a) (a)
106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118.
(d) (b) (d) (a) (a) (a) (a) (b) (a) (c) (c) (a) (a)

CHAPTER-10 AUDIT & AUDITORS
CHAPTER-10
AUDIT & AUDITORS
1. Can an Auditor be disqualified for indebtedness where he is recovering his fees on a progressive
basis even though the job is not complete.
(a) no indebtedness (b) indebtedness
2. Mr. Prakash, a CA in full time practice was appointed as the Auditor of ABC Ltd, a Company
which is a Subsidiary of DGH Ltd. DGH Ltd has another Subsidiary called PKM Ltd. Mr. Prakash
had taken a loan of ` 6,00,000 from PKM Ltd and the loan is outstanding as on the date of
h'c anointment as Auditor of ABC Ltd.
(a) Firm and all Partners are not qualified for appointment, if Liability exceeds ` 5,00,000.
(b) Firm and all Partners are not qualified for appointment, if Liability exceeds ` 3,00,000.
(c) Finn and all Partners are not qualified for appointment, if Lability exceeds ` 1,00,000.
(d) Firm and all Partners are qualified for appointment
3. EF Ltd re-appointed Naresh& Co, CAs, as Auditors of the Company at the AGM held on 30th
September 2015. Mrs. Kamala, wife of one of the Partners of Naresh and Co invested ` 1 Lakh
in the Equity Shares of EF Limited on 15th October 2015. But Naresh and Co. continues to
function as Statutory Auditors of the Company. State the validity—
(a) Disqualified to continue as Statutory auditor
(b) Continuing as Statutory auditor is valid
4. Remuneration of the First Auditor may be fixed by —
(a) Board of Directors (c) Members in AGM
(b) Audit Committee (d) Either of the above
5. Appointment of First Auditor by BOD shall be within________days from the date of registration
of company.
(a) 15 days (b) 60days (c) 30 days (d) 90 days
6. Appointment of First Auditor by BOD has been failed and members shall appoint the auditors
within------- days in an-------.
(a) 60 days, EGM (c) 90 days, EGM
(b) 30 days, EGM (d) 60 days, EGM
7. Appointment of First Auditor by C&AG shall be within-------days from the date of registration
of company.
(a) 15 days (c) 30 days
(b) 60days (d) 90 days
8. Appointment of First Auditor by C&AG for Govt. Company is failed then can the BOD appoint
First Auditors for them?
(a) Yes (b) No

9. Appointment of First Auditor by BOD for Govt. Company is failed then can the Members
appoint First Auditors for them?
(a) Yes (b) No
10. Appointment of First Auditor by BOD for Govt. Company is failed then Members can appoint
First Auditors for them within-----days and in-------?
(a) 60 days, AGM (c) 20 days, AGM
(b) 30 days, EGM (d) 60 days, EGM
11. Mr. Suresh, a CA, was appointed by the Board of Directors of AB Limited as the First Auditor.
In a General Meeting, the Company removed Mr. Suresh without seeking the approval of the
Central Government and appointed Mr. Gupta as Auditor in his place. State the validity—
(a) Valid (b) Not Valid
12. Mr. Prakash is the Statutory Auditor of Soya Ltd, which has Branch in Punjab. The Company
in General Meeting decided to have the accounts of Punjab Branch audited by Mr. Quaid who
was appointed without Mr. Prakash's knowledge and consent. State the validity—
(a) Valid (b) Not Valid
13. Which of the following service can be performed by Statutory Auditor to the company?
(a) Actuarial Services, (c) Management Services,
(b) Investment Advisory Services, (d) None of the above
14. Which of the following service can be performed by Statutory Auditor to the company?
(a) Design and Implementation of any Financial Information System,
(b) Only Approved Services by BOD
(c) Investment Banking Services,
(d) Accounting and Book Keeping Services,
15. During the current year, it was decided for the 1st time that the accounts of the Branch
Office of AAS Ltd be audited by qualified Chartered Accountants other than the Company
Auditor. Accordingly, the Board had appointed Branch Auditors for the ensuing year. One of
the Shareholders complained to the Central Government that the appointment was not
valid as the BOD do not have power to appoint Auditors, be they Company Auditor or Branch
Auditors.
(a) Appointment of Branch Auditors by BOD is valid
(b) Appointment of Branch Auditors by BOD is not Valid
(c) Only share holders shall ratify in AGM
16. XLW Ltd has a Branch Office in Malaysia. The Company has appointed Mr. X, who is qualified
to audit accounts as per Malaysian Laws. Mr. Z, the Statutory Auditor objects to the same,
contending that he alone can audit the Branch Office accounts.
(a) Mr.Z cannot raise objection &Appointment of Mr. X as Branch Auditor is valid.
(b) Every appointment of Branch Auditors requires approval of Statutory Auditor.

17. When a Chartered Accountant is a Partner in a number of Firms .Ceiling Limit shall be-----
----on his account in ---------in which he is Partner or Proprietor.
(a) 20 Company Audits, for each Firm
(b) 30 Company Audits, all firms together
(c) 20 Company Audits, all the Firms together
18. M/s PQR Associates, a Firm of CAs, has three Partners P, Q and R. P is also in whole time
employment elsewhere. The Firm is already holding audit of 40 Companies including audit
of one Foreign Company. The Firm is offered the audit of Z Ltd. Check whether M/s PQR
Associates can accept Audit of Z ltd?
(a) Audit of Z Ltd cannot be taken up by the Firm, since P is in whole time employment.
(b) CA firm has ceiling limit of 60 company audits since having 3 partners, hence it can
accept audit.
19. In case of CA Firm, the ceiling limit is 30 Audits per Partner,-----------audit of Private
Companies
(a) Including (b) Excluding
20. M/s PBS, a Firm of CA's, has three Partners P, B and S. The Firm is already having audit of
58 Companies. The Firm is offered 3 Company audits, out of which one is Private Company,
other is a One person company and the third one is a Public Company. Advise whether M/s
PBS will exceed the ceiling prescribed u/s 141(3)(g) by accepting the above audit assignments.
(a) Firm can take up audit of Public company and private company
(b) Firm can take up audit of Public company and One person Company
(c) Firm can take up audit of Private company and One person Company
(d) Firm can take up audit of only public Company
21. ANC & Co. a CA Firm has 3 Partners, A, N & C who have no interest in any other Partnership
Firm. The Firm has a total of 50 Company Audits. A retires on 31.08.2017. The Reconstituted
Firm accepts an Audit of Private Company on 02.09.2017. How the firm will react on this
situation?
(a) Reconstituted Firm cannot take new assignment
(b) Existing audits of 50 must be reduced to 40.
(c) Firm can takeup the new assignment irrespective of retirement
(d) Both (a) & (b)
22. "ABCD & Co." is an Audit Firm having Partners A,B,C and D, Chartered Accountants. A, B, C and
D are holding appointment as an Auditor in 4,6,10 and 20 Companies respectively. Compute
the maximum number of Audits remaining in the name of- 1. Firm 2. Individual Partners
(a) 30,16,14,10,0 (c) 40,16,4,10,10
(b) 20,6,14,0,0 (d) 10,10,0,0,0

23. Auditors act as agent of.

(a) Shareholders. (c) promoter.
(b) directors. (d) debenture holder.
24. Statutory auditor of a company in which the Central Government holds 49% and a government
company holds 19% of the paid-up share capital of the company, shall be appointed by the -
(a) Central Government
(b) Members of the company in the AGM by passing ordinary resolution
(c) Members of the company in the AGM by passing a special resolution
(d) By the Comptroller and Auditor General of India.
25. A casual vacancy arising out of resignation of company's auditor can be filled by-
(a) Company in general meeting by ordinary resolution
(b) Company in general meeting by special resolution
(c) Board of Directors
(d) Audit committee
26. Mr. Excellent, an individual Auditor wants to compute the specified number of audits and
for this purpose, a list has been drawn out. Identify the Company which shall be/not be
taken into account for the purpose of calculating specified number of audits:
(i) Audit of Private Company having paidup capital less than ` 100 crores,
(ii) Small companies,
(iii) Audit of Non-Profit Companies,
(iv) Audits of One person company,
(v) Company Audits where he is appointed as a Joint Auditor.
(a) Accept iii & v (c) Accept i, iii & v
(b) Accept i to v (d) Accept ii to v
27. M/s Rao & Rao, a Firm of Chartered Accountants, have to be appointed as the Auditors of
ABC Co Ltd, a Government Company. Who can make the appointment and fix remuneration
to the Auditors.
(a) Appointment & remuneration by company
(b) Appointment by C&AG & remuneration by company
(c) Appointment by Central Govt. & remuneration by company
(d) Appointment by C&AG & remuneration by C&AG
28. A Company in which a Nationalized Bank is holding 30% of the Subscribed Capital. State as
to how the Auditor will be appointed -
(a) Appointment by BOD in Board meeting
(b) Appointment in Audit committee meeting
(c) Appointment by company in General meeting
(d) Appointment by members of Banking company

29. A Company in which office of Auditor has become vacant on account of resignation by the
Auditor. State as to how the Auditor will be appointed -
(a) Appointment by BOD & approved by Company in General meeting
(b) Appointment in Audit committee meeting
(c) Appointment by company in General meeting
(d) Either of the above is valid appointment
30. The Paid Up Share Capital of AJD Ltd is ` 10 Crores consisting of 70 Lakh Equity Shares of `
10 each fully paid up and 30 Lakh Preference Shares of ` 10 each, fully paid up. Nationalized
Banks, UC and IDBI hold among themselves 30 Lakh Equity Shares and 25 Lakh Preference
Shares. Examine whether AJD Ltd is a Government Company.
(a) Not a Govt Company (b) Can be a Govt company
31 As per Section 139(1), Auditor shall be appointed for a period of
(a) 5 Years (c) Minimum 5 Years
(b) Up to 5 Years (d) Upto 10Years
32 Rule-4, the auditor appointed under rule 3 shall submit a certificate that -
(a) "the individual or the firm, as the case may be, is eligible for appointment and is not
disqualified for appointment under the Act"
(b) the proposed appointment is as per the term provided under the Act
(c) the proposed appointment is within the limits laid down by or under the authority of
the Act (d) All of above
33 As per Rule-4, The notice to Registrar about appointment of auditor shall be in
(a) Form ADT-1 (c) Form ADT-3
(b) Form ADT-2 (d) Form ADT-4
34 "As per Rule-4, company shall inform the auditor concerned of his or its appointment, and also file a
notice of such appointment (ADT-1) with the Registrar"
(a) within 15 days of the meeting in which the auditor is appointed
(b) within 30 days of the meeting in which the auditor is appointed
(c) within 45 days of the meeting in which the auditor is appointed
(d) within 60 days of the meeting in which the auditor is appointed
35 Rule-3-Companies (Audit and Auditors) Rules, 2014 is about
(a) Manner and Procedure of Selection and Appointment of Auditors
(b) Conditions for Appointment and Notice to Registrar
(c) Class of Companies covered u/s 139(2)
(d) Manner of Rotation of Auditors by the Companies on Expiry of Their Term
36 "In case of Public Companies having paid up share capital of 15 Cr Rupee, Appointment of Auditor shall
be recommended by"
(a) Members (c) Audit Committee
(b) Board of Directors (d) None of above

37 In case of private limited company, Appointment of Auditor shall be recommended by

(a) Members (c) Audit Committee
(b) Board of Directors (d) None of above
38 If the Board disagrees with the recommendation of the Audit Committee
(a) Still Board shall propose the name of Auditor so recommended by Audit Committee
(b) " it shall refer back the recommendation to the committee for reconsideration citing
reasons for such disagreement"
(c) Both name shall be proposed and member shall take a final decision
(d) Board shall propose the name of person so recommended by it to members
39 In case of Listed company, Audit Firm shall be appointed for
(a) Not more than one term of 5 consecutive years
(b) Not more than one term of 10 consecutive years
(c) For 5 years
(d) Minimum tenure of 5 years
40 "As per Section 139(2), an audit firm which has completed its term, shall not be eligible for
reappointment as auditor in the same company for"
(a) 5 years from the completion of such term
(b) 2 years from the completion of such term
(c) 10 years from the completion of such term
(d) 3 years from the completion of such term
41 "The Companies (Audit and Auditors) Rules, 2014 has prescribed certain classes of companies for the
purposes of section 139(2), which shall not include the following companies"
(a) All listed companies
(b) all unlisted public companies having paid up share capital of rupees 10 crore or more;
(c) all private limited companies having paid up share capital of rupees 50 crore or more;
(d) "all companies having paid up share capital of below threshold limit mentioned in
(a) and (b) above, but having public borrowings from financial institutions, banks or
public deposits of rupees 50 crores or more"
42 "If a partner, who is in charge of an audit firm and also certifies the financial statements of
the company, retires from the said firm and joins another firm of chartered accountants"
(a) "Such other firm shall also be ineligible to be appointed for a period of five years, if
such partner join as in charge of audit firm there also"
(b) Such other firm shall also be ineligible to be appointed for a period of five years
(c) Such other firm shall be ineligible to be appointed forever
(d) No such disqualification
43 First Auditor of Non-Government company shall be appointed by
(a) Board of directors within 30 days of the date of registration of the company
(b) Members within 30 days of the date of registration of the company

(c) Audit Committee within 30 days of the date of registration of the company
(d) Board of directors within 60 days of the date of registration of the company
44 In case of failure on part of auditor to appoint first auditor by non-government company
(a) company in general meeting may appoint the first auditor within 90 days
(b) company in annual general meeting may appoint the first auditor within 90 days
(c) tribunal may issue director for such appointment
(d) ROC may call meeting of members to appoint Auditor
45 In case of death of Existing auditor, any such casual vacancy shall be filled by
(a) Board within 30 days (c) Board within 60 days
(b) members within 90 days (d) ROC within 30 days
46 Situation of casual vacancy is governed by provision of
(a) Section 139(5) (c) Section 139(7)
(b) Section 139(6) (d) Section 139(8)
47 Where any vacancy is caused by the resignation of an auditor
(a) It shall be filled by Board Only
(b) "Any such vacancy shall be filled by company at a general meeting convened within
three months of the recommendation of the Board"
(c) Company shall wait for upcoming general meeting for filling such vacancy
(d) Existing auditor shall continue the office
48 "In case of Government company, the first auditor shall be appointed by the Comptroller and
Auditor- General of India within"
(a) 60 days from the date of registration of the company
(b) 30 days from the date of registration of the company
(c) 45 days from the date of registration of the company
(d) 15 days from the date of registration of the company
49 "In case the Comptroller and Auditor-General of India does not appoint first auditor, then
such auditor shall be appointed by"
(a) Board of Directors of the company shall appoint such auditor within the next 60 days.
(b) Board of Directors of the company shall appoint such auditor within the next 30 days.
(c) Members of the company shall appoint such auditor within the next 30 days
(d) Members of the company shall appoint such auditor within the next 60 days
50 "In the case of failure of the Board to appoint first auditor within the next 30 days, it shall inform the
members of the company and then such members shall appoint"
(a) such auditor within the 30 days at an extraordinary general meeting
(b) such auditor within the 60 days at an extraordinary general meeting
(c) such auditor within the 45 days at an extraordinary general meeting
(d) such auditor within 1 month at an extraordinary general meeting
51 "As per Section 139(9), at any annual general meeting, a retiring auditor may be re-appointed

at an AGM, if "
(a) he is not disqualified for re-appointment
(b) he has not given the company a notice in writing of his unwillingness to be re-
appointed
(c) "a special resolution has not been passed at that meeting appointing some other
auditor or providing expressly that he shall not be re-appointed"
(d) All of above
52 As per Section 139(10), Where at any annual general meeting, no auditor is appointed or re-
appointed
(a) Existing auditor shall continue to be the auditor of the company
(b) EGM shall be called to appoint new auditor immediately
(c) Company may approach Tribunal, which shall recommend a new auditor
(d) ROC may recommend a person as auditor
53 "As per Section 140(1), The auditor appointed under section 139 may be removed from his
office before the expiry of his term"
(a) by a special resolution of the company
(b) "after obtaining the previous approval of the Central Government by making an
application in Form ADT-2"
(c) either 1 or 2
(d) both 1 and 2
54 As per Section 140(1), once an approval of CG has been obtained, company shall
(a) hold the general meeting within 30 days
(b) hold the general meeting within 60 days
(c) hold the general meeting within 90 days
(d) Auditor stand vacated immediately
55 "If the Auditor has resigned from the company, he shall file within a period of 30 days from the date of
resignation, a statement in"
(a) Form ADT-3 (b) Form ADT-2 (c) Form ADT-1 (d) Form ADT-4
56 Where a firm including a Limited Liability Partnership is appointed as an auditor of a company
(a) "only the partners who are chartered accountants shall be authorised to act and sign
on behalf of the firm"
(b) Any partner shall be entitled to act on behalf of said firm
(c) Majority of partners shall be professionally qualified
(d) None of above
57 "As per Section 141(3), the following persons shall not be qualified for appointment as auditor of a
company-"
(a) "A body corporate other than a limited liability partnership registered under the
Limited Liability Partnership Act, 2008"

(b) an officer or employee of the company

(c) a person who is a partner, or who is in the employment, of an officer or employee of
the company
(d) All of above
58 Who among the following may be appointed as Auditor of company
(a) A person whose relative is holding security interest in company o f ₹ 2,50,000 in terms
of face value
(b) A person whose relative is indebted to company for a sum o f ₹ 3,00,000
(c) "A person who has given a guarantee or provided any security in connection with the
indebtedness of any third person to the company in of '2 Lac"
(d) "a person or a firm who has business relationship with the company, or its subsidiary,
or its holding or associate company or subsidiary of such holding company or associate
company"
59 While computing the maximum number of Audit, following companies shall be considered
(a) One person company
(b) Dormant company
(c) Small company
(d) Private companies having paid-up share capital of ₹ 150 Cr
60 Who among the following may be appointed as Auditor of company
(a) "a person who, directly or indirectly, renders any service referred to in section 144 to
the company or its holding company or its subsidiary company"
(b) "a person who has been convicted by a court of an offence involving fraud and a period
of ten years has elapsed from the date of such conviction"
(c) "a person whose relative is a director or is in the employment of the company as director or key
managerial personnel"
(d) an officer or employee of the company
61 "As per Section 143(1), Auditor shall have the power to inquire into certain matters, which shall not
include the following"
(a) "whether loans and advances made by the company on the basis of security have been
properly secured"
(b) "whether transactions of the company which are represented merely by book entries
are prejudicial to the interests of the company;"
(c) "whether assets of the company as consist of shares, debentures and other securities
have been sold at a price less than that at which they were purchased by the company;"
(d) "whether, in his opinion, proper books of account as required by law have been kept
by the company so far as appears from his examination of those books and proper
returns adequate for the purposes of his audit have been received from branches not
visited by him"

62 "As per Section 143, the Comptroller and Auditor-General of India shall within sixty days
from the date of receipt of the audit report have a right to"
(a) "conduct a supplementary audit of the financial statement of the company by such
person or persons as he may authorise in this behalf "
(b) comment upon or supplement such audit report
(c) test audit to be conducted
(d) any of above
63 "Who among the following shall not be entitled to audit the branch office of company,
which is located outside India"
(a) company's auditor
(b) by an accountant
(c) "by any other person duly qualified to act as an auditor of the accounts of the branch office in
accordance with the laws of that country"
(d) Such other professional as authorised by 1CAI for conducting the audit
64 "If an auditor of a company, has reason to believe that an offence involving fraud is being or has been
committed against the company by officers or employees of the company, he shall
immediately report the matter to the Central Government in"
(a) Form ADT-3 (c) Form ADT-5
(b) Form ADT-4 (d) Form ADT-6
65 In case of a fraud involving amount o f ? 10,00,000, the auditor shall report the matter to
(a) Audit Committee constituted under section 177
(b) Board of Director (c) Audit committee or Board
(d) Members directly
66 "Section 144 prescribed certain services which shall not be rendered by Auditor, however, it
shall include the following"
(a) actuarial services (b) investment advisory services
(c) Preparation of CMA data
(d) rendering of outsourced financial services
67 "For the purposes of sub-section (3) of section 143, the report of the auditor shall state
about existence of internal financial controls with reference to financial statement and its
operating effectiveness, this is as per"
(a) Rule 10A of Companies (Audit and Auditors) Rules, 2014
(b) Rule 10 of Companies (Audit and Auditors) Rules, 2014
(c) Rule 11A of Companies (Audit and Auditors) Rules, 2014
(d) Rule 11 of Companies (Audit and Auditors) Rules, 2014
68 "As per Rule-13 Reporting of Frauds by Auditor and Other Matters, auditor shall report the
matter to the Board or the Audit Committee"
(a) "Immediately but not later than two days of his knowledge of the fraud, seeking their reply or

observations within forty-five days"

(b) Immediately but not later than forty-five days
(c) Immediately but not later than 62 days
(d) Immediately within a reasonable time
69 Any reporting to Central Government shall be in name of
(a) Secretary, Ministry of Legal Affairs
(b) Joint Secretary, Ministry of Corporate Affairs
(c) Joint Secretary, Ministry of Home affairs
(d) Secretary, Ministry of Corporate Affairs
70 Which out of the following is incorrect in relation to reporting of fraud by Auditor
(a) "in case the auditor fails to get any reply or observations from the Board or the Audit
Committee within the stipulated period of forty-five days, he shall forward his report
to the Central Government along with a note containing the details of his report
that was earlier forwarded to the Board or the Audit Committee for which he has not
received any reply or observations"
(b) "the auditor shall report the matter to the Board immediately seeking their reply or
observations within forty-five days"
(c) "the report shall be on the letter-head of the auditor containing postal address, e-mail
address and contact telephone number or mobile number and be signed by the auditor
with his seal and shall indicate his Membership Number"
(d) The report shall be in the form of a statement as specified in Form ADT-4
71 While reporting frau to central government, Auditor shall report the matter specifying the
following:
(a) Nature of Fraud with description; (c) Parties involved
(b) Approximate amount involved (d) All of above
72 "In relation to reporting of Fraud, Board report shall also place certain detail in its board report, which
shall not include details in relation to"
(a) Nature of Fraud with description (c) Copy of reply submitted to Auditor
(b) Approximate Amount involved (d) Remedial actions taken
73 "BSP Ltd appointed XPP & Co LLP as their statutory auditors for the year ended 31 March 2018 on 18
June 2018, as per Section 139(8) of the Companies Act 2013, to fill the casual vacancy caused by
resignation of previous statutory auditors to hold office till the conclusion of next Annual General
Meeting (AGM) of BSP Ltd. BSP Ltd is listed with Bombay Stock Exchange and National Stock
Exchange. BSP Ltd is covered under auditors rotation requirements and wants to re-appoint
XPP & Co LLP at their next AGM. Please advise."
(a) "XPP & Co LLP can be re-appointed for a term of five consecutive years at the AGM and after that
can be considered for re-appointment for another five consecutive years."
(b) "XPP & Co LLP can be re-appointed for a term of four consecutive years at the AGM

and after that can be considered for re-appointment for another five consecutive
years."
(c) XPP & Co LLP can be re-appointed for a term of five consecutive years at the AGM.
(d) XPP & Co LLP cannot be re-appointed at the AGM.
74 "NTW Ltd is listed on National Stock Exchange and has a turnover of INR 4500 crores. NTW Ltd has 12
subsidiaries, 3 associate companies and 5 joint venture companies (collectively referred to as NTW
Group). AKW & Co LLP is the statutory auditor of NTW Ltd. NTW Ltd wants to appoint AKW as the
statutory auditors for entire NTW Group. In respect of this, please advise the management
of NTW Group."
(a) AKW & Co LLP can be appointed as statutory auditors for only 10 companies of NTW
Group.
(b) AKW & Co LLP can be appointed as statutory auditors for only 20 companies of NTW
Group.
(c) AKW & Co LLP can be appointed as statutory auditors for all the companies of NTW
Group.
(d) "AKW & Co LLP can be appointed as statutory auditors for all the companies of NTW Group
provided they meet the limits requirements m per the Companies Act 2013."
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(a) (a) (a) (a) (c) (c) (b) (a) (a) (d) (b) (a) (d) (b) (a)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(a) (c) (a) (a) (a) (c) (a) (d) (b) (a) (b) (c) (a) (a) (c)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(a) (d) (a) (a) (a) (c) (b) (b) (b) (a) (a) (b) (a) (a) (a)
46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
(d) (b) (a) (b) (b) (d) (a) (d) (b) (a) (a) (d) (b) (d) (b)
61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74.
(d) (d) (d) (b) (c) (c) (a) (a) (d) (b) (d) (c) (a) (d)

CHAPTER-11 Companies Incorporated Outside India
CHAPTER-11
COMPANIES INCORPORATED OUTSIDE INDIA
1. Foreign Company means___________

(a) any Company or Body Corporate outside India
(b) place of business in India
(c) conduct any business activity in India
2. One or More Citizens of India, and / or Companies or Bodies Corporate incorporated in India,
whether singly or in the aggregate, hold not less than__________of the Paid-Up Share Capital
(Equity or Preference or partly in both) of a Foreign Company, such Company shall comply
with such of the provisions the Act with regard to the business carried on by it in India, as
if it were a Company incorporated in India.
(a) 50% (b) 25% (c) 51% (d) 49%
3. Foreign Companies shall, within________of establishment of the place of business, deliver
Documents to the ROC for registration
4. Any alteration is made or occurs in the documents delivered to ROC, the Foreign Company
shall file_______to ROC, containing the particulars of the alteration, within 30 days of such
alteration.
(a) FormFC-1 (b) FormFC-4 (c) Form FC-2 (d) FormFC-3
5. A Foreign Company shall, in_______make out a Financial Statement of its Indian business
operations as per Schedule III or as near thereto as possible for each financial year,
(a) Every Financial year (c) every Half year
(b) Every calendar year (d) either (a) or (b)
6. A Foreign Company shall deliver a copy of financial statement to ROC along with_________
showing a list of all Places of Business established by the Foreign Company in India as on the
date of Balance Sheet.
(a) Form FC-1 (b) Form FC-4 (c) FormFC-2 (d) FormFC-3
7. Time Limit for filing all the documents with ROC by Foreign Company shall be_________from
the close of the financial year.
8. Every Foreign Company shall prepare and file Annual Return in Form No.FC-4, to ROC with
fees, within______from the last day of its financial year
9. Time Limit of 6 months for filing all the documents with ROC by Foreign company-and Time
limit of 60 days for filing Annual return with ROC________.
(a) can be extended and cannot be extended

(b) cannot be extended and can be extended

(c) cannot be extended and cannot be extended
(d) can be extended and can be extended
10. A Copy of-statements shall be accompanies with Financial statements for filing with ROC.
(a) Statement of Related Party Transactions showing specified particulars
(b) Statement of Repatriation of Profits showing specified particulars
(c) Statement of Transfer of Funds showing specified particulars
11. Foreign Company having Pre-lssue Paid-Up Capital and Free Reserves are at least-and it has
a Minimum Average Market Capitalization (during the last 3 years) in its parent country of
at least________
(a) USD 25 Million ,USD 75 Million (c) USD 75 Million ,USD 100 Million
(b) USD 50 Million ,USD 150 Million (d) USD 50 Million ,USD 100 Million
12. For obtaining SEBI's prior written approval, the Issuing Company should file Application to
SEBI atleast_________prior to the opening date of the IDRs issue.
13. The Issuing Company shall file a Prospectus certified by_______stating the particulars of the
resolution of the Board by which it was approved, with the SEBI and ROC, New Delhi, before
such issue.
(a) Whole Time Directors
(b) Whole Time Director and Chief Financial Officer
(c) Company secretary
(d) Chartered Accountant
14. Any Contravention of Chapter XXII Provisions by Foreign Company is punishable with______
(a) Min 1 Lakh, Max 5 lakhs (c) Min 1 Lakh, Max 3 lakhs
(b) Min 2 Lakh .Max 4 lakhs (d) Min 2 Lakh, Max 3 lakhs
15. Additional Fine of Maximum_________per day in case of continuing offence.
(a) ` 10000 (b) ` 25000 (c) ` 30000 (d) ` 50,000
16. Any Contravention of Chapter XXII Provisions by Foreign Company where every officer of
foreign company shall be punishable with__________
(a) Fine of ` 25000
(b) Imprisonment up to 6 months
(c) Fine of ` 25000/lmprisonment up to 6 months/Both
(d) Fine of ` 25000/lmprisonment up to 6 months
17. ZIA Ltd being a Foreign Company has not complied with provisions of Chapter XXII, the
company has not received a payment from a customer to the extent of ` 50 lakhs, and
the company has already due to pay ` 1.5 crores to a creditor. Thus ZIA Ltd has decided to
file suit against its Customer for Recovery, and the creditor of the company has filed case

against company for recovery of the amount. Check the validity of the situation.
(a) ZIA Ltd cannot sue until comply with provisions of Chapter XXII
(b) Third parties can sue ZIA ltd
(c) ZIA ltd can explain its facts to ROC and get special privilege to sue for recovery of
amount
(d) Both (a) and (b)
18. Nidhi shall be a_________Company with Minimum Paid up Equity Share Capital of ` 5 Lakhs.
(a) Public Company (c) One person Company
(b) Private Company (d) either of the above
19. Every Nidhi shall have Net Owned Funds_________or more
(a) > ` 15 Lakhs (c) > ` 10 Lakhs
(b) > ` 20 Lakhs (d) > ` 5Lakhs
20. Every Nidhi shall have Ratio of Net Owned Funds to Deposits________
(a) < 1:20. (b) < 1:15. (c) < 1:25. (d) < 1:10.
21. "Foreign company' means any company or body corporate incorporated which has a place of
business whether by itself or through an agent, physically or through electronic mode, and conducts
any business activity in India in any other manner."
(a) In India; in India (c) Outside India; outside India
(b) Outside India; in India (d) In India; outside India
22. Sections shall apply to all foreign companies.
(a) 380 to 386 (c) Both (a) and (b)
(b) Sections 392 and 393 (d) Sec. 380 to 393
23. " 60% of the paid-up equity share capital of ABC Inc. is held by 10 Indian citizens. ABC Inc.
shall, in respect of its Indian business, comply with , as if it were a company incorporated
in India."
(a) Chapter XXII of the Companies Act, 2013
(b) Such provisions of the Act as may be prescribed by the Central Government
(d) None of these
24. "If or more of of a foreign company is held (whether singly or in the aggregate) by one or
more Indian citizens or one or more companies or bodies corporate incorporated in India or
one or more Indian citizens and one or more bodies corporate incorporated in India, then,
such a foreign company shall, in respect of its Indian business, comply with Chapter XXII of
the Companies Act, 2013 (viz. the Chapter 'Companies Incorporated Outside India' consisting
of sections 379 to 393A) and such other provisions of the Act as may be prescribed by the
Central Government, as if it were a company incorporated in India."
(a) 51%; the paid-up equity share capital
(b) 51%; the paid-up share capital (whether equity or preference or partly equity and

partly preference)
(c) 50%; the paid-up equity share capital
(d) 50%; the paid-up share capital (whether equity or preference or partly equity and
partly preference)
25. " Within of the establishment of place of business in India by a foreign company, it shall deliver to
the documents and information specified in section 380 along with Form No. "
(a) 15 days; the Directorate of Enforcement; FC-1
(b) 30 days; the Registrar; FC-1
(c) 15 days; the Ministry of External Affairs; FC-2
(d) 30 days; the Central Government; FC-2
26. Any document which any foreign company is required to deliver to the Registrar shall be
delivered to .
(a) The Registrar having jurisdiction over the principal place of businessof the foreign
company
(b) The Registrar having jurisdiction over the placeof business established by the foreign
company
(c) The Registrar having jurisdiction over New Delhi
(d) None of these
27. " Which of the following is not required to be delivered for registration by a foreign company
to the Registrar, when a foreign company establishes a place of business in India?"
(a) " Expert's consent to the issue of the prospectus"
(b) " Full address of registered office or principal office of the company"
(c) " The particulars of opening and closing of a place of business in India on earlier
occasion(s)"
(d) "The full address of the principal place of business in India"
28. " One stablishment of a place of business in India , XYZ Inc. delivers for registration to
the Registrar the required documents. Afterwards, some alterations are made in these
documents. XYZ Inc. Is required to deliver to the Registrar for registration, within of such
alterations, a return containing the particulars of the alterations in Form No. "
(a) 15 days; FC-1 (c) 7 days; FC-3
(b) 30 days; FC-2 (d) 60 days; FC-4
29. Every foreign company shall prepare and file with , a balance sheet and profit and loss
account.
(a) The Directorate of Enforcement (c) The Ministry of External Affairs
(b) The Registrar (d) All of these
30. " The Central Government may, by notification, direct that, in the case of , the requirements
contained in section 381 with respect to preparation and filing of balance sheet and profit
and loss account shall not apply, or shall apply subject to such exceptions and modifications

as may be specified in that notification."

(a) " Any foreign company " (c) Either (a) or (b) or both
(b) Any class of foreign companies (d) None of these
31. " A copy of the balance sheet and profit and loss account shall be delivered to the Registrar by every
foreign company."
(a) In every calendar year
(b) "Within 6 months of the close of the financial year"
(c) Either (a) or (b) or both
(d) None of these
32. " If there is any special reason, the may grant extension upto to a foreign company for filing of
balance sheet and profit and loss account."
(a) The Regional Director; 3 months (c) The Regional Director; 6 months
(b) The Registrar; 3 months (d) The Registrar; 6 months
33. " statement (1): The accounts pertaining to the Indian business operations of a foreign
company shall be audited by a practicing Chartered Accountant in India or a firm or
Umited liability partnership of practicing chartered accountants. Statement (2): The
accounts pertaining to the Indian business operations of a foreign company shall be
audited by any person duly qualified to act as an auditor in accordance with the laws of the
foreign country."
(a) Only Statement (1) is correct (c) "Both the Statements are correct "
(b) Only Statement (2) is correct (d) "None of the Statements is correct "
34. " Every foreign company shall file with the Registrar, along with the financial statement, in
Form No. a list of all the places of business established by the foreign company in India as
on the date of balance sheet."
(a) FC-1 (b) FC-2 (c) FC-3 (d) FC-4
35. The financial statement of Indian business operations of a foreign company shall be prepared.
(a) In the form prescribed by the Central Government
(b) In the form prescribed by the National Financial Reporting Authority
(c) In the form prescribed by the Comptroller and Auditor General of India
(d) In the same form as in Schedule III
36. Every foreign company shall file with the Registrar, along with the financial statement .
(a) A Statement with respect to related party transactions
(b) A Statement of repatriation of profits
(c) A Statement of transfer of funds
(d) All of these
37. "Every foreign company shall exhibit outside every office or place where it carries on business
in India, the name of the foreign company, the country of incorporation and the fact that
the liability of members is limited. Such particulars shall be conspicuously exhibited in ."

(a) Legible English characters

(b) Legible characters of one of the local languages
38. Every foreign company shall exhibit outside every office or place where it carries on business
in India.
(a) The name of the foreign company"
(b) The country of incorporation
(c) The fact that the liability of members is limited
(d) All of these
39. Every foreign company shall exhibit outside every office or place where it carries on business
in India.
(a) The full address of the principal place of business in India
(b) Full address of registered office or principal office of the company
(c) The particulars of opening and closing of a place of business in India on earlier
occasion(s)
(d) None of these
40. "Every foreign company shall exhibit in all business letters, billheads and letter paper, and
in all notices, and other official publications of the company, in . ,, the name of the foreign
company, the country of incorporation and the fact that the liability of members is limited.
These particulars shall be exhibited in."
(a) Legible English characters
(b) Legible characters of one of the local languages
(d) None of these
41. "Any document required to be served on a foreign company shall be deemed to be sufficiently
served, if it is addressed to the person resident in India who is authorised to accept on
behalf of the company notices or other documents required to be served on the company
and it is ."
(a) Left at the address which has been delivered to the Registrar
(b) Sent by post to the address which has been delivered to the Registrar
(c) Sent by electronic mode
(d) Any of these
42. " The provisions contained in section(s) of the Companies Act, 2013 shall not apply to a foreign
company."
(a) 77 to 87 (b) 206 to 229 (c) 43 to 70 (d) 135
43. " Every foreign company shall prepare an annual return in Form No. and file it with the Registrar
within of the end of the financial year."

(a) FC-3; 30 days (c) FC-4; 30 days

(b) FC-3; 60 days (d) FC-4; 60 days
44. " Where a company incorporated outside India proposes to offer securities in India, the
prospectus issued for such purpose need not contain the particulars with respect to ."
(a) The instrument constituting or defining the constitution of the company
(b) The enactment under which the company was incorporated
(c) The particulars of opening and closing of a place of business in India on earlier
occasion(s)
(d) The date and the country of incorporation
45. " Where a company incorporated outside India proposes to offer securities in India, the
prospectus issued for such purpose shall be certified by ."
(a) The chairperson of the company (c) Either (a) or (b)
(b) 2 directors of the company (d) Both (a) and (b)
46. The provisions of sections 34 to 36 shall apply to .
(a) " The issue of a prospectus by a company incorporated outside India"
(b) The issue of Indian Depository Receipts by a foreign company
(d) None of these
47. " If a foreign company contravenes the provisions of Chapter XXII, it shall be punishable with
a minimum fine of , a maximum fme of and an additional fine upto per day, in the case of
a continuing offence."
(a) Rs. 5 lakh; Rs. 10 lakh; Rs. 1 lakh (c) Rs. 1 lakh; Rs. 5 lakh; Rs. 50,000
(b) Rs. 1 lakh; Rs. 3 lakh; Rs. 50,000 (d) Rs. 5 lakh; Rs. 25 lakh; Rs. 1 lakh
48. " If a foreign company contravenes the provisions of Chapter XXII, every officer of the foreign
company who is in default shall be punishable with a minimum fine of and a maximum fine
of or both."
(a) Rs. 10,000; Rs. 5 lakh (c) Rs. 25,000; Rs. 5 lakh
(b) Rs. 50,000; Rs. 5 lakh (d) Rs. 1 lakh; Rs. 5 lakh
49. " If a foreign company fails to comply with any of the provisions of Chapter XXII, then -
Statement (1): Any contract entered into by it shall not be valid. Statement (2): It may be
sued in respect of any contract entered into by it. Statement (3): It may bring any suit,
claim any set-off, make any counter claim or institute any legal proceeding in respect of
any such contract."
(c) Only Statement (3) is correct
(d) Two out of the three Statements are correct

ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
(b) (a) (b) (c) (b) (d) (c) (b) (a) (d) (d) (b) (b) (c) (d)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(c) (d) (a) (c) (a) (b) (c) (c) (d) (b) (c) (a) (b) (b) (c)
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
(d) (b) (a) (c) (d) (d) (c) (d) (d) (a) (d) (c) (d) (c) (d)
46. 47. 48. 49.

(c) (b) (c) (b)

CHAPTER-12 LIMITED LIABILITY PARTNERSHIP ACT, 2008
CHAPTER-12
LIMITED LIABILITY PARTNERSHIP ACT, 2008
1. LLP shall have atleast________Partners.

(a) 2 (b) 4 (c) 3 (d) 5
2. The maximum no. of Persons in a LLP is -
(a) 50 (b) 100 (c) 20 (d) No limit
3. Duration of LLP -
(a) Is Limited
(b) Depends on'the Partnership Agreement
(c) Extends upto proper dissolution (perpetual succession)
4. The_______is responsible for doing all acts, matters and things as are required to be done by
LLP as per the Act.
(a) Designated Partner (c) Designated Director
(b) Active Partner (d) All the Partners
5. Which of the following enjoys separate legal entity status?
(a) Partnership Firm (c) Company
(b) LLP (d) Both (b) and (c)
ANSWERS
1. 2. 3. 4. 5.
(a) (d) (c) (a) (d)

CHAPTER-1 THE GENERAL CLAUSES ACT ,1897
CHAPTER-1
THE GENERAL CLAUSES ACT ,1897
1. Section________of the Act defines certain words and expressions.

(a) 2 (b) 3 (c) 4 (d) 5
2. Where an Act of parliament does not expressly specify any particular day as to the day of
coming into operation of such Act, then it shall come into operation on the day on which
(a) It receives the Assent of the president
(b) It receives the assent of the governor-general
(c) It is notified in the official gazette
(d) None of these
3. In any central Act or regulation mad after the commencement of this Act, any act or
processing is directed or allowed to be done or taken in any court or office on a certain day
or within a prescribed period, then, if the court or office is closed on that day or the last day
of the prescribed period, the act or proceeding shall be considered as done or taken in due
time if it done or taken on_______
(a) Including; excluding (c) Including; including
(b) Excluding; including (d) Excluding; excluding
4. Where, by any central Act or regulation made after the commencement of this Act, any act
or proceeding is directed or allowed to be done or taken in any court or office on a certain
day or within a prescribed periods, then, if the court or office is closed on that day or the
last day of the prescribed periods, the act or proceeding shall be considered as done or taken
in due time if it done or taken on_______
(a) The next day afterwards on which the court or office is open
(b) The next day
(c) Such day as the court directs
(d) None of above
5. In the measurement of any distance, for the purpose of any central Act or regulation made
after the commencement of this Act. That distance shall, unless a different intention
appears, be measured________
(a) As per the map approved by the government
(b) As per the map approved by the court
(c) In a straight line on a horizontal plane
(d) None of these
6. Where, be any enactment now in force or hereafter to be in force, any duty of customs or
excise, or in the nature therefore, is leviable on any given quality, by weight, measure or
value of any goods or merchandise, then a like duty is leviable according to the same rate
on any________

CHAPTER-1 THE GENERAL CLAUSES ACT ,1897
(a) Greater quantity (c) Either (a) or (b)

(b) Lesser quantity (d) None of these
7. Statement (1): in all central Acts and regulations, any words which denote the masculine
gendler shall also be taken to include females., and vice versa. Statement (20: in all central
Acts and regulations, words in the singular shall include the plural, but not vice versa.
(a) Only statement (1) is correct (c) Both the statements are correct
(b) Only statement (2) is correct (d) None of above
8. Where a power to appoint any person to fill or execute any function is conferred, then, such
appointment may be made________
(a) By name (c) Either(a) or (b)
(b) By virtue of office (d) None of these
9. power to issue any notification, order, scheme, rule, form, or bye-law is conferred, then
expressions used in the notification, order, scheme, rule, form or bye-law, shall, unless there
8s anything repugnant in the subject or context, have the same respective meaning as in_
(a) The general clauses Act, 1897
(b) The Act or regulation conferring the power
(c) The former enactment
(d) None of these
10. Where an act or omission constitutes an offence under two or more enactment, then
offender shall be liable to be prosecuted and punished__________
(a) Under either or any of those enactments
(b) Twice for the same offence
(c) Either(a) or(b), as per the discretion of the court
(d) None of these
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
(b) (a) (b) (a) (c) (c) (d) (c) (b) (a)

CHAPTER-2 INTERPRETATION OF STATUTES
CHAPTER-2
INTERPRETATION OF STATUTES
1. interpretation of statute is to ascertain that?

(a) What intention is conveyed either expressly or impliedly by the language used in the
statute
(b) Whether in a particular case or state of facts presented to the interpreter, falls within
it
(c) Both of above. (d) None of the above
2. Fundamentally interpretation is divided into?
(a) Literal or Grammatical Interpretation and
(b) Logical Interpretation (c) Both of above.
3. The purpose of the Explanation of a section is?
(a) To interpret the words used in the section.
(b) To interpret the words of the whole statute
(c) Don s interpret anything
(d) Is an external aid
4. The 'context' of a statute means & includes:
(a) Preamble (b) The existing state of law
(c) Either statute in pari materi and such mischiefs which the statute intended to remedy
(d) All of above.
5. Ut res Megis valeat quam pereat decoded in the case of?
(a) Tin Shukhia Electric Supply C. Ltd Vs. Assam AIR, 1990.
(b) Dhoom Singh Vs. Prakash Chand Sethi AIR 1975
(c) Both of above (d) None of above
6. A taxing statute generally has a?
(a) Prospective operation. (c) Both of above
(b) Retrospective operation (d) None of above
7. Penal statutes generally have a?
(a) Prospective operation. (c) Both of above
(b) Retrospective operation (d) None of above
8. The general principles of Interpretation are?
(a) Identical expressions to have same meaning
(b) Noscitur a sociis (c) Ejusdem generis
(d) All of above.
9. Which of the following are the general principle of interpretation which the Court applied
time to time?

(a) The literal or grammatical interpretation

(b) Mischief Rule (c) Golden Rule (d) All of above.
10. The external aid in the construction of statute are derived from?
(a) Motive & object of the Legislation
(b) Contemporaneous & Historical setting
(c) Public Policy (d) All of the above.
11. The internal aid in the construction of statute is derived from which of the following thing?
(a) Context (b) Preamble (c) Headings (d) All
12. A statute which restricts a right conferred by the common law is known as?
(a) Disabling statute. (c) Penal statute
(b) Enabling statute (d) Taxing statute
13. Harmonious construction established?
(a) Inconsistency between in statutory provisions
(b) Consistency between the inconsistent statutory provisions.
(c) Neither A Nor B
(d) A is correct B is wrong
14. Supreme court while defining the relation between fundamental rights and directive
principles of state policy in the construction applies the doctrine of?
(a) Colourable Legislation (c) Harmonious Construction.
(b) Eclipse (d) None of the above
15. General Rule of construction of welfare legislation is that they should be interpreted?
(a) `Strictly (c) as court likes
(b) Only in accordance with literal rule (d) Liberally.
16. Which is not kind of welfare legislation?
(a) The child labour protection Act (b) The Industrial Dispute Act
(c) The Domestic violence Act (d) The Hindu Marriage Act.
17. Which is the fundamental principle of Constitution?
(a) Rule of law (c) Secularism
(b) Judicial Review. (d) All of above
18. When true intention of the Legislature cannot be determined by the language of the statute,
then court should see the?
(a) Indian History (b) Historical background of that statute.
(c) Negative aspect of the statute (d) Dictionary
19. The purpose of exception & saving clause is?
(a) To except something which would otherwise fall within the ambit of a statute
(b) To repeal an enactment or a statute
(c) Both a and b (d) None of above

20. Interpretation means?

(a) An art of finding out the sense of an enactment
(b) Drawing the conclusion on the basis of true spirit.
(c) To amend the statute for suitable meaning
(d) All of above
21. Proviso of a section starts with the words:?
(a) It is declared that (c) Both a&b
(b) Provided that. (d) None of above
22. Which of the following is not an internal aid to interpretation?
(a) Proviso (c) Saving clause
(b) Title (d) Parliamentary debates.
23. Statement of objects & reasons is used for?
(a) Creating ambiguity (c) Resolving the ambiguities.
(b) Discarding the statute (d) None of above
24. Can 'Marginal Notes' be used to know the intention of the legislature under Indian
Constitution?
(a) Yes, because they are entered in the constitution by the constituent assembly itself.
(b) No , because they are not entered in the constitution by the constituent itself
(c) Partly yes & partly no
25. 'Marginal Notes' cannot be used in the interpretation of statute because..?
(a) The Marginal notes are not the parts of the statute
(b) They are not made by the legislature and
(c) And some times they are be incorrect
(d) All of above.
26. Although Preamble and Proviso both are the parts of internal aid of the interpretation and
they help in the interpretation of the statute yet their help can be taken, only when-?
(a) The Language of statute is not clear
(b) The intention of the legislature is not capable of being executed from literal or
grammatical interpretation
(c) Both of above.
(d) None of above
27. The essential element of the Golden rule of interpretation are?
(a) If the words used in the statute are clear , unambiguous and general then they should
be given their meaning accordingly
(b) The interpretation of the statute should be done with the object of executing the
intention of the legislative
(c) if the language of the statute is not clear then in order to discover the intention of

the legislature the language may be varied or modified

(d) All of the above.
28. The Object of all the interpretations is to know the intention of the Parliament and this
intention should be discovered from the language used'. This statement is related to?
(a) Literal or Grammatic interpretation. (c) Both of above
(b) Logical interpretation (d) None of above
29. 'Where words of specific meaning are followed by general words the general words will be
construed as being limited to persons or things of the same genera! kind or class as those
enumerated by specific words'. This rule is called?
(a) Ejusdom generis. (c) Casus Omissus
(b) Litera Legis (d) Sententia Legis
30. 'Express word extinguishes the connecting meaning1 This statement is related which of the
following doctrine of interpretations?
(a) Expressum facit cessare taciturn. (c) Both of above
(b) Jure Naturae Sunt Immutabilla (d) None of above
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

(c) (c) (a) (d) (a) (a) (a) (d) (d) (d) (d) (a) (b) (c) (d)
16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
(d) (b) (b) (c) (b) (b) (d) (c) (a) (d) (c) (d) (a) (a) (a)

CHAPTER-3 THE FOREIGN EXCHANGE MANAGEMENT ACT ,1999
CHAPTER-3
THE FOREIGN EXCHANGE MANAGEMENT ACT ,1999
1. Mr. Ram had resided in India during the Financial Year 2017-2018 for less than 183 days. He
again came to India on 1st May, 2018 for higher studies and business and stayed upto 15th
July, 2019. State the correct answer as to the residential status of Mr. Ram in the light of
the given fact as per the Foreign Exchange Management Act, 1999. RTP(N 19)
(1) Mr. Ram can be considered as 'Person resident in India' during the financial year 2018-
2019
(2) Mr. Ram cannot be considered as 'Person resident in India' during the financial year
2018-2019
(3) Mr. Ram can be considered as 'Person resident in India' during the financial year 2019-
2020
(a) Both the statement (1) & (3) are correct
(b) Both the statement (2) & (3) are correct
(c) Only statement (1) is correct
(d) Only statement (2) is correct
2. ________an Act to consolidate and amend the law relating to foreign exchange with the
objective of facilitating external trade and payments, and for promoting the orderly
development and maintenance of foreign exchange market in India.
(a) FCRR (b) FCRA (c) FEMA (d) MRTP
3. The provisions of the Act shall apply to-
(a) Whole of India.
(b) all branches, offices and agencies outside India owned or controlled by a person
resident in India
(c) any contravention there under committed outside India, by any person to whom this
Act applies
4. Person resident in India means a person residing in India for more than 182 days during the
course of the-
(a) Preceding Financial year (c) Assessment year
(b) Current financial year (d) Calendar year
5. Srihari had resided in India during the financial year 2017-2018 for less than 183 days. He had
come to India on April 1,2018 for employment. What would be his residential status during
the Financial Year 2018-2019?
(a) Person Resident In India (b) Person Resident outside India
(c) Person Ordinary Resident in India (d) Person Not Ordinary Resident in India

6. Aruna had resided in India during the Financial Year 2016-2017. She left India on 1st August
2017 for USA for pursuing higher studies for 3 years. What would be her residential status
during the Financial Year 2017-2018 and during 2018-2019?
(a) RFY-2017-18 PRII, RFY-2018-19 PROI (c) RFY-2017-18 PRII, RFY-2018-19 PRII
(b) RFY-2017-18 PROI, RFY-2018-19 PRII (d) RFY-2017-18 PROI, RFY-2018-19 PROI
7. Mr. Pankaj born and brought up in India, goes to USA on 10.04.2017 to look after his son,
Alok, who is suffering from chronic disease, with the intention to stay over there till his
son, Alok recovers completely. Determine his residential status under FEMA for the financial
years 2017-2018 and 2018-2019?
(a) RPY-16-17- PROI, RPY-17-18- PRII (c) RPY-16-17- PRII, RPY-17-18- PROI
(b) RPY-16-17- PRII, RPY-17-18- PRII (d) RPY-16-17- PROI, RPY-17-18- PROI
8. Daisy, a Canadian Citizen, comes to India for the first time on a tourist visa for a 3 month
vacation, on 15th August 2017. After her arrival, she intends to extend her vacation. She left
India on 30th April 2018. Is she a resident in India for the year 2017-2018?
(a) RPY-16-17-PROI (b) RPY-16-17-PRII
9. Printex Computers is a Singapore based Company having several business units all over the
world. It has a unit for manufacturing computer printers with its Headquarters in Pune. It
has a Branch in Dubai which is controlled by the Headquarters in Pune. What would be the
residential status under FEMA, of the Printer Unit in Pune & that of Dubai Branch?
(a) Person Resident In India
(b) Person Resident outside India
(c) Person Ordinary Resident in India
(d) Person Not Ordinary Resident in India
10. X, a Film Star, requires USD 20,000 to perform along with his associates in New York on the
occasion of Diwali, for Indians residing at New York
(a) Prior approval of Central Government required
(b) Prior approval of RBI required
(c) Prohibited Transaction
11. Mr. Shah proposes to visit United States on a business tour and for this purpose he wants
to draw foreign exchange USD 40,000 for meeting expenses
(b) Prior approval of RBI required (c) Prohibited Transaction
(d) Permissible Transaction
12. Remittance of USD 10,000 for payment of goods purchased from a party in Nepal

13. Payment of commission on exports made towards Equity Investment in wholly owned
Subsidiary abroad of an Indian Company
14. R wants to draw USD 20,000 to make Donation to a Charitable Trust situated in South Korea.
15. Drawal of Foreign Exchange for Payment related to Call Back Services of Telephones
16. Under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules,
2000, prior approval of the Central Government is required for drawl of foreign exchange in
respect of Remittance of Prize Money / Sponsorship of sports activity abroad by a person
other than International / National / State Level Sports Bodies, where the amount exceeds
USD 1 Lakh.
(a) Ministry of Surface Transport (Chartering Wing)
(b) Ministry of Human Resources Development (Department of Youth Affairs and Sports)
(c) Ministry of Human Resource Development (Department of Education and Culture)
(d) Ministry of Finance (Department of Economic Affairs)
17. Under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules,
2000, prior approval of the Central Government is required for drawl of foreign exchange in
respect of Remittance for membership of P&l Clubs.
(a) Ministry of Finance (Insurance Division)
(b) Ministry of Finance (Department of Economic Affairs)
(c) Ministry of Information & Broad-casting, Ministry of Communication & Information
Technology.
(d) Ministry of Human Resource Development (Department of Education and Culture)
18. Lifesys Limited, a billion dollar, Indian Company wishes to create a Chair in a Reputed
University in the U.S. This Chair is for the Department of Computer Science. Is such "Chair"
creation permissible?
(a) Prohibited Transactions (b) Permissible with RBI approval
(c) Permissible with Central Govt, approval (d) Permissible Transaction

19. Drawal of foreign exchange for payments due on account of amortisation of loans is
(a) Current Account Transactions
(b) Capital Account Transaction with RBI Approval
(c) Permissible Capital Account Transactions
(d) Capital Account Transaction with No RBI restriction
20. Taking out of insurance policy by a person resident in India, from Insurance Company outside
India.
(a) Current Account Transactions
(b) Capital Account Transaction with RBI Approval
(c) Permissible Capital Account Transactions
(d) Capital Account Transaction with No RBI restriction
ANSWERS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
(b) (c) (d) (a) (b) (a) (c) (a) (a) (a)
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
(d) (b) (c) (d) (c) (b) (a) (b) (d) (c)

PAPER-2 CORPORATE AND OTHER LAWS
PAPER-2 CORPORATE AND OTHER LAWS

GENERAL MCQS & CASE STUDIES
Part I: Companies Act, 2013

1. Roma along with her six friends has incorporated Roma Trading Ltd. in May 2019. The paid-
up share capital of the company is ` 30 lacs.
Further, in April 2020, she noticed that in the last financial year, the turnover of the company
was well below ` 20 crores. Advise whether the company can be treated as a ‘small company’.
(a) Roma Trading Ltd. is definitely a ‘small company’ since its paidup capital is much
below ` 2 crores and also its turnover has not exceeded the threshold limit of ` 20
crores.
(b) The concept of ‘small company’ is applicable only in case of a private limited company/
OPC and therefore, despite meeting the criteria of ‘small company’ it being a public
limited company it cannot enjoy benefits of ‘small company’.
(c) Unlike a private limited company/OPC which automatically becomes a ‘small
company’ as soon as it meets the criteria of ‘small company’, Roma Trading Ltd. being
a public limited company has to maintain the norms applicable to a ‘small company’
continuously for two years so that, thereafter, it will be treated as a ‘small company’.
(d) If all the shareholders of Roma Trading Ltd. give an undertaking to the ROC stating
that they will not let the paid-up share capital and also turnover exceed the limits
applicable to a ‘small company’ in the next two years, then it can be treated as a
‘small company’.
2. Abhilasha and Amrita have incorporated a ‘not for profit’ private limited company which
is registered under Section 8 of the Companies Act, 2013. One of their friends has informed
them that their company can be categorized as a ‘small company’ because as per the last
profit and loss account for the year ending 31st March, 2019, its turnover was less than ` 20
crores and its paid up share capital was less than ` 2 crores. Advise.
(a) A section 8 company, which meets the criteria of ‘turnover’ and ‘paid-up share capital’
in the last financial year, can avail the status of ‘small company’ only if it acquires at
least 5% stake in another ‘small company’ within the immediately following financial
year.
(b) If the acquisition of minimum 5% stake in another ‘small company’ materializes in
the second financial year (and not in the immediately following financial year ) after
meeting the criteria of ‘turnover’ and ‘paid-up share capital’ then with the written
permission of concerned ROC, it can acquire the status of ‘small company’.
(c) The status of ‘small company’ cannot be bestowed upon a ‘not for profit’ company
which is registered under Section 8 of the Companies Act, 2013.
(d) A section 8 company, if incorporated as a private limited company (and not as public
CA Intermediate | Paper-2 | Corporate and Other Laws MCQS 175

limited company ) can avail the status of ‘small company’ with the permission of
concerned ROC, after it meets the criteria of ‘turnover’ and ‘paid-up share capital’.
3. Namita Ceramic Goods Limited having 152 members was incorporated with the main objects
of manufacture of ceramic goods, glazed, unglazed floor and wall tiles, etc. and to carry on
trading in such products. After three years of successful operation, it wants to diversify its
business by entering into the field of manufacturing electronic goods for which it is required
to alter its objects clause. Advise the company in relation to alteration of Memorandum.
(a) The company can alter its Memorandum of Association by passing an ordinary
resolution and obtaining the confirmation of the Regional Director (RD).
(b) The company can alter its Memorandum of Association by passing a special resolution
at the shareholders’ meeting.
(c) The company can alter its Memorandum of Association in relation to the objects
clause by passing a special resolution at the shareholders’ meeting and obtaining the
confirmation of the Regional Director (RD).
(d) The company can alter its Memorandum of Association in relation to the objects
clause by passing a special resolution at the shareholders’ meeting and simultaneously
publishing the contents of special resolution in two newspapers (one in English and
the other one in vernacular language) circulating in that area
4. Due to the management disputes, Flow Writing Industries Limited could not hold its current
Annual General Meeting by the latest due date. Even after lapse of the due date, it seemed
rather impossible to convene the AGM. In such a grim situation, one option available was to
approach National Company Law Tribunal (NCLT) and seek direction for the calling of AGM.
Out of the following four options, which one is applicable in the given case:
(a) Any member of the company can make an application to the National Company Law
Tribunal (NCLT) and seek direction for the calling of AGM.
(b) A member of the company holding at least 1% of the total paidup share capital must
make an application to the National Company Law Tribunal (NCLT) and seek direction
for the calling of AGM.
(c) Minimum two members of the company holding at least 1% of the total paid-up share
capital must make a joint application to the National Company Law Tribunal (NCLT)
and seek direction for the calling of AGM.
(d) Minimum five members of the company holding at least 1% of the total paid-up share
capital must make a joint application to the National Company Law Tribunal (NCLT)
and seek direction for the calling of AGM.
5. Anupam incorporated a ‘One Person Company’ (OPC) with his sister Alpana as the nominee
and about three years have passed satisfactorily.
Anupam does a number of charitable works and is associated with three NGOs. His business
under his OPC has also flourished. Now he is planning to convert the OPC into a Section 8

company (i.e. a company formed with charitable objects). Choose the correct option.
(a) Since the company belongs to Anupam, he has full discretion to convert the OPC
either as a Section 8 company or as a private or public company
(b) Since the company was formed as a private company, the only option available with
Anupam is to convert it into a public limited company.
(c) There is specific prohibition on converting OPC into a Section 8 company; otherwise it
can be converted into a private or public company without any hindrance.
(d) Since Anupam does a lot of charitable works there is no prohibition on converting his
OPC into a Section 8 company.
6. An issuing house (share broker) has issued an advertisement in two leading newspapers for
selling a large number of shares allotted to it by a company under a private placement. In
which of the following conditions will the advertisement NOT be deemed to be a prospectus:
(a) Advertisement was given within six months from the date of allotment
(b) Advertisement was given after six months from the date of allotment and the issuing
house has paid the entire consideration to the company
(c) The issuing house did not pay entire consideration to the company till the date of
allotment
(d) advertisement was given within three month from the date of allotment
7. Which of the following statements is not true?
(a) in case of shares, the rate of underwriting commission to be paid shall not exceed five
percent of the issue price of the share.
(b) underwriting commission should not be more than the rate specified by the Article of
Association.
(c) in case of debentures, the rate of underwriting commission shall not exceed five
percent of the issue price of the debentures.
(d) amount of commission may be paid out of profits of the company.
8. Which of the following statement is contrary to the provisions of the Companies Act, 2013?
(a) A private company can make a private placement of its securities.
(b) The company has to pass a special resolution for private placement.
(c) Minimum offer per person should have Market Value of ` 20,000.
(d) A public company can make a private placement of its securities.
9. A shelf prospectus filed with the ROC shall remain valid for a period of:
(a) one year from the date of registration
(b) one year from the date of closing of first issue
(c) one year from the date of opening of first issue
(d) Ninety days from the date on which a copy was delivered to ROC
10. Shripad Religious Publishers Limited has received application money of ` 20,00,000 (2,00,000
equity shares of ` 10 each) on 10th October, 2019 from the applicants who applied for

allotment of shares in response to a private placement offer of securities made by the

company to them.
Select the latest date by which the company must allot the shares against the application
money so received.
(a) 9th November, 2019 (c) 9th December, 2019.
(b) 24h November, 2019 (d) 8th January, 2020
11. Being in need of further capital, Rimsi Cotton-Silk Products Limited offered 50 lacs equity
shares of ` 1 each to 50 identified persons on ‘private placement’ basis and accordingly
a letter of offer accompanied by application the necessary form was sent to them after
fulfillment of due formalities including passing of special resolution. One of the applicants
Rajan made a written complaint to the company highlighting the fact that the offer letter
was incomplete as well as illegal, as it did not contain ‘renunciation clause’ as he wanted to
exercise his ‘right of renunciation’ in favour of his son Uday. By choosing the correct option,
advise the company in this matter.
(a) As the ‘Right of Renunciation’ cannot be denied, the company needs to rectify its
mistake by including the same in the offer letter and the application form.
(b) The company is prohibited from providing ‘Right of Renunciation’ so the offer letter
and the application form need not include any such clause.
(c) Instead of absolute prohibition, the company can provide ‘Right of Renunciation’
limited to twenty five percent of offering.
(d) Instead of absolute prohibition, the company can provide ‘Right of Renunciation’
limited to fifty percent of offering.
12. Innovative Tech Sol Limited intends to invite subscription for ` 1.10 crores equity shares
of ` 10 each on private placement basis. The persons identified as potential subscribers
are within the statutory limit and also include the two other categories to which such
statutory limit is not applicable. One such category is employees of the company who are
offered equity shares under Employees’ Stock Option Scheme. the other excluded category
is:
(a) Quality Institutional Buyers
(b) Qualified Institutional Buyers.
(c) Qualificational Institutional Buyers.
(d) Qualified Investing Institutional Buyers.
13. Neptune Metal Tools Limited was incorporated on 2nd December, 2018 with twenty-five
subscribers and authorised capital of ` 50,00,000 (5,00,000 equity shares of ` 10 each).
The directors of the company are in a dilemma whether to issue share certificates to the
subscribers in physical form or in dematerialized form. Advise them correctly on this matter:
(a) Being an unlisted company, Neptune may either issue physical share certificates to
the subscribers or alternatively, issue them in dematerialized form.

(b) Neptune needs to issue shares to the subscribers only in dematerialized form.
(c) A company having more than 100 shareholders needs to issue shares in dematerialized
form and therefore, Neptune may issue physical share certificates to the subscribers.
(d) A company having authorised capital of fifty lakhs and above needs to issue shares in
dematerialized form and therefore, Neptune may issue physical share certificates to
the subscribers.
14. The amount that an unlisted public company is required to maintain as security deposit, at
all times, with the respective depository when it dematerializes its securities shall be
(a) Equal to not less than one year’s fees payable to the depository
(b) Equal to not less than two years’ fees payable to the depository
(c) Equal to not less than two and a half years’ fees payable to the depository
(d) Equal to not less than three years’ fees payable to the depository
15. Commission is permitted to be paid to any underwriter by the company only in respect of
an offer of securities:
(a) where securities are offered on rights basis
(b) where securities are offered in the form of bonus issue
(c) where securities are offered on private placement basis
(d) where securities are offered to the public for subscription
16. In case of ‘offer of sale of shares by certain members of the company’, which of the following
options is applicable:
(a) The provisions relating to minimum subscription are not applicable
(b) Entire minimum subscription amount is required to be received within three days of
the opening date
(c) 25% of the minimum subscription amount is required to be received on the opening
date and the remaining 75% within three days thereafter
(d) 50% of the minimum subscription is required to be received by the second day of the
opening date and the remaining 50% within next three days after the second day
17. The time limit within which a copy of the contract for the payment of underwriting
commission is required to be delivered to the Registrar is:
(a) Three days before the delivery of the prospectus for registration
(b) At the time of delivery of the prospectus for registration
(c) Three days after the delivery of the prospectus for registration
(d) Five days after the delivery of the prospectus for registration
18. Shares issued by a company to its directors or employees at a discount or for a consideration
other than cash for their providing know-how or making available rights in the nature of
intellectual property rights or value additions, by whatever name called are known as:
(a) Equity Shares (c) Sweat Equity Shares
(b) Preference Shares (d) Redeemable preference shares

19. The Articles of Association of a private limited company state that the company may issue
preference shares which will have preference with respect to payment of dividend only but
no preference as to the repayment of capital, in the case of winding up. Is it possible for the
company to issue such preference shares?
(a) No; as per section 43 preference shares should have both preferences.
(b) No; this will become an equity share as per section 43.
(c) Yes; because as per section 43 preference shares should have any one preference.
(d) Yes; because Articles of Association of the company allow issue of such preference
shares and the issuing company is a private limited company.
20. A general meeting of the company is to be held on 30th August, 2020.
The company has not paid dividend in respect of its preference shares for the financial year
2018-19 as well as 2019-20. In such case preference shareholders:
(a) will not have the right to vote because preferential shareholders have no right to vote
(b) will have the right to vote because dividend has not been paid for the last two years
(c) will not have the right to vote because only equity shareholders can vote in general
meetings
(d) will have right to vote because preference shareholders have the right to vote in
general meetings
21. Where there is a change in the rights of one class of shareholders of a company that also
affects the rights of another class therein, then:
(a) A special resolution should be passed at a general meeting in this regard
(b) The company need not to do anything further
(c) the consent in writing of three-fourths of such other class of shareholders shall also
be obtained
(d) A resolution at a joint meeting of both the classes should be passed
22. Rajesh Infrastructure Limited wants to issue preference shares for a period exceeding 20
years for financing its proposed infrastructure project. On the basis of which statement,
company can do so?
(a) Yes, the company can issue irredeemable preference shares by passing a special
resolution
(b) Yes, company can issue preference shares for a period exceeding 20 years with the
prior approval of Central Government
(c) Yes, the company can issue irredeemable preference shares for infrastructure project
(d) Yes, the company can issue preference shares for financing an infrastructure project
for a period exceeding to 20 years.
23. If a company has Authorised Share Capital of ` 6,00,000, Paid-up Share Capital of ` 5,00,000
and a loan of ` 2,00,000 obtained from the State Government. The State Government has
directed the company to convert its loan into equity shares, then such order shall have the

effect of increasing:
(a) The subscribed share capital of the company
(b) The paid-up share capital of the company
(c) The Authorised Share Capital of the company
24. A company bought back 10% of its equity shares in August 2020. Due to certain miscalculations
during the first buy-back, it again bought back another 10% equity shares in September
2020. Is second buy-back valid?
(a) It can do so subject to the fulfilment of other conditions because maximum buy-back
in a financial year is up to 25%
(b) It cannot do so because there must be a time gap of 12 months between two buy-
backs
(c) It can buy back shares within one year but the company should pass an ordinary
resolution at a meeting of its board
(d) It can buy back shares within one year but the company will have to pass a special
resolution
25. Swagat Hospitality Limited defaulted in the repayment of last two instalments of term loan
availed from National Commercial Bank. On 30th September, 2019, they cleared all the dues
by repaying it. When can it issue equity shares with differential voting rights?
(a) Upon expiry of five years from the date on which the default was made good
(b) Upon expiry of three years from the end of the financial Year in which the default was
made good
(c) Upon expiry of five years from the end of the financial Year in which the default was
made good
(d) Upon expiry of seven years from the end of the financial Year in which the default was
made good
26. Radha, the original allottee of 2000 equity shares in Murti Mechanical Toys Private Limited
has transferred the same to Ruchi. The instrument of transfer dated 21st August, 2020, duly
stamped and signed by Radha was handed over to Ruchi. Advise Ruchi regarding the latest
date by which the instrument of transfer along with share certificates must be delivered to
the company, to register the transfer in its register of members.
(a) 21st August, 2020. (c) 20th October, 2020.
(b) 20th September, 2020 (d) 19th November, 2020.
27. Shreem Lakshmi Jewellery Store Private Limited was incorporated on 27th August, 2020
with 30 persons as subscribers to the Memorandum of Association and with an Authorised
share capital of ` 1 crore divided into equal number of shares off ` 1 each. Each subscriber
subscribed for ` 1.00 lac shares. Advise the company about by what date it needs to deliver
the share certificates to the subscribers.

(a) 17th September, 2020. (c) 27th October, 2020.

(b) 30th September, 2020. (d) 27th November, 2020.
28. Keshika, the original allottee and owner of 1000 equity shares of ` 50 eachin Modern Biscuits
Private Limited, wanted to transfer these shares to her younger sister Vanshika by way of
gift. She completed the transfer deed in all respects and delivered the same to the company
along with the share certificates on 17th July, 2020. However, the company di not register
the transfer even after the expiry of more than one month nor did it send any notice of
refusal. The lone reminder to the company remained unanswered. An appeal is to be filed
against the company with the National Company Law Tribunal (NCLT) against this failure to
register transfer of the said shares. Who has the right to file the appeal in this regard?
(a) Keshika, who continues to remain owner and transferor of the said equity shares till
they are registered in the name of Vanshika, has the right to file an appeal with NCLT
against the company.
(b) Vanshika, as transferee and potential owner of equity shares, has the right to file an
appeal with NCLT against the company.
(c) Both Keshika and Vanshika have to file a joint appeal with NCLT against the company,
for neither Keshika nor Vanshika are authorised to file the appeal individually.
(d) As per its discretion, NCLT may allow either Keshika or Vanshika to file an appeal
against the company.
29. Vanita Watches Limited has proposed to issue sweat equity shares to five of its employees
for the ‘value additions’ made by them in term of economic benefits which proved beneficial
to the company. The period for which the employees who have been allotted the said sweat
equity shares cannot transfer them is:
(a) One year from the date of allotment
(b) Three years from the date of allotment
(c) Five years from the date of allotment
(d) Six months from the date of allotment
30. Prithvi Cements Limited is desirous of issuing debentures carrying voting rights. Choose the
right option from the following:
(a) Prithvi Cements Limited can issue debentures carrying voting rights by passing an
ordinary resolution at a general meeting of the company.
(b) Prithvi Cements Limited can issue debentures carrying voting rights by passing a
special resolution at a general meeting of the company.
(c) Prithvi Cements Limited can issue such debentures carrying voting rights only if it
mortgages its land and buildings worth two times the amount of the debentures.
(d) Prithvi Cements Limited cannot issue debentures carrying voting rights.
31. While making an application to the Tribunal for seeking its confirmation in respect of
extinguishing the liability of ` 3 per equity share, Medhavi Publishers Limited has to file a

certificate along with the application, that the accounting treatment proposed by it for
such reduction of share capital is in conformity with the accounting standards specified in
the prescribed Section. Advise the company as to who can issue such certificate?
(a) Any of the directors of the company as authorised by the Board may issue such
certificate
(b) A practicing company secretary is authorised to issue such certificate
(c) The auditor of the company is authorised to issue such certificate
(d) The legal advisor of the company is authorised to issue such certificate
32. A reserve account that shall not be used by the company for any purpose other than
repayment of deposits is called:
(a) Debenture redemption reserve account
(b) Deposit repayment reserve account
(c) Capital redemption reserve account
(d) Free reserve account
33. Normally no deposits are repayable earlier than ______ from the date of such deposits or
renewal thereof.
(a) 3 months (c) 12 months
(b) 6 months (d) 1 year
34. Bhumi Real Estate Developers Limited has accepted deposits from its members. There is
no default in repayment of such deposits on their maturity. The statutory amount to be
deposited by the company on or before 30th April of each year in a specified account opened
with its bankers, till the deposits are fully repaid is:
(a) Not less than 50% of the amount of its deposits maturing during the following financial
year.
(b) Not less than 30% of the amount of its deposits maturing during the following financial
year.
(c) Not less than 20% of the amount of its deposits maturing during the following financial
year.
(d) Not less than 10% of the amount of its deposits maturing during the following financial
year.
35. A Limited Company is accepting deposits of various tenures from its members from time to
time. The current Register of Deposits, maintained at its registered office is complete. State
the mandatory minimum period for which it should be preserved in good order.
(a) Four years from the financial year in which the latest entry is made in the Register.
(b) Six years from the financial year in which the latest entry is made in the Register.
(c) Eight years from the financial year in which the latest entry is made in the Register.
(d) Ten years from the latest date of entry.

36. Dream World Entertainment Limited, has accepted deposits worth ` 50.00 lacs from public
on 1st April 2019 for a period of 24 months i.e. repayment of deposit would be made on 31st
March 2021. The rate of interest payable on such deposits is 9% p.a. One of the depositors
Mr. Aman requested the company on 1st June 2020 for premature repayment of his deposit
of ` 6.00 lacs along with interest. Advise the company in the said matter.
(a) The company can make premature repayment of deposits only with an intention to
reduce the total amount of deposits to bring it within permissible limits. Hence, in
the given case, the company cannot repay the deposit before the actual maturity.
(b) The company can prematurely repay the deposit along with interest @9% p.a. for the
period of 12 months (from 1st April 2019 to 31st March 2020).
(c) The company can prematurely repay the deposit along with interest @8% p.a. for the
period of 12 months (from 1st April 2019 to 31st March 2020).
(d) The company can prematurely repay the deposit along with interest @8% p.a. for the
period of 14 months (from 1st April 2019 to 31st May 2020).
37. Suneet Spices Limited decides to raise deposits of ` 20.00 lacs from its members. However,
it proposes to secure such deposits partially by offering a security worth ` 15.00 lacs. Which
of the following options best describe such deposits:
(a) Fully secured deposits (except a small portion)
(b) Unsecured deposits
(c) Partially secured deposits
(d) These cannot be classified as deposits
38. What is the maximum tenure for which a company can accept or renew deposits from its
members as well as public?
39. Ruchita wants to renew her deposit of ` 5.00 lakh with Kewal Constructions Limited before
the expiry of original period for availing higher rate of interest. The fresh period, for which
Ruchita is required to renew her deposit to be eligible for the higher rate shall be
(a) One and a half times the unexpired period of original deposit.
(b) Double the unexpired period of original deposit.
(c) Six months more in addition to the unexpired period of deposit.
(d) Longer than the unexpired period of deposit.
40. Any person acquiring property, on which charge is registered under section 77, shall be
deemed to have notice of the charge from:
(a) the expiry of thirty days of such charge
(b) the date of application for registration of the charge
(c) the date of acquiring the property
(d) the date of such registration

41. An interest or lien created on the property or assets of a company or any of its undertakings
or both as security is known as:
(a) Debt (c) Liability
(b) Charge (d) Hypothecation
42. A charge was created by Cygnus Softwares Limited on its office premises to secure a term
loan of ` 1.00 crore availed from Next Gen Commercial Bank Limited through an instrument
of charge executed by both the parties on 16th February, 2019. Inadvertently, the company
could not get the charge registered with the concerned Registrar of Companies (ROC) within
the first statutory period permitted by law and the default was made known to it by the
lending banker with a stern warning to take immediate steps for rectification. The latest
date within which the company must register the charge with the ROC so as to avoid paying
ad valorem fees for registration of the charge is
(a) 27th April, 2019. (c) 2nd May, 2019.
(b) 17th April, 2019. (d) 16th June 2019
43. Which one of the following transactions requires the passing of an ordinary resolution?
(a) To change the name of the company
(b) To alter the articles of association
(c) To reduce the share capital
(d) To declare dividends.
44. A resolution shall be a special resolution when the votes cast in favour of the resolution
by members are not less than ______________the number of votes, if any, cast against the
resolution.
(a) Twice (c) Three fourth of
(b) Three times (d) Two third of
45. Every listed company shall file with the Registrar a copy of the report on each annual
general meeting within ______ of the conclusion of the annual general meeting.
(b) 30 days (d) 90 days
46. The AGM shall be called by giving 21 clear days’ notice. However, it can be called by giving
shorter notice if members entitled to vote at that meeting give their consent in writing or
by electronic mode. In such cases how many members have to give their consent?
(a) 75% of members entitled (c) 91% of members entitled
(b) 90% of members entitled (d) 95% of members entitled
47. Dividend once declared, should be paid within_____________ days from the date of declaration
(b) 21 days (d) 45 days
48. Which of the following amount need not be credited to Investor Education and Protection
Fund Account (IEPF)?

(a) Amount in unpaid dividend account (UDA) of company

(b) Amount of matured deposits with the company
(c) Profit on sale of asset
(d) Amount of matured debentures with the company.
49. Amount to be transferred to reserves out of profits before any declaration of dividend is
___________
(a) 5% (c) 10%
(b) 7.5% (d) at the discretion of the company.
50. The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is ` 50.00
lacs divided into 5,00,000 equity shares of ` 10 each.
At its Annual General Meeting (AGM) held on 24th September, 2019, the company declared
a dividend of ` 2 per share by passing an ordinary resolution. Mention the latest date by
which the amount of dividend must be deposited in a separate account maintained with a
scheduled bank
(a) Latest by 29th September, 2019 (c) Latest by 9th October, 2019
(b) Latest by 4th October, 2019 (d) Latest by 24th October, 2019
51. The Directors of Silver tongue Solutions Limited proposed dividend at 18% on equity shares
for the financial year 2018-2019. The same was approved at the Annual general body meeting
held on 30th September 2019. Mr. Jagan was the holder of 2000 equity of shares on 31st
March, 2019, but he transferred the shares to Mr. Rajiv on 8th August 2019.
Mr. Rajiv has sent the shares together with the instrument of transfer to the company for
registration of the shares in his favour only on 25th September 2019. The registration of the
transfer of shares is pending on 30th September 2019. With respect to the dividend declared
the correct action to be taken by the company is:
(a) Pay the dividend to Mr. Jagan
(b) Pay the dividend to Mr. Rajiv
(c) Transfer the dividend in relation to such shares to the Unpaid Dividend Account
(d) Transfer the dividend in relation to such shares to the Investor Education and Protection
Fund.
52. The Board of Directors of Jip Rise Pharmaceuticals Limited wish to declare interim dividend
in the last week of July, 2018. The company has incurred a loss during the current financial
year up to the end of June, 2018. However, it is noted that during the previous five financial
years i.e., 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18, the company had declared
dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the
maximum rate at which they can declare interim dividend despite incurring loss during the
current financial year.
(a) 10%. (c) 10.5%.
(b) 11%. (d) 11.5%.

53. CSR Committee of the Board of shall consist of:

(a) Directors forming 1/3rd of the total no of directors.
(b) At least 2 directors out of which one shall be independent director.
(c) 3 or more directors out of which one shall be managing director.
(d) 3 or more directors, out of which at least 1 director shall be an independent director.
54. Provisions of CSR are applicable to:
(a) Companies with net worth of ` 250 crore or more but less than 500 crore.
(b) Companies with turnover of ` 1000 crore or more.
(c) Companies with net profit of ` 1 crore or more but less than ` 5 crore in any financial
year
(d) Companies having aggregate outstanding loans and deposits exceeding ` 50 crore or
more in any financial year.
55. One Person Company shall file a copy of the duly adopted financial statements to the
Registrar within:
(a) 30 days of the date of meeting at which it was adopted.
(b) 90 days of the date of meeting at which it was adopted.
(c) 90 days from the closure of the financial year.
(d) 180 days from the closure of the financial year.
56. Rema formed and occupied the office of director in Rem Stationers (OPC) Private Limited
which deals in manufacturing and trading of various items of stationery. Rema noticed
a changed provision which mandates that from the Financial Year 2020-21 onwards, an
OPC shall file its Annual Return in MGT - 7A. Rema is also one of the directors in another
company which too is required to file its Annual Return in MGT - 7A. Which is that ‘other
company’ where Rema also occupies the office of director in addition to OPC.
(a) That other company is a ‘small company’ where Rema also occupies the office of
director in addition to OPC.
(b) That other company is an ‘associate company’ where Rema also occupies the office of
(c) That other company is a ‘subsidiary company’ where Rema also occupies the office of
(d) That other company is a ‘dormant company’ where Rema also occupies the office of director
in addition to OPC.
57. Ayush Power Limited has reported a net profit of ` 6 crore, ` 7.5 crore and ` 3 crore for the
financial year(s) ended on March 2017, March 2018 and March 2019 respectively. The board’s
report of the company for the year ended March 2020 did not disclose the composition
of the CSR Committee on the grounds that company is not required to constitute CSR
committee as net profit during the immediately preceding financial year is less than the
statutory requirements laid down in section 135. You are required to examine in the given

scenario whether the act of non-composition and nondisclosure of the composition of
CSR committee in the Board’s Report is valid in law?
(a) No, the act of the company is not valid in law as every company is required to
constitute a CSR committee and disclose the constitution of same in the board’s
report in every financial year irrespective of the profits earned by the company.
(b) Yes, the act of the company is valid in law as the net profit of the company is less
than ` 5 crore in the immediately preceding financial year.
(c) No, the act of the company is not valid in law as composition and disclosure of
composition of CSR Committee will be required only if the profits of the company are
not less than ` 5 crore for a consecutive period of 3 financial years.
(d) The act of the company is valid only to the extent of nondisclosure of the composition
of CSR committee as the net profit of the company is less than ` 5 crore in the
immediately preceding financial year.
58. During the half year ended September 2019, the board of directors (BOD) of Vidyut
Manufacturing Limited has made an application to the Tribunal for revision in the accounts
of the company for the financial year ended as on March 2017. Further during the year
ended March 2020, the BOD has again made an application to the Tribunal for revision in
the board’s report pertaining to the year ended March 2019. You are required to state the
validity of the acts of the Board of directors.
(a) The act of the BOD is valid only to the extent of application made for revisions in
accounts as board’s report are not eligible for revision.
(b) The act of the BOD is valid as the applications made for revision in the accounts and
board’s report pertain to two different financial years.
(c) The act of the BOD is invalid as the law provides for only one time application to be
made in a financial year for revision of accounts and boards report.
(d) The act of the BOD is invalid as the application made for revision in accounts pertains
to a period beyond 2 years immediately preceding the year 2020. The application made
for revision in the Board report is however valid in law.
59. Adani Enterprises Limited has its shares listed on a recognized stock exchange in India.
During the current financial year ending on 31st March 2020, the securities and exchange
board of India (SEBI) has found some irregularities in the filings made by the company.
Accordingly, SEBI proposes to make an application to the Tribunal for reopening of the books
of accounts of the Company. You, as an expert, are called upon by SEBI to advise with which
last financial year for reopening of books of accounts an application can be made?
(a) 2015-2016 (c) 2010-2011
(b) 2013-2014 (d) 2011-2012
60. Ganesh Company Ltd, a public company incorporated under the Companies Act, 2013 has
Mr. Jay- Director, Mr. Sagar – Independent Director, Mr. Abhishek – Nominee Director and

Mr. Yash – Whole time director. Mr. Abhishek wants to inspect the books of account of
Shankar Company Limited, the subsidiary of Ganesh Company Limited. You are required to
state whether Mr. Abhishek is eligible to inspect the books of accounts of Ganesh Company
Limited?
(a) Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only
on authorization of the public financial institution on whose behalf he has been so
appointed in the board of the Ganesh Company Ltd.
(b) No. Mr. Abhishek being a nominee director can only inspect the books of account of
Ganesh Company Ltd and not its subsidiary company.
(c) Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only
on authorization by way of resolution of the board of directors.
(d) Yes, Mr. Abhishek can inspect the books of account of Shankar Company limited only
on authorization by way of resolution of the members holding not less than 25% of
the paid up share capital of the company.
61. For appointing an auditor other than the retiring auditor,
(a) Special notice is required.
(b) Ordinary notice is required.
(c) Neither ordinary nor special notice is required
(d) Approval of Central Government is required
62. The auditor of a Government Company shall be appointed or reappointed by-
(a) The Central Government
(b) Comptroller and Auditor General of India (CAG).
(c) Central Government on the advice of Comptroller and Auditor General of India.
(d) Chairman of the Board of Directors
63. Which of the following is a service prohibited to be rendered by the auditor of the Company?
(a) Design and implementation of any financial information system
(b) Making report to the members of the company on the accounts examined by him
(c) Compliance with the auditing standards
(d) Reporting of fraud against the company by officers or employees to the Central
Government
64. The word `firm’ for the purpose of Section 139 shall include-
(a) An individual auditor
(b) LLP
(c) Both an individual auditor and LLP
(d) A company
65. In view of the fact that a private company enjoys a number of privileges, Orange Pharma
Limited having 20 members is proposing to convert itself into a private company. For this
purpose, the company needs to alter its articles by inserting three restrictive clauses as

specified in Section 2(68) and the consequent change in the name of the company requires:
(a) A special resolution and prior approval of the Central Government.
(b) A special resolution prior approval of the National Company Law Tribunal (NCLT).
(c) A special resolution and prior approval of the Registrar of Companies (ROC).
(d) A special resolution and prior approval of the State Government.
66. Which of the following is not an Immovable Property?
(a) Land
(b) Building
(c) Timber
(d) Machinery permanently attached to the land
67. Where an act of parliament does not expressly specify any particular day as to the day of
coming into operation of such Act, then it shall come into operation on the day on which:
(a) It receives the assent of the President
(b) It receives the assent of the Governor General
(c) It receives assent of both the houses of Parliament
(d) It receives assent of the Prime Minister
68. As per the provisions of the General Clauses Act, 1897, where an act or omission constitutes
an offence under two or more enactments, then the offender shall be liable to be prosecuted
and punished under:
(a) Under either or any of those enactments
(b) Twice for the same offence
(c) Either (a) or (b) as per the discretion of the court
(d) Under the cumulative effect of both the enactments
69. Formal legal document which creates or confirms a right or records a fact is —
(a) a Document (c) a Statute
(b) a Deed (d) an Instrument
70. The Rule in Heydon’s case is also known as—
(a) Purposive construction (c) Golden Rule
(b) Mischief Rule (d) Exceptional Construction
71. Pick the odd one out of the following aids to interpretation—
(a) Preamble (c) Proviso
(b) Marginal Notes (d) Usage
72. Which rule of construction is applicable where there is a real and not merely apparent
conflict between the provisions of an Act, and one of them has not been made subject to
the other—
(a) Rule of Beneficial construction (c) Rule of Harmonious construction
(b) Rule of Literal construction (d) Rule of Exceptional construction

73. An internal aid that may be added to include something within the section or to exclude
something from it, is—
(a) Proviso (c) Schedule
(b) Explanation (d) Illustrations
Answer Key
Question no. Answer
1 (b) The concept of ‘small company’ is applicable only in case of a
private limited company/OPC and therefore, despite meeting the
criteria of ‘small company’ it being a public limited company
cannot enjoy benefits of ‘small company’.
2 (c) The status of ‘small company’ cannot be bestowed upon a ‘not for
profit’ company which is registered under Section 8 of the '
Companies Act, 2013.
3 (b) The company can alter its Memorandum of Association by passing
a special resolution at the shareholders’ meeting.
4 (a) Any member of the company can make an application to the
National Company Law Tribunal (NCLT) and seek direction for the
calling of AGM.
5 (c) There is specific prohibition on converting OPC into a Section 8
company; otherwise it can be converted into a private or public
company without any hindrance.
6 (b) Advertisement was given after six months from the date of
allotment and the issuing house has paid the entire consideration
to the company.
7 (c) in case of debentures, the rate of underwriting commission shall
not exceed five percent of the issue price of the debentures.
8 (c) Minimum offer per person should have Market Value of ` 20,000
9 (c) one year from the date of opening of first issue
10 (c) 9th December, 2019.
11 (b) The company is prohibited from providing ‘Right of Renunciation’
so the offer letter and the application form need not include any
such clause.
12 (b) Qualified Institutional Buyers.
13 (b) Neptune needs to issue shares to the subscribers only in
dematerialized form.
14 (b) Equal to not less than two years’ fees payable to the depository.
15 (d) When securities are offered to the public for subscription
16 (a) The provisions relating to minimum subscription are not applicable
17 (b) At the time of delivery of the prospectus for registration
18 (c) Sweat Equity Shares

19 (d) Yes; because Articles of Association of the company allow issue

of such preference shares and the issuing company is a private
limited company.
20 (b) will have the right to vote because dividend has not been paid for
the last two years.
21 (c) the consent in writing of three-fourths of such other class of
shareholders shall also be obtained
22 (d) Yes, the company can issue preference shares for financing an
infrastructure project for a period exceeding to 20 years.
23 (d) All of the above
24 (b) It cannot do so because there must be a time gap of 12 months
between two buy-backs
25 (c) Upon expiry of five years from the end of the financial Year in
which the default was made good
26 (c) 20th October, 2020.
27 (c) 27th October, 2020.
28 (b) Vanshika, as transferee and potential owner of equity shares, has
the right to file an appeal with NCLT against the company.
29 (b) Three years from the date of allotment
30 (d) Prithvi Cements Limited cannot issue debentures carrying voting
rights.
31 (c) The auditor of the company is authorised to issue such certificate
32 (b) Deposit repayment reserve account
33 (b) 6 months
34 (c) Not less than 20% of the amount of its deposits maturing during
the following financial year.
35 (c) Eight years from the financial year in which the latest entry is
made in the Register.
36 (d) The company can prematurely repay the deposit along with
interest @8% p.a. for the period of 14 months (from 1st April 2019
to 31st May 2020).
37 (b) Unsecured deposits
38 (c) 36 months
39 (d) Longer than the unexpired period of deposit
40 (d) the date of such registration
41 (b) Charge
42 (b) 17th April, 2019.
43 (d) to declare dividends.
44 (b) Three times
45 (b) 30 days
46 (d) 95% of members entitled
47 (c) 30 days
48 (c) Profit on sale of asset
49 (d) at the discretion of the company.

50 (a) Latest by 29th September, 2019
51 (c) Transfer the dividend in relation to such shares to the Unpaid
Dividend Account
52 (b) 11%.
53 (d) 3 or more directors, out of which at least 1 director shall be an
independent director.
54 (b) Companies with turnover of ` 1000 crore or more.
55 (d) 180 days from the closure of the financial year.
56 (a) That other company is a ‘small company’ where Rema also
occupies the office of director in addition to OPC.
57 (b) Yes, the act of the company is valid in law as the net profit of the
company is less than ` 5 crore in the immediately preceding
financial year.
58 (b) The act of the BOD is valid as the applications made for revision
in the accounts and board’s report pertain to two different
financial years.
59 (d) 2011-2012
60 (c) Yes, Mr. Abhishek can inspect the books of account of Shankar
Company limited only on authorization by way of resolution of
the board of directors.
61 (a) Special notice is required
62 (b) Comptroller and Auditor General of India (CAG).
63 (a) design and implementation of any financial information system
64 (b) LLP
65 (a) A special resolution and prior approval of the Central Government.
66 (c) Contract of indemnity
67 (a) It receives the assent of the President
68 (a) Under either or any of those enactments
69 (d) an Instrument
70 (b) Mischief Rule
71 (d) Usage
72 (c) Rule of Harmonious construction
73 (b) Explanation
CASE SCENARIO
1. Mr. Varinder Singh is a philanthropist apart from being the founder and director of Paridhaan
(P) Ltd. with paid-up share capital of ` 3 crore, engaged in business of renowned textile
brand named, 'Paridhaan’. He is running an old age home, a shelter-home for orphans apart
from a chain of art and language schools. These philanthropic initiatives and educational
institutions established by him are operating under the banner of a charitable trust, in
which he himself is one of the trustees. The company is losing market share due to stiff

competition from readymade brands resulting decline in turnover to ` 180 lakhs during the
immediately preceding financial year, out of which 45% consists of export sales.
His son, Jimmy, who is also a shareholder and director in Paridhaan (P) Ltd., wishes to start
a new business of e-learning platform and research-based technical education. He opted for
a corporate form of doing business, because this may help in reaching out to leading global
universities to sign MoUs’ for student and faculty exchange programs, in order to establish a
global brand, especially after the rollout of the new education policy. Jimmy wants to retain
the entire control of educational activities. Jimmy met their family friend, Mr. Chawla, who
is a renowned practicing Chartered Accountant. Mr. Chawla explains the various forms of
companies, including One Person Company (OPC) with the procedural requirements for each,
which could be considered by Jimmy for his education business. Jimmy decided to form OPC
after considering the various pros and cons.
Jimmy appoints Mr. Wilson as a nominee to his OPC. Mr. Wilson who is in his 30s, is an
academician and scholar, a graduate from MIT in CSE, and has done his masters with Jimmy.
Mr. Wilson is from Cambridge, Massachusetts, USA and is basically a US national. But, he
has been staying in India only, for the last couple of years. Mr. Wilson helps Jimmy in the
promotion of OPC.
Mr. Chawla is an auditor of Sirmaur Pharma Limited, the AGM of which was convened on
31st August 2021. As he had already confirmed his appointment with Jimmy to meet him
on that day, he asked his paid assistant, Mr. Anup, to attend the AGM on his behalf as
the company had not exempted the auditor from attending the said meeting. Mr. Anup is
Chartered Accountant, but currently is in full time employment with Mr. Chawla’s firm
since the last year or so. Mr. Anup is not holding a certificate of practice. At that AGM, based
upon the board’s recommendation, Sirmaur Pharma Limited decided to issue fully paidup
bonus share to its members out of its reserve and surplus available with it, which are as
follows:
Source Amount in `
Free Reserves 1.24 crores
Securities Premium Account 0.82 crores
Capital Redemption Reserve Account 1.07 crores
Reserves created by the revaluation of assets 0.63 crores
Multiple Choice Questions [2 Marks each]

1.1 Considering the validity of nominating Mr. Wilson to the One Person Company of Jimmy, out
of the following, which statement holds truth?
(a) Mr. Wilson is a valid nominee because he is a natural person.
(b) Mr. Wilson is a valid nominee because he is a natural person and is resident in India.
(c) Mr. Wilson is a valid nominee because he attains the majority and also engaged in the
promotion of OPC.

(d) Mr. Wilson is not a valid nominee, because he is not a citizen of India.
1.2 What is the maximum amount, upto which fully paid bonus shares can be issued by Sirmaur
Pharma Limited?
(a) ` 2.06 crores (c) ` 3.76 crores
(b) ` 3.13 crores (d) ` 2.69 crores
1.3 Mr. Varinder wants to take the benefits of relaxation available to a small company. Does
Paridhaan (P) Ltd. meets the criteria to be classified as a small company?
(a) Yes, because turnover is less than prescribed limit
(b) Yes, because both paid-up share capital and turnover are less than the prescribed
limit
(c) No, because paid-up share capital is more than the prescribed limit
(d) No, because both paid-up share capital and turnover is more than the prescribed limit
1.4 Jimmy is already a member of Paridhaan (P) ltd. and has now promoted his own OPC. Is
Jimmy eligible to incorporate an OPC as being an existing member and Director of Paridhaan
(P) ltd., which of the following statements is correct?
(a) Not eligible, because a person who is a member of any other company cannot
incorporate an OPC.
(b) Not eligible, because a person who is director of any other company cannot incorporate
an OPC as a member.
(c) Eligible, because a person can incorporate one OPC as a member despite being a
member in any other form of companies, other-than OPC.
(d) Eligible, because a person can be a member of any number of companies including any
number of OPCs.
1.5 Is Mr. Chawla liable for punishment for contravention of the provisions of Section 146 and
Section 147 of Companies Act, 2013?
(a) No, because attending AGM is not mandatory for auditor
(b) No, because Mr. Chawla attends the AGM through his representative (Mr. Anup)
(c) Yes, because in all circumstances; auditor (Mr. Chawla) must attend the AGM and that
too in person.
(d) Yes, because representative appointed by him in this case (i.e. Mr. Anup) is not qualified
to be appointed as an auditor of such a company.
Answer Key
Question no. Answer
1.1 (d) Mr. Wilson is not a valid nominee, because he is not a citizen of
India.
1.2 (b) ` 3.13 Crores
1.3 (c) No, because paid-up share capital is more than the prescribed
limit

1.4 (c) Eligible, because a person can incorporate one OPC as a member
despite being a member in any other form of companies, other
than OPC.
1.5 (d) Yes, because representative appointed by him in this case (i.e.
Mr. Anup) is not qualified to be appointed as an auditor of such
a company.
2. Mr. Kumar Arijit is a renowned finance professional with wide experience in banking
operations. Due to his experience, he has been appointed as director on the Board of various
companies. He is working as the Executive Director - Finance of Doon Carbonates Limited
(DCL) for the past 4-5 years and heading the finance department there. As per the object
clause of the Memorandum of Association of DCL, it can raise funds by way of loans for
the advancement of its business. Articles of Association of DCL authorizes the directors to
borrow up to ` 50 lakhs on behalf of the company after passing a valid board resolution and
any loans for amounts exceeding the above limit can be raised only after prior approval at
a duly convened general meeting.
Board of Directors of DCL raised ` 80 lakhs from Srikant Finance Services after passing a
board resolution and out of this amount, ` 60 lakhs was used to pay a legitimate liability
of DCL by the directors.
Such an act was ratified by the members in an EGM conducted thereafter. DCL is a widely
held company with around 5600 members as per the members register. The 21st AGM of DCL
was convened on 1st September 2021. A total of 34 members attended the meeting out of
which 7 members attending through proxy. 6 of such members were represented by single
proxy, Mr. Das. The articles of DCL is silent about the quorum. The voting at such meeting
was conducted through means of postal ballot for all the items of business on the agenda.
Mr. Kumar is also director of Padmani Silk Limited (PSL). PSL was established around 25
years back as a private company operating as a micro business with 10 employees in a
three-room building. During those years, the company grew exceptionally and went public
and was also listed on SME exchange. PSL declares the interim dividend out of the previous
year’s undistributed profit, on 31st August 2021, on the occasion of the 25th anniversary of
the company. PSL deposited the amount of said dividend in a separate bank account with
an NBFC on 4th of September, 2021. The company has not incurred any loss during current
F.Y. 2021-22 in any quarter.
Mr. Kumar hails from a farming family and carries on the business of cultivation and milling
of paddy. He is also the sole member of Fair- Deal Limited (FDL), a one person company. FDL
is operated as rice sheller and also deals in trading of high quality basmati rice. Mr. Kumar’s
father is operating as a nominee for the purposes of this OPC.
The accounts department of FDL prepared and published only Profit and Loss Account and

Balance Sheet as a financial statement and did not prepare cash flow statements and
explanatory notes to accounts.
A statement of changes in equity is not required in the case of FDL.
2.1 Regarding compliance for declaration and distribution of interim dividend by PSL, which of
the following statements is correct?
(a) There is a violation of the provisions because interim dividend can only be declared
out of current year’s profits.
(b) There is no violation at all, and all the provisions prescribed by law have been complied
with.
(c) There is a violation because the bank account shall be designated and shall be one of
existing banks account of company.
(d) There is a violation because the bank account shall be opened with scheduled banks
only.
2.2 Which of the following statements is correct, with reference to the requirement for financial
Statements of `Fair Deal Limited’
(a) FDL fails to meet the requirement because its financial statement do not include
explanatory notes to accounts
(b) FDL fails to meet the requirement because its financial statements do not include
cash flow statement
(c) FDL fails to meet the requirement because its financial statements do not include
explanatory notes to account and cash flow statement
(d) FDL has complied with the requirements related to financial statements
2.3 The borrowing of the sum of ` 80 lakhs by the directors of DCL is
(a) Void-ab-initio (c) Voidable
(b) Void (d) Valid
2.4 Regarding the validity of the 21st Annual General Meeting of DCL, which of the following
statements is correct?
(a) The meeting doesn’t have a quorum, because 30 members need to be personally present
at the meeting.
(b) The meeting is valid and has a quorum because 30 members are present at meeting
either personally or through a proxy.
(c) The meeting is valid and has a quorum, because only 5 members are required to be
present, either personally or through a proxy, if the number of members as on the
date of the meeting is more than five thousand but not more than ten thousand
(d) The meeting is valid and has a quorum, because only 15 members are required to be
present, either personally or through a proxy, if the number of members as on the
date of the meeting is more than five thousand but not more than ten thousand

Answer Key
Question no. Answer
2.1 (d) There is a violation because the bank account shall be opened
with scheduled banks only.
2.2 (a) FDL fails to meet the requirement because its financial statement
do not include explanatory notes to accounts
2.3 (d) Valid
2.4 (a) The meeting doesn’t have a quorum, because 30 members need
to be personally present at the meeting.
3. Mr. B R Mohanty, promoted two companies about two-decades ago.
He promoted these companies along with two of his elder brothers and few friends, who
are pharmaceutical and chemical engineers by profession. The companies are Well-Mount
Limited (WML) dealing in wellness products and pharmaceuticals; and Tex-Mount Limited
(TML) dealing in textile products.
During these two decades, both WML and TML have grown magnificently as both the sectors
expanded beyond imagination. Both companies went public and their stocks were listed
on leading stock exchanges. TML did well in the past and emerged as a major export unit
but in recent years the textile sector has witnessed stiff competition due to new entrants.
The increased cost of the workforce and other input materials has also made the sector
unprofitable. The recent lockdown has also affected the sector adversely. TML’s bottom
line for the current financial year is in the red. TML was declaring dividends since the very
first year of operation and is willing to continue the tradition, considering dividend to be a
signalling effect to an investor for the purpose of valuation. Rate of dividend declared for
the immediately preceding five years was 9%, 10%, 8%, 5% and 2% (9% being five years ago
and 2% being the previous year) respectively. The management at TML decided to declare
dividends out of the accumulated profits of previous years.
TML deals in exports and hence came under the scanner of the enforcement directorate,
who have called for the financial statements and books of account of TML for scrutiny for
the last 10 preceding financial years. In response to the said notice TML furnished financial
statements and books of accounts for last 8 immediately preceding financial years only,
stating that as per its article of association; TML is required to maintain and keep the
books of account only for 8 immediately preceding financial years and that too without any
records of vouchers pertaining to such accounts.
WML is doing well, it has used the outbreak of COVID-19 as a business opportunity and has
registered significant growth in both top and bottom line. For the past many years, WML
declared a dividend at a constant rate of 20%. During the financial year 2020-21, WML earns
a profit of ` 580 crores. Board of directors of WML has declared 25% dividend on 14th June
2021 without transferring any amount to the reserves. On 14th July 2021 a portion of the

dividend declared remains unpaid, due to operation of law. This amount has been transferred
to unpaid dividend account on 20th July 2021.
CA. Dev was appointed as auditor from F.Y. 2018-19 onwards, under section 139 of the
Companies Act, 2013, of WML in his individual capacity at the 17th AGM conducted on
29.09.2018.
3.1 In case of TML, which of the following statements is correct regarding the declaration of
dividend
(a) TML can’t declare the dividend because it has made loss in the current financial year.
(b) TML can declare the dividend but only up to 9% subject to satisfaction of other
conditions as well.
(c) TML can declare the dividend but only up to 5% subject to satisfaction of other
conditions as well.
(d) TML can declare the dividend but only up to 6.8% subject to satisfaction of other
conditions as well.
3.2 CA. Dev, who is the auditor of WML will have to vacate the office of the auditor at and can
be reappointed again only at
(a) 22nd AGM and 27th AGM
(b) 27th AGM and 32nd AGM
(c) 22nd AGM and 23rd AGM
(d) 22nd AGM and can’t be re-appointed again.
3.3 In case of WML, which of the following statements is correct regarding the declaration of
dividend?
(a) WML can’t declare the dividend at a rate more than 20%
(b) WML can declare the dividend out of current year’s profit but it needs to transfer sum
equal to 20% to reserve first.
(c) WML can declare the dividend out current year’s profit but it needs to transfer sum
equal to 10% of paid-up share capital to reserve first.
(d) WML can declare the dividend out of current years’ profit without transferring any %
to reserve.
3.4 In case of TML, regarding maintenance and preserving the books of account which of the
following statements is correct?
(a) TML needs to maintain and keep the books of account for 10 immediately preceding
financial years, hence TML has violated the law
(b) TML has not violated the provisions of law because it has preserved the books of
account for 8 immediately preceding financial years.
(c) TML has violated the provisions of law because it has preserved the books of account
for 8 immediately preceding financial years without preserving the relevant vouchers

pertaining to such books of account.

(d) TML has not violated the provisions of law because it is complying with its article of
association.
3.5 Regarding declaration and distribution of dividend by WML, which of the following statements
is correct keeping in mind the various timelines?
(a) WML has violated the law, because some of the dividend remain unpaid; irrespective
of reason for non-payment
(b) WML has violated the law, because unpaid dividend has to be transferred to the
unpaid dividend account on or before 19th July 2021.
(c) WML has not violated the law, because the unpaid dividend has been transferred to
the unpaid dividend account on or before 21st July 2021.
(d) WML has not violated the law, because the unpaid dividend can be transferred to the
unpaid dividend account at any time within 90 days from the date of declaration.
Answer Key
Question no. Answer
3.1 (c) TML can declare the dividend but only up to 5% subject to
satisfaction of other conditions as well.
3.2 (a) 22nd AGM and 27th AGM
3.3 (d) WML can declare the dividend out of current years’ profit without
transferring any % to reserve.
3.4 (c) TML has violated the provisions of law because it has preserved
the books of account for 8 immediately preceding financial years
without preserving the relevant vouchers pertaining to such
books of account.
3.5 (c) WML has not violated the law, because the unpaid dividend has
been transferred to the unpaid dividend account on or before to
21st July 2021.
4. Vignesh Fertilizers Limited (VFL) and Vivian Chemicals Private Limited (VCPL) were promoted
around 30 years back by Mr. Vicky Tripathi and his family members. Mr. Vicky Tripathi and
his younger brother Vinay Tripathi actively participate in the daily operations of both the
companies. VCPL is wholly owned by Tripathi family, while Tripathi family has a majority
stake of 65% in VFL.
Due to the poor economic conditions in the agriculture sector and shifting of the farmers’
focus to organic farming, the sales of Vignesh Fertilizers Limited is dipping and its bottom
line has been in the red for the last couple of years. The unabsorbed loss of VFL for the
current financial year is ` 9.8 crores. VFL didn’t pay any dividends during the last four years.
VFL has accumulated profit in the form of free reserves of ` 180 crores whereas paid-up share
capital is 918 crores as per its latest audited financial statement and loss of ` 9.8 crores
has not been deducted from such amount of free reserves. Since pressure from shareholders

of the free float is mounting, management at VFL decided to pay a dividend this year out
of accumulated profit. Finally, the dividend was declared on 31th August 2021. Some of the
dividend remained unpaid as on 30th September 2021, on account of operation of law; this
was transferred to unpaid Dividend Account and a statement containing only the names of
such beneficiaries was hosted on the website of the company on 9th November 2021.
VCPL is a mid-sized unlisted entity, with few branches (retail drug store) abroad and is not
required to appoint a director under section 149(4). During the immediately preceding F.Y.,
its net worth was ` 280 crores, turnover was ` 590 crores and net profit was ` 45.8 crores.
The profits and other information of the immediately preceding three years is given below:
Particulars Year Year Year

ended ended ended
31.3.2021 31.3.2020 31.3.2019
(` in crores) (` in crores) (` in crores)
Net Profit for the year as per section 45.8 52.0 35.8
198, including the below mentioned
income.
Profit from foreign branches 1.8 9.1 5.4
Non-operating Income 8.6 2.7 0.8
Dividend Income 4.2* 0.0 2.4
*Out of ` 4.2 crores, the amount of ` 1.8 crores is dividend received from a foreign company
not having any place of business in India.
The Board of Directors of VCPL is not clear whether they have to compulsorily form a CSR
committee. In order to avoid adverse legal consequences, VCPL constitutes a CSR committee
consisting of two (2) non-executive directors and one (1) executive director who was
appointed as chairperson of the committee.
4.1 In case of VFL, regarding the unpaid dividend, which of the following statements is correct?
(a) VFL is guilty, of non-payment of dividend, because some of the dividends remain
unpaid even after 30 days of declaration.
(b) VFL is guilty, because the list of beneficiaries of unpaid dividend is hosted on the
website after 30 days from the date it falls in the category of unpaid dividend.
(c) VFL is guilty, because the list of beneficiaries does not contain the latest known
address of beneficiaries and the amount unpaid.
(d) VFL is not guilty, because it has full-filled all the provisions of law pertaining to
unpaid dividend.
4.2 During the current year, is VCPL required to constitute CSR committee under section 135 of
Companies Act 2013?
(a) No, because it is a private company

(b) No, because it is an unlisted company and it has networth less than ` 500 crores
(c) Yes, because despite being unlisted company its turnover is above ` 500 crores
(d) Yes, because its net profit is above ` 5 crores
4.3 In the case of VFL, what can be the maximum amount of dividends payable out of accumulated
profits?
(a) ` 109.8 crores (c) ` 42.3 crores
(b) ` 100 crores (d) ` 32.5 crores
4.4 Considering the legal provisions regarding the constitution of CSR committee and the one
constituted by VCPL, state which of following the statements hold truth?
(a) Constitution of the committee is invalid because it doesn’t consist of an independent
director.
(b) Constitution of the committee is invalid because its chairperson is an executive
director.
(c) Constitution of the committee is valid because it depends purely upon the discretion
of management.
(d) Constitution of the committee is valid because company is not required to appoint an
independent director.
4.5 What is the minimum amount to be spent by VCPL on CSR activities for F.Y. 2021-22?
(a) ` 89.06 Lakhs (c) ` 75.00 Lakhs
(b) ` 78.20 Lakhs (d) ` 73.80 Lakhs
Answer Key
Question no. Answer
4.1 (c) VFL is guilty, because the list of beneficiaries does not contain
the latest known address of beneficiaries and the amount unpaid.
4.2 (d) Yes, because its net profit is above ` 5 crores
4.3 (d) ` 32.5 crores
4.4 (d) Constitution of the committee is valid because company is not
required to appoint an independent director.
4.5 (c) ` 75.00 Lakhs
5. Mr. Abhinav Gyan is a techie and one of the promoters of Doon Technology Limited (DTL). He
did his engineering from one of the prestigious IIT in Computer Science and then pursued
his Masters in management from IIM. He started DTL fifteen years back. DTL is famous for
advanced technologies such as artificial intelligence, blockchain solutions and many others.
The company went public a decade ago, but has not been listed yet. DTL is expanding its
operations in the wake of opportunities arising out of Industrial Revolution IV, therefore it
wishes to retain the profit for reinvesting in the growth of the company, but the shareholders
are seeking dividend based on the larger bottom line. The outbreak of COVID-19 was another
reason which had forced the directors to retain the earnings. After the closure of books of
accounts for the year, the directors proposed a final dividend of 10% against the expectation

of 20% by shareholders.
However, considering the extended lock-down which caused a delay in delivering the projects
(resulting in deferment of revenue and additional cost), directors wished to revoke the
dividend. The shareholders sought appointment of internal auditor for audit on a concurrent
basis, whereas management of DTL stated that it does not require to appoint an internal
auditor under the law and that this will cause an unnecessary financial burden on the
company. The excerpts from financial statements of the preceding financial year are as
under;
Particulars Amount in crores
Paid-up share capital 45
Turnover 495
Outstanding loans or borrowings* 105
Outstanding deposits# 22
*Includes inter-corporate loan of ` 25 crores.

# up-till 31st January, the outstanding deposit was ` 30 crores.
Mr. Gyan bought 40,000 shares of Time Consultancy Services Ltd. (TCS) of face value - ` 10
each, out of his savings. On such shares, the final call of ` 2 was due but remained unpaid
by Mr. Gyan. In the meantime, TCS declared dividend at a rate of 15%. Out of the total
dividend of ` 8.4 crores declared on 31st August 2021, ` 0.42 crores remained unpaid as on
30th September 2021. Out of such ` 0.42 crores, ` 12 lakhs are on account of the operation
of law and ` 3 lakhs are on account legal disputes of right to receive dividend. The unpaid
dividend of ` 0.42 lakhs was finally paid on 12th December 2021, in full.
Mr. Gyan comes from a humble background; hence as part of his ethical commitment to
uplift the society by promoting education to children of the economically weak section, he
decided to form a section 8 company named Gyan Foundation around 2 years back with the
support of a fellow professional, who later become a member of such a company. Receipts
were in excess of expenditure and hence, it was decided that Gyan foundation will declare
some dividend to its members.
5.1 Regarding unpaid call money by Mr. Gyan, in light of dividend due to him from TCS, state
which of following the statements is correct?
(a) Dividend cannot be adjusted against the unpaid call money
(b) The dividend of ` 60,000 can be adjusted against unpaid call money
(c) The dividend of ` 48,000 can be adjusted against unpaid call money, if consent is given
by Mr. Gyan.
(d) The dividend of ` 48,000 can be adjusted against unpaid call money, even if consent is
not given by Mr. Gyan.

5.2 Does DTL is required to appoint Internal Auditor u/s 138 of Companies Act 2013?
(a) No, because DTL is unlisted company
(b) No, because paid-up share capital is less than the prescribed limit
(c) Yes, because turnover and outstanding deposits have been more than the prescribed
limit
(d) Yes, because outstanding loan has been more than the prescribed limit
5.3 With reference to the declaration of dividend by Gyan Foundation, state which of following
statements hold truth?
(a) Gyan Foundation can declare dividend out of the capital as well
(b) Gyan Foundation can declare dividend either out of current years or previous years’
profit, but need to transfer a certain % to reserve.
(c) Gyan Foundation can’t declare the dividend because three years has not been elapsed
since its incorporation.
(d) Gyan Foundation can’t declare the dividend in any case.
5.4 What will be the amount of penalty which TCS needs to pay under section 127 of the
Companies Act, 2013?
(a) Up-to ` 1000 per day till the default continues
(b) ` 64,800
(c) ` 97,200
(d) ` 1,08,000
Answer Key
Question no. Answer
5.1 (b) The dividend of ` 60,000 can be adjusted against unpaid call
money
5.2 (c) Yes, because turnover and outstanding deposits have been more
than the prescribed limit
5.3 (d) Gyan Foundation can’t declare the dividend in any case.
5.4 (c) ` 97,200
6. Mr. Mohit Aggarwal is a director of Superior Carbonates and Chemicals Limited (SCCL). SCCL
was incorporated by Mr. S. K. Aggarwal (father of Mr. Mohit) on 05th July, 1995, as a public
company. SCCL accepts a loan of ` 1.5 crores from Mr. Mohit and the loan is expected to be
repaid after twenty four months. SCCL in its books of account, records the receipt as a loan
under non-current liabilities. At the time of advancing loan, Mr. Mohit affirms in writing
that such amount is not being given out of funds acquired by him by borrowing or accepting
loans or deposits from others and complete details of such loan transaction is furnished in
the boards’ report.
DBSL which is an unlisted public company, also proposed to accept the deposits from the
public as on 1st November, 2021, which would be due for repayment on 30th September,
2026. DBSL also accepts a AP (Loan against property) for a term of 10 years from a financial

institution on 18th June 2021. Charge was created on that day, but DBSL failed to register
the charge with the registrar within the prescribed time. The Registrar granted a grace
period of further 30 days to DBSL in respect of application filed by it for the same, however,
still it failed to register the charge within the prescribed time. Finally, the application for
registration of charge was furnished on 18th August 2021.
SCCL has registered office in Paonta-sahib (Himachal Pradesh) and corporate office is
situated in Dehradun (Uttarakhand) but around 15% of total members whose name is entered
in members register are residents of Nainital (Uttarakhand). SCCL has a liaison Office at
Nainital. Management of the company is willing to place the register of members at the
Nainital Liaison Office.
DBSL convene its 7th AGM on 10th September, 2021 at the registered office of the company.
Notice for same was served on 21st August 2021. 78% of members gave consent to convening
AGM at shorter notice due to ambiguity and possibility of another lockdown starting from
11th September 2021, on account of the Omicron variant of COVID-19.
6.1 Pick the right statement regarding SCCL’s willingness to keep and maintain the register of
members at the Nainital liaison office.
(a) Register of members shall be kept at either registered office or within the same city
that too after passing the resolution, hence SCCL is not correct in placing it at the
Nainital liaison office
(b) Register of members cannot be kept at any other place by SCCL, without passing an
ordinary resolution
(c) Register of members can be kept at Nainital liaison office, after passing a special
resolution, because more than 1/10th of the total members entered in the register of
members reside there
(d) Register of members cannot be kept at Nainital liaison office, even after passing
a special resolution, because less than 1/20th of the total members entered in the
register of members reside there
6.2 With reference to deposit proposed to be accepted by DBSL and its duration, you are required
to identify which of the following statements is correct:
(a) There is no requirement relating to the duration of deposit, DBSL can accept deposit
for any duration.
(b) Since DBSL is an unlisted company, provisions relating to the duration of the deposit
are not applicable to it.
(c) There is a provision of a minimum duration of six months, but no upper cap to length
is provided. Hence deposit proposed to be accepted by DBSL would be in compliance to
provisions of Law.

(d) Acceptance of deposits by DBSL would be in violation of provisions of law, because the
maximum period of acceptance of deposit cannot exceed thirty-six months.
6.3 With reference to application to the registrar for registration of charge by DBSL, which of
the following statements is correct?
(a) The charge cannot be registered now, even if the Registrar permits the same.
(b) The charge can be registered, if registrar permits with payment of ad-valorem fees.
(c) The charge can be registered, if registrar permits but with payment of additional fees
as prescribed.
(d) The charge can be registered, with payment of standard fees.
6.4 With reference to the loan advanced by Mr. Mohit to SCCL, state whether the same is to be
classified as a deposit or not?
(a) Deposit, because any sum advanced by the director whether loan or otherwise is
always classified as a deposit.
(b) Deposit, because the tenor of the loan is for a period of more than six months.
(c) Not a deposit, because such amount is recorded as loan in books of account of SCCL.
(d) Not a deposit, because the necessary written declaration is provided by Mr. Mohit in
respect of such loan advanced to SCCL.
6.5 Considering the provision relating to length of Notice for AGM, pick out the right option:
(a) Notice served by DBSL is not valid, because notice given within a shorter duration has
to be consented to by all the members entitled to vote at AGM.
(b) Notice served by DBSL is not valid, because notice given within a shorter duration has
to be consented to, by atleast 95% of members entitled to vote thereat.
(c) Notice served by DBSL is valid because such shorter notice has been consented to, by
75% of members entitled to vote thereat.
(d) Notice served by DBSL is not valid, because notice given within shorter duration needs
to be at-least consented by 50% of the members entitled to vote at the AGM and that
too, in writing.
Answer Key
Question no. Answer
6.1 (c) Register of members can be kept at Nainital liaison office,
after passing a special resolution, because more than
1/10th of the total members entered in the register of
members reside there
6.2 (d) Acceptance of deposits by DBSL would be in violation of
provisions of law, because the maximum period of
acceptance of deposit cannot exceed thirty-six months.
6.3 (b) The charge can be registered, if registrar permits with
payment of ad-valorem fees

6.4 (d) Not a deposit, because the necessary written declaration

is provided by Mr. Mohit in respect of such loan advanced
to SCCL.
6.5 (b) Notice served by DBSL is not valid, because notice given
within a shorter duration has to be consented to by at-
least 95% of members entitled to vote thereat.
7. Dr. N. Kulshrestha is a renowned professional and a director on the Board of various companies.
Two among these are Mount Electrolux Limited (MEL) and Rock Electronics Limited (REL).
Both are unlisted public companies.
MEL accepts a contract from State Power Corporation to replace electromechanical meters
with automated (“smart”) meters for residential connections and fixing them outside the
properties. The expected duration of the project is 150 days. MEL is presently considering
alternate sources of finance. The Board of MEL is looking forward to inviting deposits of ` 80
crores, but Dr. Kulshrestha is of the opinion that deposits are meant for funding long term
requirements and the present need is for the short term period. A special resolution to take
prior consent for the same was duly passed and filed with ROC.
Extracts from the latest audited financial statement of MEL are as follows:-
Particulars Amount in ` crores
Turnover 980
Paid-up Share Capital 410
Free Reserve 240
Capital Redemption Reserve 120
Security Premium Account 150
REL purchased an immovable property for its corporate office from GDI (Goenka Developer
and Infrastructure). An agreement to sell was entered on 21st August, 2021. On 31st August,
2021, property was registered in name of REL. One-month after the date of registration, on
30th September 2021, REL comes to know that the title of such property was encumbered
as there was a previous loan due to a financial institution, through a letter from such
financial institution. In the said letter, it was mentioned that charge on such property was
registered in the name of the financial institution from 16th May 2020 with the Registrar of
Companies.
21st AGM of REL was concluded on 30th May 2020 for the financial year 2019-20. The 22nd
AGM for considering the financial statements of the year 2020-21 could not be convened till
30th September, 2021 due to out-break of COVID-19. Hence an application for extension was
filed with the ROC. The ROC granted extension of two months and finally the 22nd AGM was
convened and conducted on 9th November 2021.
At the said 22nd AGM, the chairman of the Board of Directors was not present. In his absence,
a member (Mr. Venugopal) having the largest voting right proposed that he be elected as a
chairperson, and members holding the majority of voting rights were in favour of this.

But on the show of hands, Mr. Anand was identified as chairman of the meeting. The other
members demanded for a poll. The board members present were unanimously willing to
appoint Dr. Kulshrestha as chairperson of the meeting and Dr. Kulshrestha also agreed for
the same. The Articles of Association of REL is silent regarding election of chairman at
general meetings.
Multiple Choice Questions (MCQs) [2 Marks each]
7.1 With reference to convening 22nd AGM of REL, which of the following statements is correct?
(a) ROC has to grant an extension of 3 months
(b) REL has complied with the legal provisions relating to holding the AGM, by convening
the 22nd AGM with the period of extension.
(c) REL has failed to comply with the legal provisions because AGM must be held with six
months from the end of the financial year in all cases.
(d) REL has failed to comply with the legal provisions because the time gap between 21st
and 22nd AGM is more than 15 months
7.2 With reference to the duration of deposits (if invited and accepted by MEL), you are required
to resolve the query/opinion of Dr. Kulshrestha?
(a) MEL has to accept deposits for a minimum duration of six months.
(b) MEL can accept the deposit for five months for the entire ` 80 crores.
(c) MEL can accept the deposit for five months but maximum up to ` 77 crores.
(d) MEL can accept the deposit for five months but maximum up to ` 65 crores.
7.3 With reference to the encumbered nature of the property purchased by REL from GDI; identify
the date from which REL has notice of charge against such property.
(a) 16th May 2020 (c) 31st August 2021
(b) 21st August 2021 (d) 30th September 2021
7.4 With reference to sourcing of funds by acceptance of deposits, apprise the eligibility of MEL.
(a) MEL is eligible to accept deposits
(b) MEL is not eligible to accept deposits, because it is a listed public company
(c) MEL is not eligible to accept deposits, because it has a paid-up share capital of less
than five hundred crores.
(d) MEL is not eligible to accept deposits, because it has a turnover of less than one
thousand crores.
7.5 With reference to the legal provisions, regarding chairman at AGM, in the context of 22nd
AGM of REL; pick the right option.
(a) Dr. Kulshrestha will be the chairperson, because present board members are unanimously
willing to appoint him and it’s the discretion of the board to accept the demand of
poll or not.
(b) Mr. Anand will be the chairman of the meeting until conclusion, because he is elected
through a show of hands.
(c) Mr. Anand will be the chairman of the meeting, but only until some other person is
elected as Chairman as a result of a poll, if any.

(d) Mr. Venugopal will be the chairman of the meeting, because he is favoured by members
holding the majority of voting rights.
Answer Key
Question no. Answer
7.1 (b) REL has complied with the legal provisions relating to
holding the AGM, by convening the 22nd AGM with the
period of extension
7.2 (b) MEL can accept the deposit for five months for the entire
` 80 crores.
7.3 (a) 16th May 2020
7.4 (a) MEL is eligible to accept deposits
7.5 (c) Mr. Anand will be the chairman of the meeting, but only
until some other person is elected as Chairman as a result
of a poll, if any.
8. Mr. Nitin Balwani is a finance professional and one of the promoters of Sind Chemicals
Private Limited (SCPL) and director at Prism Telecommunication Limited (PTL). SCPL is a
private company, whereas PTL is a listed public company.
SCPL has 196 individual members, apart from:
- 6 employees including 3 KMPs (out of which 2 are in service and 4 are currently retired)
who have been given shares of SCPL out of ESOP as a part of their remuneration while
in service and have thus, become members of SCPL.
- Mr. A, Mr. B and Ms. C, who are joint owners of 1000 shares, Mr. X and Ms. Y, who are
also joint owners of 1200 shares of SCPL.
Mr. Balwani is the opinion that SCPL has crossed the maximum limit for members in the
case of a private company.
SCPL is growing, and is funding this growth through private equity placement. Allotment
of shares took place on 18th August 2021, after a valid invitation to subscribe to a selected
group of persons. The return of allotment was duly filed with the Registrar against this
private placement on 8th September 2021. SCPL doesn’t have a separate corporate office and
operates from its registered office itself.
Considering the expanding operations, the need for better reach and the shortage of the
available space in present premises, SCPL shifted its registered office to the capital city of
its domicile state as stated in Memorandum of Association on 28th August 2021. Copy of the
rent agreement executed in this connection was furnished to the ROC on 9th October, 2021,
in the prescribed form, along with an ordinary resolution passed in this regard.
PTL is expanding its network in the country, trying hard to reach remote villages and towns.
Member’s base is also increasing. PTL also required funds for expansion and decided to raise
money through issue of secured debentures. Debentures redeemable after 12 years were

allotted on 31st August 2021. Debenture trustees were duly appointed before the issue of
letter of offer and debenture trust deed is executed on 9th November 2021.
PTL gives loan of ` 12 Lakhs to its company secretary-cum-law officer, who is a Key Managerial
Person (KMP) under section 203 of Companies Act, 2013; for purchase of fully paid-up shares
of the company (PTL). The consolidated monthly salary of company secretary-cum-law
officer at PTL is ` 1.5 lakhs.
8.1 With reference to shifting of registered office by SCPL, identify the correct option out of the
statements mentioned below;
(a) SCPL has complied with the legal provisions.
(b) SCPL should have passed special resolution instead of a ordinary resolution.
(c) SCPL should have furnished intimation to ROC within 30 days.
(d) SCPL should have passed special resolution instead of ordinary resolution and should
have intimated the same to the ROC within 30 days.
8.2 With reference to the legal validity of the issue of secured debenture by PTL, identify the
correct statement out of the following:
(a) PTL has complied with the legal provision relating to issue and allotment of secured
debentures.
(b) PTL has failed to comply with the law because the redemption period of the debentures
is 12 years and the debenture trust deed is executed on 9th November 2021.
(c) PTL has failed to comply with the law because the redemption period of the debentures
is 12 years.
(d) PTL failed to comply with the law because the debenture trust deed is executed on
9th November 2021.
8.3 Examine the legality of granting a loan to the company secretary-cum-law officer by PTL
and pick the correct statement out of following.
(a) Valid, because a loan is granted to acquire fully paid-up shares
(b) Invalid, because a loan is granted by the company to its KMP to acquire its own
shares.
(c) Invalid, because the amount of loan granted is more than the amount equal to six
months’ salary.
(d) Invalid, because a loan has been granted by the company to its KMP and that too for
an amount exceeding six months’ salary to acquire its own shares.
8.4 With reference to the requirement related to the maximum number of members in case of
a private company, you are required to quantify the number of members:
(a) 198 Members, because joint owners need to be considered as a single owner and
members whose membership arises out employment will not be counted
(b) 201 Members, because joint owners will be counted in full and members whose

membership arises out employment will not be counted

(c) 201 Members, because joint owners need to be considered as a single owner and
members whose membership arises out employment as KMP will not be counted.
(d) 202 Members, because joint owners need to be considered as a single owner and
members whose membership arises out of employment will not be counted provided
they are in service.
8.5 Evaluate the legal validity of the return of allotment filed by SCPL in respect of the private
placement, by selecting the correct option.
(a) Default, because the return needs to be filed by 2nd of September, the penalty is `
6000/-
(b) Default, because the return needs to be filed by 2nd of September, the penalty is `
12000/-
(c) No Default, because the return needs to be filed by 17th of September, hence no
penalty
(d) No Default, because the return needs to be filed by 17th of October, hence no penalty
Answer Key
Question no. Answer
8.1 (d) SCPL should have passed special resolution instead of
ordinary resolution and should have intimated the same to
the ROC within 30 days.
8.2 (b) PTL has failed to comply with the law because the
redemption period of the debentures is 12 years and the
debenture trust deed is executed on 9th November 2021.
8.3 (d) Invalid, because a loan has been granted by the company to
its KMP and that too for an amount exceeding six months’
salary to acquire its own shares.
8.4 (a) 198 Members, because joint owners need to be considered
as a single owner and members whose membership arises
out employment will not be counted.
8.5 (a) Default, because the return needs to be filed by 2nd of
September, the penalty is ` 6000/-.
9. Mr. I J Gulati is a renowned research scholar in the field of agricultural science and had
worked as a professor in the Agricultural University of Rajasthan. Mr. Gulati possesses
diverse experience in latest techniques in irrigation and shed farming with technological
intervention. He joined the board of National Fertilizers Limited (NFL) and Doon Agro
Products Limited (DAPL) as an expert advisor and was later elevated to director in both the
companies.
The share capital of NFL is divided into different classes of shares. NFL wants to entrust
varied rights to the shares of a particular class, for this purpose they took consent in

writing from ¾th of the holders of the issued shares of that class but didn’t pass the special
resolution.
Although terms of issue of the shares of that class don’t prohibit such a variation, the
memorandum of the company does not contain any such provision regarding the variation
of rights.
Mr. Gulati incorporated OPC which helps farmers with forecasts on the weather, new
agricultural techniques, various fund schemes including the opportunity of interest subsidies
and subvention, marketing opportunities, gains in supporting the business of agro-products,
etc.
Mr. Porwal who was appointed as a nominee, decided to permanently settle down with his
son in USA. Hence prior to leaving for the US, he wishes to withdraw his consent as nominee.
NFL holds 54% of the total share capital of Doon Fertilizers Limited (DFL), by virtue of this,
NFL can exercise voting rights equivalent to 48% of the total voting power at DFL. NFL can
change the composition of the board because it can appoint 5 out of a total of 12 directors
at the board of DFL.
DAPL has decided to buy-back its own shares and the relevant extracts from the balance
sheet of DAPL are given below:-
Liabilities Amount (` In crores)

Paid-up Share Capital (30 crores shares of ` 10 each, fully paid – up) 300
Reserve and Surplus (free reserves) 350
6% Secured Debentures 1000
The current market price of a share is ` 20 and the buy-back price is expected to be either
` 21 or 22 per share. The company is proposing to buy back at-least 3 crores shares. Apart
from secured debentures, there is an unsecured debt of ` 200 crores. Since the price of ` 21/ `
22 was not acceptable to many members, it was felt that special resolution is not expected
to be passed. Therefore, it was decided to pass a board resolution to effect the buy-back.
Buy-back process was initiated on 18th August 2021 and completed on 9th September 2021.
Mr. Gulati had heard somewhere that the shares bought back should be physically destroyed.
9.1 With reference to buy-back process initiated by DAPL, identify the correct statement:
(a) DAPL can buy-back 3 crores shares @ ` 22 per share, as it can buy-back up to 7.5 crores
shares.
(b) DAPL cannot buy-back 3 crores shares @ ` 22 per share, because the maximum amount
available for buy-back is 65 crores.
(c) DAPL can buy-back 3 crores shares @ ` 21 per share, because the maximum amount

available for buy-back is 65 crores.

(d) DAPL cannot buy-back 3 crores shares, even @ ` 21 per share.
9.2 Identify the correct statement out of the following, regarding the status of DFL and its
relationship with NFL
(a) DFL is a subsidiary of NFL, as NFL holds more than 50% of the total share capital of
DFL
(b) DFL is a subsidiary of NFL, as NFL can affect the composition of the board at DFL
(c) DFL is a subsidiary of NFL, as NFL holds more than 50% of the total share capital of
DFL and can affect the composition of the board at DFL
(d) DFL is not a subsidiary of NFL
9.3 Examine the legality of variation of rights in respect of a particular class of shares by
NFL & pick the correct statement out of the following regarding validity of variation of
shareholders’ rights and compliance by NFL:
(a) Invalid, because variation of shareholders’ right is not allowed by law.
(b) Variation of shareholders’ rights is valid, and necessary legal compliances are also met
in full.
(c) Variation of shareholders’ rights is valid, but NFL has failed to comply with the
necessary requirement i.e. passing a special resolution at a separate meeting of the
holders of the issued shares of that class.
(d) Variation of shareholders’ rights is valid, but NFL is not authorized to entrust the
same because its memorandum doesn’t allow for the same.
9.4 Mr. Porwal can withdraw his consent as a nominee, by giving written notice to
(a) The sole member of the company
(b) Registrar of companies
(c) The sole member of company and to OPC
(d) OPC and to Registrar of companies
9.5 By selecting the correct option, evaluate the legal validity of physically destroying the
shares which were bought back by DAPL assuming all the conditions for such buyback are
satisfied by DAPL.
(a) DAPL is not legally required to physically destroy the shares
(b) DAPL shall extinguish and physically destroy the shares within a reasonable time after
completion of the process of buy-back
(c) DAPL shall extinguish and physically destroy the shares by 16th September 2021
(d) DAPL shall extinguish and physically destroy the shares by 24th September 2021
Answer Key
Question no. Answer
9.1 (d) DAPL cannot buy-back 3 crores shares, even @ ` 21 per share.
9.2 (d) DFL is not a subsidiary of NFL

9.3 (b) Variation of shareholders’ rights is valid, and necessary legal

compliances are also met in full.
9.4 (c) The sole member of company and to OPC
9.5 (c) DAPL shall extinguish and physically destroy the shares by
16th September 2021.
10. Mr. Manoj Samwal is retired chief librarian from Central University of Technical Education.
After retirement, he joined his family business as a whole-time director of Samwal Paper
Mill Limited (SPML). Mr. Manoj also incorporated another company Doon Printers and
Publishers Limited (DPPL), which is engaged in printing and publishing books of academic
and professional importance. Assets of SPML were charged in favour of a financial institution
as collateral for a loan. Due to default in the re-payment of the amount due, financial
institutions has moved the court. The court appointed Mr. Rawat as a receiver in its order
dated 9th November, 2021. A copy of the order was received by him on 12th November 2021.
DPPL is growing its business, for which it requires funds. After considering the available
sources of funds and the cost of capital, DPPL decided to raise funds through the public
deposit route. DPPL accepted deposits on 1st September 2021 by creating a charge on its
assets.
During his employment, Mr. Manoj promoted a company for the purpose of promoting the
customs, traditions, and language of the Garhwal region of Uttarakhand, the said company
was licensed under section 8 with the name National Book Depot Foundation (NBD) alongwith
his friends and relatives. Due to terms of his employment, he kept himself away from the
management and operational activities of NBD.
But now he has started participating in the management and daily operations of NBD, which
is mainly engaged in the publication as well as the distribution of books based on Garhwal
culture, the religious importance of Uttarakhand, and the opportunity for tourism. NBD
has a registered office in Haridwar. NBD organized a book fair at Garhwal Mandal Hall in
Mussoorie, situated in the foothills of the Garhwal Himalayan range in Dehradun district of
Uttarakhand.
Mr. Manoj felt that if NBD conducts its AGM at the place where book fair is conducted, book
fair will be a big hit as members could also enjoy and witness the culture Garhwal. There
would also be a saving of cost. He therefore proposed this suggestion to the board of NBD.
Board of directors at NBD decided to convene AGM at Mussoorie during the book-fair. No
directions with respect to place of AGM have been given to the Board of directors by the
company at any of its general meetings.
Mr. Barthwal, one of the members of NBD found it difficult to attend the AGM, and so he
authorized his son-in-law, Mr. Negi, a member as his proxy. Mr. Negi is a foreign national
and was in India due to certain family ceremonies. Mr. Negi attended the meeting where he
demanded a poll. The said meeting was adjourned to the next week, Mr. Negi attended the

adjourned meeting too, where he requested to inspect the minute book.

10.1 With reference to holding AGM at Mussoorie by NBD, identify the correct statement.
(a) NBD has violated the provisions of the Act and is guilty because AGM can be held only
at the registered office or at any other place in the same city.
(b) NBD is legally correct because the board of directors is authorized in this regard and
hence their decision shall prevail.
(c) NBD can hold a meeting at a place outside the city in which registered office is
situated, only after passing a special resolution and obtaining the permission of the
central government.
(d) NBD has to get consent from all the members in writing or through electronic mode in
advance to convene AGM at a place other than the city in which the registered office
is situated.
10.2 DPPL needs to register the charge by;
(a) 16th September, 2021 (c) 16th October, 2021
(b) 1st October, 2021 (d) 31st October, 2021
10.3 In furtherance to a court order regarding the appointment of Mr. Rawat as a receiver, Mr.
Rawat shall give notice (along with a copy of the order) of such appointment to
(a) The company by 9th December, 2021
(b) The company and the registrar by 9th December, 2021
(c) The company by 12th December, 2021
(d) The company and the registrar by 12th December, 2021
Answer Key
Question no. Answer
10.1 (b) NBD is legally correct because the board of directors is
authorized in this regard and hence their decision shall
prevail.
10.2 (b) 1st October, 2021
10.3 (b) The company and the registrar by 9th December, 2021
11. NAGARJUN AIRCONDITIONERS LTD. (NAL) is a contract manufacturing company incorporated

on 1.2.2021 with the primary objective of manufacturing a full range of residential, commercial
and portable air conditioners for renowned brands in India. NAL is a family owned unlisted
public company, limited by shares. NAL has its registered office in Hyderabad, Telangana and
marketing offices in four metropolitan cities at New Delhi, Kolkata, Mumbai and Bengaluru.
SAMUGA, one of the seven members, who also had subscribed to the memorandum of
association of NAL, unfortunately met with a road accident and expired on 31.03.2021.
All the remaining members attended the funeral. Business was as usual thereafter. All the
members, as was the usual practice, were kept informed from time to time regarding all

the important matters and issues relating to the company without fail by the CFO cum
Company Secretary NIRANJAN.
The Company continued its business only with its exiting other members for the next few
months. SUGUNA, the wife of SAMUGA was taken as a member of NAL on official records
only on 20.12.2021.
Meanwhile, NAL borrowed unsecured loans of ` 15 crores repayable on demand for meeting
working capital needs between the period 15.10.2021 to 15.12.2021 from one of its directors.
MUDDU KRISHNA, who is only a family friend, but not a family member. The unsecured
loan was borrowed with the stipulation of interest @10% p.a. payable on monthly basis on
the outstanding amount(s) to MUDDU KRISHNA, until the demand for payment of principal
is made in writing to the company. However, MUDDU KRISHNA, because of his strained
relationship with NAGARJUN, the managing director of NAL, resigned as a director of the
company on 31.12.2021 and demanded immediate repayment of the entire sum of ` 15 crores
lent by him to NAL with interest of 10% p.a. NAL followed delaying tactics, which finally
resulted in MUDDU KRISHNA suing NAGARJUN severally for the entire debts owed by NAL to
him, since he was the head of the family. There was no unpaid amount of NAGARJUN on the
shares held by him of NAL.
MUDDU KRISHNA is also the member of One Person Company (OPC) MUDDU KRISHNA AGRO
INDUSTRIES (OPC) PVT LTD. The OPC has been incorporated since the last one year. The
Turnover of the OPC during the last financial year was ` 1 Crore. The paid up capital of the
Company increased to ` 55 Lacs from ` 5 Lacs as on 15.01.2022.
MUDDU KRISHNA after leaving the directorship with NAL continued his business as the
member of his OPC.
Years passed. Size of the business and share capital of NAL substantially increased. NAL
plans to go for expansion in its capacity, keeping in mind export market, which required
about ` 25 crores. NAL started looking for various options for financing. One of the options
considered was offer or invitation for subscription of equity through private placement.
The Board identified a select group of 50 persons and issued private placement offer and
applications after passing a special resolution at a general meeting and also after duly
following the required procedure under the corporate laws. Monies received on application
were kept in a separate bank account with Canara Bank.
However, for some reasons NAL could not allot the equity shares within a period of 60
days from the date of receipt of the application money. The private placement plan was
effectively cancelled, duly following the required procedure. NAL later opted for bank loans
to finance the expansion.
NAL is authorized by its articles of association to accept whole or any part of the amount
of remaining unpaid calls from any member, although till date, no part of that amount
has been called up. NARESH, one of the shareholders deposited in advance the remaining

amount due on his shares without any calls made by NAL. NAL declared dividend during the
year after such advance money was paid by NARESH. NARESH wanted to exercise his voting
rights also in respect of call money paid in advance at the general meeting.
BHUSHAN AIRCONDITIONERS PVT LTD (BAPL) has been holding 5% equity in NAL, since
February 2018. During the month of February 2022, NAL invested in 70% equity shares of
BAPL. NAGARJUN wants to understand from NIRANJAN the implications of 5% holding of
BAPL.
Multiple Choice Questions (MCQs) [2 Marks each]
11.1 (i) The Board identified select group of 50 persons and issued private placement offer and
applications duly following the required procedure under the corporate laws.
(a) Public at large is to be informed about such an issue through release of public
advertisement through utilizing any media, marketing, distribution channels or
agents;
(b) A release of public advertisement in any local newspaper and one national newspaper
informing private placement is sufficient.
(c) No company issuing securities under private placement shall release any public
advertisements or utilize any media, marketing or distribution channels or agents to
inform the public at large about such an issue.
(d) Informing the public at large through advertisement or otherwise is optional and the
Board of Directors by passing a Board Resolution may decide the matter.
(ii) However, for some reasons NAL could not allot the equity within a period of 60 days from
the date of receipt of the application money.
(a) The company shall repay the application money to the subscribers within 15 days
from the expiry of 60 days and if the company fails to repay the application money
within the aforesaid period, it shall also be liable to repay the money with interest @
18% PA from the expiry of the 75th day;
(b) Since Private Placement, NAL can take further 60 days time with the subscribers
agreeing to pay interest @18% PA from the extended date until the actual allotment.
(c) The company shall repay the application money to the subscribers within 15 days
12% PA from the expiry of the 60th day;
(d) The company shall repay the application money to the subscribers within 15 days
12% PA from the expiry of the 75th day.
11.2 NARESH, one of the shareholders deposits in advance the remaining amount due on his
shares without any calls made by NAL.

(i) NAL declared dividend during the year.

(a) NARESH is not entitled to any dividend in respect of call money paid in advance;
(b) NARESH is entitled to proportionate dividend in respect of call money paid in advance,
if authorized by a Board Resolution;
(c) NARESH is entitled to proportionate dividend in respect of call money paid in advance,
if authorized by an Ordinary Resolution in a general meeting;
(d) NARESH is entitled to proportionate dividend in respect of call money paid in advance,
if authorized by Articles of Association.
(ii) NARESH wanted to exercise his voting rights also in respect of call money paid in advance
in a general meeting;
(a) NARESH can exercise his voting rights also in respect of call money paid in advance in
a general meeting, since the relevant shares have been fully paid up.
(b) There would be no voting rights on that advance amount of NARESH in a general
meeting till the amount is duly called for and adjusted;
(c) NARESH can exercise his voting rights also in respect of call money paid in advance in
a general meeting, if agreed by a Board resolution.
(d) NARESH can exercise his voting rights also in respect of call money paid in advance in
a general meeting, if agreed by an Ordinary resolution of Members.
11.3 NAGARJUN wanted to understand from NIRANJAN the implications of 5% holding of BAPL.
(a) BAPL shall surrender its 5% equity holding to NAL immediately once it becomes the
subsidiary of NAL;
(b) BAPL shall transfer its 5% equity holding to any nominees of NAL before it becomes
the subsidiary of NAL;
(c) BAPL shall immediately transfer its 5% equity holding to any other legal person or
entity before investment by NAL;
(d) BAPL may continue to hold 5% equity holding in NAL.
Answer Key
Question no. Answer
11.1(i) (c) No company issuing securities under private placement
shall release any public advertisements or utilize any
media, marketing or distribution channels or agents to
inform the public at large about such an issue.
11.1(ii) (c) The company shall repay the application money to the
subscribers within 15 days from the expiry of 60 days and
if the company fails to repay the application money within
the aforesaid period, it shall also be liable to repay the
money with interest @ 12% PA from the expiry of the 60th ]
day.

11.2(i) (d) NARESH is entitled to proportionate dividend in respect of

call money paid in advance, if authorized by Articles of
Association
11.2(ii) (b) There would be no voting rights on that advance amount of
NARESH in a general meeting till the amount is duly called
for and adjusted
11.3 (d) BAPL may continue to hold 5% equity holding in NAL.
12. It was time for Triveni Kitchen and Home Gadgets Limited (TKHGL) based at Kozhikode,
Kerala to redeem 30,000 redeemable preference shares of ` 100 each at a premium of ` 30 per
share. These preference shares were issued five years back in January, 2017 i.e. during the
Financial Year 2016-17 to finance the purchase of a state-of-the art compact plant which
would replace certain worn-out machineries responsible for higher production costs. As a
complimentary gesture, the employees who were required to operate the newly purchased
plant were given the requisite training of fifteen days by the seller of the plant without any
charge.
Triveni is an established name in the world of kitchen and home gadgets with twelve years
of presence – be it pressure cook wares, cooktops, grinders, OTGs, Microwaves, Built-in Gas
HOBs, or kitchen hoods, to name a few.
It was clarified by Shipra Dass, the financial controller of the company, that the profits
were sufficient to meet the resultant liability arising out of the redemption of preference
shares at a premium. Therefore, the redemption was carried out of the profits which were
otherwise available for declaration of dividend to the shareholders of the company. After
the redemption of preference shares, a requisite amount was transferred out of profits to
Capital Redemption Reserve Account. As on the date of redemption, no liability on account
of dividend payment to the preference shareholders was existing.
It may be noted that the company was incorporated with an Authorised Capital of ` 250.00
lakhs divided into twenty-two lakhs equity shares of ` 10 each and 30,000 redeemable
preference shares of ` 100 each. The equity shares were fully subscribed at the time of
incorporation but the preference shares were issued as fully paid-up only five years back.
The reserves of Triveni consisted of General Reserves, Dividend Equalisation Fund, Workmen
Compensation Reserve and Investment Fluctuation Reserve. Included in the list of non-
current assets were Land and Building, Plant and Machinery, Vehicles, and Furniture and
Fixtures.
Earlier, for the Financial Year 2020-21, the company had declared a dividend of ` 4 per share
at its Annual General Meeting held on 7th September, 2021. However, a dividend of ` 42,000
payable on 10,500 equity shares remained unclaimed even after the expiry of statutory
period within which dividend was required to be paid.

The company owned a plot of land in Kochi, a prominent urban area of Kerala which was
purchased by it after the date of its incorporation. As the property rates were going up, it
was decided by Hariharan Nair, Venkatesh, Siva Kumar and Balakrishnan, the directors of
the company, to revalue the plot during the current financial year 2021- 22.
It was found that the fair market value of the plot was approximately six times the original
price based on a moderate estimate. This resulted in a revaluation profit of ` 75.00 lakhs. The
directors are contemplating to use the revaluation profit of ` 75.00 lakhs along with other
distributable profits for declaration of dividend in the next Financial Year.
12.1 Out of the given options, which should be the purpose for which amount lying to the credit
of CRR Account can be utilised:
(a) Amount lying to the credit of CRR Account cannot be utilized for any purpose during
the life-time of the company.
(b) Amount lying to the credit of CRR Account can be utilised for issuing fully paid-up
bonus shares to the members of the company.
(c) Amount lying to the credit of CRR Account can be utilised for declaration of dividend.
(d) Amount lying to the credit of CRR Account can be utilised for paying up fresh issue
of debentures to the members and such debentures shall be redeemed only after ten
years from the date of issue.
12.2 State the period within which the company must have transferred the unpaid dividend
amount to a special account opened by it in that behalf in a scheduled bank.
(a) Within three days after the expiry of the statutory period within which dividend was
required to be paid.
(b) Within five days after the expiry of the statutory period within which dividend was
(c) Within seven days after the expiry of the statutory period within which dividend was
(d) Within ten days after the expiry of the statutory period within which dividend was
12.3 How much amount the company would have transferred to Capital Redemption Reserve
(CRR) Account?
(a) ` 39,00,000 (c) ` 19,50,000
(b) ` 30,00,000 (d) ` 15,00,000
12.4 Please advise the directors with respect to use of the revaluation profit.
(a) The directors can use the revaluation profit of ` 75.00 lakhs along with other
distributable profits for declaration of dividend.
(b) The directors cannot use the revaluation profit of ` 75.00 lakhs along with other
distributable profits for declaration of dividend.

(c) The directors can use only 75% of the revaluation profit of ` 75.00 lakhs along with
other distributable profits for declaration of dividend.
(d) The directors can use only 50% of the revaluation profit of ` 75.00 lakhs along with
other distributable profits for declaration of dividend.
12.5 If the company had decided not to utilise such profits for the purpose of redemption which
other option could it have used for accomplishing such redemption?
(a) No other option is available for the purpose of redemption of preference shares except
profits which are otherwise available for declaration of dividend to the shareholders
of the company.
(b) Out of the proceeds of a fresh issue of shares made for the purpose of redemption of
preference shares.
(c) Out of the proceeds of a fresh issue of debentures to be redeemed only after ten years.
(d) Out of the proceeds of a long-term loan raised from the bankers of the company for
the purpose of redemption of preference shares.
Answer Key
Question no. Answer
12.1 (b) Amount lying to the credit of CRR Account can be utilised
for issuing fully paid-up bonus shares to the members of
the company.
12.2 (c) Within seven days after the expiry of the statutory period
within which dividend was required to be paid.
12.3 (b) ` 30,00,000
12.4 (b) The directors cannot use the revaluation profit of ` 75.00
lacs along with other distributable profits for declaration
of dividend.
12.5 (b) Out of the proceeds of a fresh issue of shares made for the
purpose of redemption of preference shares.
13. Vishal Crockery Limited was incorporated on 24th September, 2014 under the jurisdiction
of Registrar of Companies, Rajasthan with its registered office located in Jaipur and its
manufacturing units spread out in Mumbai, Kanpur, Delhi and Ludhiana. Under the dynamic
leadership of Hans Rajpal, the Chairman and Managing Director (CMD) of the company, the
company had reached new heights of success.
There were eight directors in the company including the CMD out of which two were
independent directors.
The turnover of the company for the Financial Year 2020-21 was ` 750.00 crores – a whopping
rise of more than 20% from the previous year and the net profit stood at an impressive figure
of ` 6.60 crores – an increase of ` 1.80 crores as compared to the net profit of the previous
year. The company had a net worth of ` 250.00 crores; and it was noticed that the net worth

had also registered a northernwestern trend by more than 15%. The authorised and paid-up
share capital of the company was ` 8.00 crores. Keeping in view the applicability of forming
a CSR Committee for the current financial year 2021-22, a CSR Committee was formed with
four directors as members of which one was an independent director. The Committee was,
among other objectives, given the responsibility of formulating and recommending to the
Board, a Corporate Social Responsibility Policy which would indicate the activities to be
undertaken by the company within the framework specified in Schedule VII.
The company plans to diversify its business by adding another segment to manufacture
steel utensils and therefore, is desirous of shifting its registered office to Mumbai from
Jaipur which will help the company in carrying on the new business effectively. Another
strategically important segment which the company tapped earlier and now wishes to
engage itself in on a large scale relates to manufacturing of stationery items.
The company hopes that with the shifting of registered office to Mumbai, it will be able to
target international markets to export its quality products. As on date, the export turnover
of the company is not significant. The directors, Janardan Mittal (Finance) and Ratish Jain
(Marketing), however, have in-depth knowledge of export markets, particularly those
existing in UK and Singapore, where they can place their products successfully and achieve
wealth maximisation.
During the current Financial Year 2021-22, the company provided ample support for
improvement of infrastructure in schools established at Mumbai, Kanpur, Delhi and Ludhiana
as part of its CSR activities. In addition, the company contributed towards establishment
of Digital Smart Classroom, Libraries and computer labs in these cities. The company also
deployed mobile medical units equipped with medical facilities and qualified doctors. In
addition to this a large number of public health and sanitation activities had been initiated
under Swachh Bharat Abhiyan. The total amount spent on these activities was, till date,
almost equal to the minimum amount prescribed and it is hoped that as the F.Y. 2021-22
approaches its end, the total spending on CSR activities will certainly exceed the budgeted
figure.
Vishal Crockery Limited had decided to engage an external Section 8 company for
undertaking its CSR activities and such charitable company is not established by Vishal nor
it is established by the Central/State Government or by any entity established under an Act
of Parliament or a State Legislature.
13.1 Which of the following factors would have prompted Vishal Crockery Limited to mandatorily
form a Corporate Social Responsibility (CSR) Committee for the current financial year?
(a) The net profit had increased to ` 6.60 crores during F.Y. 2020-21 and it was more by `
1.80 crores in comparison to previous year’s net profit.
(b) The turnover was ` 750.00 crores during F.Y. 2020-21 which was an increase of more

than 20% as compared to the previous year.

(c) The net worth was ` 250.00 crores during F.Y. 2020-21 which when compared to the
previous year had registered an increase by more than 15%.
(d) The paid-up share capital was ` 8.00 crores during F.Y. 2020-21.
13.2 What is the time period within which, the Central Government shall dispose of the application
filed by the company for shifting of its registered office to Mumbai in Maharashtra?
(a) within thirty days (c) within sixty days
(b) within forty-five days (d) within ninety days
13.3 What is the minimum amount (in percentage) that Vishal Crockery Limited is required to
spend during the Financial Year 2021-22 on the CSR activities?
(a) 2% of the average net profits made during the two immediately preceding financial
years.
(b) 2% of the average net profits made during the three immediately preceding financial
years.
(c) 2.5% of the average net profits made during the two immediately preceding financial
years.
(d) 2.5% of the average net profits made during the three immediately preceding financial
years.
13.4 What should be the established track, Section 8 company should have in undertaking similar
programs or projects which Vishal Crockery Limited wants it to accomplish?
(a) Track record of minimum one year
(b) Track record of minimum two years
(c) Track record of minimum three years
(d) Track record of minimum four years
Answer Key
Question no. Answer
13.1 (a) The net profit had increased to ` 6.60 crores and it was
more
by ` 1.80 crores in comparison to previous year’s net profit.
13.2 (c) within sixty days
13.3 (b) 2% of the average net profits made during the three
immediately preceding financial years.
13.4 (c) Track record of minimum three years
14. Satyavaan Expert Packers and Movers Limited, a reliable and wellestablished company, was
incorporated on 20th September, 2014 with an aim to provide convenient and innovative
ways of moving customers’ household items, re-location of businesses and offices, shifting
of vehicles, etc. in the northern region. Their services have been professionally designed to
ensure maximum customers satisfaction. The company had been formed by the directors
Vijay Khanna, Pranav Chaturvedi, Vansh Khurana, Roopali Datta and Shikha Kumar whose

friendship had developed during their college days. By dint of hard work and their business
acumen, the promoters had successfully created a niche for themselves amid cut-throat
competition.
The company has a fleet of over 500 vehicles, 55 branches, several professionals and technical
and non-technical employees. Over a period of time, Satyavaan has become a trusted brand,
and prospective customers prefer to engage it, whenever they want to relocate their offices
or homes, since services are provided in a convenient and cost-effective manner.
The authorised capital of the company is ` 150.00 lakhs divided into 15,00,000 equity shares
of ` 10 each. At the time of incorporation, its paid-up capital was ` 1,00,00,000 and there
were 50 shareholders.
The registered office of the company is situated in Green Park, Kanpur.
With a view to provide world-class relocation and moving solutions throughout the country,
the directors decided to enlarge the capital base of the company. During the mid of the current
financial year, it offered remaining 5,00,000 shares to another 120 persons at a premium of `
10 per share on private placement basis. Among others, Ria, a freelance software consultant
and her younger sister Ruchi, a management consultant in Infratech Solutions Limited which
is wellknown company for its high export turnover, were also identified as the prospective
subscribers. Similar requests were also received from another twelve persons. Their requests
were given due consideration by the directors. All the identified persons who were offered
shares paid the required amount (including premium) as per the terms of the offer. The
allotment of the shares was made much before the statutory period.
Immediately after the aforesaid allotment of shares, the company rolled out its expansion
plan as envisaged earlier and utilised the funds so obtained for the requisite purpose.
However, the company is desirous of tapping more prospective investors by offering them
equity shares on private placement basis during the remaining part of the current financial
year. For this purpose, it was proposed to increase the authorised capital from the present
` 150.00 lakhs to ` 300.00 lakhs.
In addition to the further allotment of shares on private placement basis, the company is
also contemplating to raise deposits from the members. However, Vijay Khanna and Roopali
Datta are of the opinion that the company should consider raising of deposits only in the
next financial year since the funds already raised need to be properly utilized.
14.1 What is the maximum period statutorily allowed within which the allotment of such 5,00,000
shares must be made by the company:
(a) Shares must be allotted within 30 days of the receipt of application money towards
such shares.
(b) Shares must be allotted within 45 days of the receipt of application money towards
such shares.

(c) Shares must be allotted within 60 days of the receipt of application money towards
such shares.
(d) Shares must be allotted within 90 days of the receipt of application money towards
such shares.
14.2 In case, the company also contemplates to raise deposits from public in addition to its
members, which of the following option is applicable, apart from satisfying other conditions:
(a) In order to raise deposits from public besides members, the company should have net
worth of minimum ` 100 crores and a turnover of minimum ` 500 crores.
(b) In order to raise deposits from public besides members, the company should have net
worth of minimum ` 150 crores and a turnover of minimum ` 250 crores.
(c) In order to raise deposits from public besides members, the company should have net
worth of minimum ` 150 crores or a turnover of minimum ` 750 crores.
(d) In order to raise deposits from public besides members, the company should have net
worth of minimum ` 100 crores or a turnover of minimum ` 500 crores.
14.3 How many more such prospective shareholders can be invited by the company for investment
in the capital of the company under private placement, if such offer is not to be made to
qualified institutional buyers or to employees of the company under ESOP?
(a) The company can offer equity shares maximum up to the 30 prospective shareholders
in the remaining part of the current financial year.
(b) The company can offer equity shares maximum up to the 55 prospective shareholders
(c) The company can offer equity shares maximum up to the 80 prospective shareholders
(d) The company can offer equity shares maximum up to the 130 prospective shareholders
14.4 State the time period within which the company is required to refund the application money
to the subscribers if it had failed to allot the shares within the statutorily allowed period.
(a) The application money must be refunded within sixty days from the expiry of statutorily
period allowed within which the allotment of shares ought to have been made.
(b) The application money must be refunded within fortyfive days from the expiry of
statutorily period allowed within which the allotment of shares ought to have been
made.
(c) The application money must be refunded within thirty days from the expiry of
statutorily period allowed within which the allotment of shares ought to have been
made.
(d) The application money must be refunded within fifteen days from the expiry of
statutorily allowed period within which the allotment of shares ought to have been
made.

Answer Key
Question no. Answer
14.1 (c) Shares must be allotted within 60 days of the receipt of
application money towards such shares.
14.2 (d) In order to raise deposits from public besides members, the
company should have net worth of minimum ` 100 crores or a
turnover of minimum ` 500 crores.
14.3 (c) The company can offer equity shares maximum up to the 80
prospective shareholders in the remaining part of the current
financial year.
14.4 (d) The application money must be refunded within fifteen days
from the expiry of statutorily allowed period within which the '
allotment of shares ought to have been made.
15. Ratnakar Cement Manufacturers and Traders Limited (RCMTL) having its registered office at
Connaught Place, New Delhi was registered with an Authorised Share Capital of ` 5,00,00,000
divided into 50,00,000 shares of ` 10 each. As on date, its paid-up share capital is ` 4,00,00,000
(40,00,000 shares of ` 10 each) and its securities premium account has a balance of ` 40,00,000.
Its cementmanufacturing plants are located at Faridabad (Haryana), Raebareli and Haldwani
(Uttar Pradesh), Rudrapur (Uttarakhand) and Chanderia (Rajasthan). The company which
produces cement under the brand name ‘Ratnakar Cement’, has expertise in manufacturing
53 Grade Ordinary Portland Cement that is used mainly in RCC and pre-stressed concrete
of higher grades; but in case of plant located at Faridabad, the company also additionally
manufactures Portland Pozzolana Cement (PPC) and White Cement. Having higher degree of
fineness and corrosion-resistant quality, PPC, manufactured by the company, is responsible
for making the concrete more denser. Besides, due to its distinct impermeable excellence,
PPC is preferred over ordinary cement for mass concreting work and therefore, RCMTL
has a sizeable market to cater. The integrated network of traders pan India which RCMTL
commands helps it in achieving its annual sales targets almost every year.
Except Faridabad cement plant which is of recent origin having stateof-the-art machinery,
all other plants were taken over by the RCMTL at different time intervals from other cement
manufacturers; and now they either need renovation or replacement. Further, on the basis
of market survey, RCMTL has gathered data which indicates that there is heavy demand
for Sulphate Resisting Portland Cement (SRC) which is mainly used for foundation work,
construction of basements and underground structures, sewage and water treatment plants,
etc. where due to water or soil, ‘sulphate attack’ is more than anticipated.
Thus, in addition to catering to the increasing demand for PPC, RCMTL is also desirous of
manufacturing Sulphate Resisting Portland Cement (SRC). In view of these developments,

the company has plans for upgrading its Rudrapur cement manufacturing plant by installing
an ultra-modern unit so that it can also manufacture SRC and compete effectively with its
competitors by providing high-quality cement across the whole range of different qualities
currently available in the markets both in India and abroad. The banking needs of RCMTL are
mainly fulfilled by the National Commercial Bank Limited. It can finance fifty percent of the
cost of plant from its own resources but the remaining fifty percent of cost can be financed
only by availing loan from National Commercial Bank Limited with whom it is banking since
its incorporation.
The loan proposal prepared by RCMTL for part financing the cost of ultra-modern cement
plant against the security of factory land and building situated at Rudrapur as well as yet
to be purchased ultramodern plant, with a view to avail loan from National Commercial
Bank Limited (NCBL) stands sanctioned by the Head Office of NCBL; and the sanction has
been conveyed by the Connaught Place branch of NCBL to RCMTL.
15.1 Which kind of charge shall be created by the NCBL on the assets of the company to be
secured?
(a) Fixed Charge
(b) Floating Charge
(c) Either Fixed or Floating Charge as desired by RCMTL
(d) Partly fixed and partly floating charge
15.2 Which Registrar of Companies needs to be approached for the registration of charge created
in favour of NCBL concerning the securities offered by RCMTL?
(a) ROC of Uttar Pradesh and Uttarakhand as the securities are located at Rudrapur
(Uttarakhand)
(b) ROC of Delhi and Haryana since RCMTL has registered office at Connaught Place, New
Delhi
(c) As per the discretion of RCMTL, any of the ROCs can be approached
(d) ROC of West Bengal since the Head Office of NCBL which has sanctioned loan is
situated at Kolkata
15.3 What is the time limit for within which this charge must be registered with the respective
ROC?
(a) Within 10 days of creation of charge
(b) Within 15 days of creation of charge
(c) Within 30 days of creation of charge
(d) Within 60 days of creation of charge
15.4 Advise the company, in next how many days, the charge can be permitted to be registered
assuming that the charge was created after 02-11-2018 if due to some unintended mistake,
RCMTL could not register the charge created on its fixed assets in favour of NCBL within the

statutory period primarily allowed?

(a) Within next 10 days (c) Within next 20 days
(b) Within next 15 days (d) Within next 30 days
Answer Key
Question no. Answer
15.1 (a) Fixed Charge
15.2 (b) ROC of Delhi and Haryana since RCMTL has registered office at
Connaught Place, New Delhi
15.3 (c) Within 30 days of creation of charge
15.4 (d) Within next 30 days
16. Green Pepper Films and Media Limited (GPFML), a major and wellestablished entertainment
company, is engaged in the activities relating to production of TV programmes, distribution
of motion pictures, etc. It has its own privately-owned studio facility which is used to
produce films either by the company or by other players belonging to film industry. The
company was formed by Sourabh Sharma, Vaishnavi Valsara, Hiten Chaudhary and Ritwik
Chopra - a team of core media professionals as an integrated media house in 2010; the
quartet is also the directors on the board of the company.
Later on, Vaishnavi transferred 1,00,000 equity shares held by her to Vasant, her cousin, who
is based at London.
GPFML has become one of the leading TV production houses in the country with the passage
of time. The authorized capital of the company is ` 5.00 crores divided into 4,00,00,000
equity shares of Re. 1 each and 1,00,000 8.5% non-cumulative preference shares of ` 100
each. Initially, the company issued 75% of its equity shares which were fully subscribed.
Around 70% of equity shares issued so far are held by the four promoters and their relatives.
In the year 2021, the company issued 50,000 preference shares of ` 100 each to its existing
shareholders by augmenting its authorised share capital, on which, as per the terms which
were already approved by the shareholders, 8.5% p.a. dividend was payable when declared.
It may be noted that the company had also issued the remaining 1,00,00,000 equity shares
with a view to raise funds for TV software development For the financial year, 2021-22, the
Board of Directors proposed to declare a dividend of ` 3 per equity share. It was ensured
that only the residual profits remaining after making payment of dividend to the preference
shareholders at 8.5% were to be utilised for making payment of dividend to the equity
shareholders. As the residual profits were sufficient to meet the liability arising on payment
of dividend of ` 3 per equity share, the proposed dividend was approved by the shareholders
at the Annual General Meeting held on 3rd August, 2022.
Accordingly, the requisite amount on account of declared dividend was transferred to a
special bank account opened with the company’s bankers. However, dividend amounting to
` 15,600 payable to certain equity shareholders remained unclaimed even after the expiry of
statutory period within which dividend was required to be paid.

Accordingly, the directors took steps to transfer the unclaimed amount to the Unpaid
Dividend Account.
16.1 What is the maximum time within which the amount of declared dividend must be deposited
in a separate bank account?
(a) The declared dividend needs to be deposited maximum within three days from the
date of declaration.
(b) The declared dividend needs to be deposited maximum within five days from the date
of declaration.
(c) The declared dividend needs to be deposited maximum within seven days from the
date of declaration.
(d) The declared dividend needs to be deposited maximum within ten days from the date
of declaration.
16.2 From the given four options choose the one which would not have found place in the
resolution that was passed for authorizing the issue of preference shares.
(a) The issue of preference shares is non-convertible.
(b) The issue of preference shares is convertible.
(c) The issue of preference shares is redeemable.
(d) The issue of preference shares is irredeemable.
16.3 What is the time limit within which the unclaimed dividend must be transferred to a special
account opened with a scheduled bank for this purpose?
(a) The unpaid or unclaimed dividend must be transferred to a special account within
three days from the expiry of the statutory period within which it was to be paid or
claimed.
(b) The unpaid or unclaimed dividend must be transferred to a special account within
five days from the expiry of the statutory period within which it was to be paid or
claimed.
(c) The unpaid or unclaimed dividend must be transferred to a special account within
seven days from the expiry of the statutory period within which it was to be paid or
claimed.
(d) The unpaid or unclaimed dividend must be transferred to a special account within
ten days from the expiry of the statutory period within which it was to be paid or
claimed.
16.4 As regards the redemption of the preference shares what is the maximum term, the company
could have prescribed, so as to use the proceeds for the maximum possible period, if such
issue made was not for funding any infrastructure projects?
(a) The company would have prescribed maximum twentyfive years from the date of
issue within which the preference shares were required to be redeemed.

(b) The company would have prescribed maximum twenty years from the date of issue
within which the preference shares were required to be redeemed.
(c) The company would have prescribed maximum fifteen years from the date of issue
within which the preference shares were required to be redeemed.
(d) The company would not have prescribed any term if the company wanted the preference
shares to be irredeemable so as to use the proceeds forever.
Answer Key
Question no. Answer
16.1 (b) The declared dividend needs to be deposited maximum within
five days from the date of declaration.
16.2 (d) The issue of preference shares is irredeemable.
16.3 (c) The unpaid or unclaimed dividend must be transferred to a
special account within seven days from the expiry of the
statutory period within which it was to be paid or claimed.
16.4 (b) The company would have prescribed maximum twenty years
from the date of issue within which the preference shares were
required to be redeemed.
17. ABZ Limited is engaged in generating power supply in the state of Karnataka. Forty per cent
of the equity capital of ABZ Limited is held by the Central Government; twenty per cent by
State Government and the balance forty percent by other public shareholders. The market
price of ABZ Limited is ` 150.
ABZ is having the power to appoint majority of the Board of Directors of North South
Private Limited engaged in manufacturing cosmetics for young India. Along with this, ABZ
has control of 46% of voting power of East West limited, a company engaged in providing
logistics solutions.
East West limited holds 56% shares in WENS Ltd., and WENS Ltd. is having capital structure
as follows:
(figures in `)
ABZ Net worth -550 crore Turnover - 1500 crore -
East West limited Paid up Capital – 20 Bank borrowings -
crore from FIs– 15 crore
North South Pvt Ltd Paid up capital – 15 Turnover – 200 crore bank borrowings
crore from FIs– 55 crore
The promoters of WENS Ltd. wanted to expand business across India and globally as well,
for which it needs to have funds and they are thinking of getting the shares of the company
- listed on NSE by inviting the public for subscription of its shares. Finally, they issued

prospectus as per section 32 of the Act on 30th January, 2021 in which details regarding price
and quantity of shares was not given. As they were not able to decide upon the exact price,
they proceeded by giving floor price along with a range, within which bids can move and let
the subscribers to bid on the quantity and price. After the end of bidding process, price was
determined and final prospectus was issued. Company WENS ltd successfully raised capital.
After round about a year of raising capital, the capital structure of company was as follows:
Particulars `
Unsecured loan 15 lakhs
Paid up capital 350 lakhs
Depreciation provision 5 lakhs
Securities premium 8 lakhs
Capital reserve 10 lakhs
Free reserve 12 lakhs
Promoters of WENS Ltd. have decided to buy back their securities u/s 68(1) of Companies Act
to consolidate their stake in company. They obtained necessary authorization and approval
and followed prescribed procedure.
Love & Co., a sole proprietor audit firm, is the statutory auditor of North South Pvt. Ltd. It
has been auditing the company since F.Y. 2017-18.
17.1 Which of the following companies will be defined as a Government company u/s 2(45) of the
Companies Act, 2013?
(a) ABZ and North South Pvt. Ltd. (c) ABZ and WENS Limited
(b) ABZ and East West Limited (d) North South Pvt. Ltd. and WENS Ltd.
17.2 How is ABZ Limited related with North South Pvt. Ltd. and East West Ltd.?
(a) Holding Company and Associate
(b) Subsidiary Company and Associate
(c) Associate Company and Joint Venture
(d) Holding Company and Joint Venture
17.3 Whether the term of office of Love & Co. has expired, after conducting the audit for F.Y.
2021-22? If yes, on what criteria can we conclude that its term has expired as per Section
139(2) of Companies Act?
(a) Borrowings from Financial Institutions is ` 55 crore of North South Pvt. Ltd. and
rotation of individual auditor is compulsory after 5 years
(b) Turnover is ` 200 crore or more and rotation of individual auditor is compulsory after
5 years
(c) Paid up share capital is ` 15 crore and rotation of individual auditor is compulsory
after 5 years
(d) North South Pvt ltd is subsidiary of ABZ Ltd. and rotation of individual auditor is

compulsory after 5 years.

17.4 What is the maximum amount of buy-back, WENS Ltd. can make?
(a) 28 lakhs (c) 30 lakhs
(b) 20 lakhs (d) 12 lakhs
17.5 Which type of prospectus has been issued by WENS Ltd. to raise capital from market
(a) Shelf Prospectus (c) Red Herring Prospectus

(b) Abridged Prospectus (d) Deemed Prospectus
Answer Key
Question no. Answer
17.1 (a) ABZ and North South Pvt. Ltd.
17.2 (a) Holding Company and Associate
17.3 (a) Borrowings from Financial Institutions is ` 55 crore of North
South Pvt. Ltd. and rotation of individual auditor is compulsory
after 5 years
17.4 (a) 28 lacs
17.5 (c) Red Herring Prospectus
18. Golden Oak Plaza Limited (GOPL) is a public company, dealing in designer items made
from Oak wood. The objects clause in the memorandum empowers the company to give
guarantee in respect of loans made to subsidiary or associate companies, but the Articles of
Association has not delegated this power to the board of directors and reserves the power
with members. The Board of Directors of GOPL passed board resolution to provide guarantee
for one of the associate companies which was provided within the limits prescribed by
section 186(2) of the Companies Act, 2013. However, such an act of the Board was not
ratified by the members of the company in the subsequent meeting held.
GOPL is in need of capital for further expansion of business. The Board of directors of GOPL
is looking at both the options of public issue as well as private placement. Mr. Vivek Partap
who is compliance officer of the company informed Mr. Bhavey Thakur, CFO, about the
limitation associated with private placement, especially ceiling limit on the number of
persons to whom securities can be offered. Office of Mr. Thakur has lined up the names of
120 investors to whom securities can be issued if private placement takes place.
After hours of discussion and deliberation, GOPL decided to float capital through capital
market and entered in process of raising of further capital from capital market by issue of
prospectus. Prospectus is registered with the Registrar of Companies (ROC) on 10th January
2022. GOPL hired Shark Broking Solution as underwriting agent.
Underwriting commission was agreed at rate of 4%. Mr. Alok invested in securities issued
by the company, and he was having knowledge about the internal irregularity within the
company with respect to the process regarding title of securities but he remained silent.

Later when the company denied making repayment to him due to defect in title, Mr. Alok
sued the company quoting doctrine of indoor management as defence; but company denied
his claim.
18.1 What is the maximum number of persons to whom an offer may be made under Private
placement?
(a) Maximum of two hundred persons in a particular financial year, including qualified
institutional buyers and employees of the company being offered securities under a
scheme of employees stock option;
(b) Maximum of two hundred persons, in a particular financial year excluding qualified
institutional buyers and employees of the company being offered securities under a
scheme of employee’s stock option;
(c) Maximum of two hundred persons, including qualified institutional buyers and
employees of the company being offered securities under a scheme of employees
stock option; inclusive of any such placement during previous years also;
(d) Maximum of two hundred persons, excluding qualified institutional buyers and
employees of the company being offered securities under a scheme of employees
stock option; inclusive of any such placement during previous years also.
18.2 Assess the validity of board resolution by board of directors of GOPL to undertake guarantee
for one of the associate companies.
(a) Valid (c) Voidable
(b) Void (d) Void-ab-initio
18.3 Is Mr. Alok eligible to take defence of `Doctrine of Indoor Management’
(a) Yes, because company deny in making payment to him
(b) Yes, defence of `Doctrine of Indoor Management’ is unconditional and without
exception
(c) No, rule of constructive notice is absolute and doctrine of indoor management can’t
be raised in any circumstances
(d) No, because `Doctrine of Indoor Management’ has exception of knowledge of
irregularity.
18.4 To keep prospectus valid, within how many days GOPL, is supposed to issue the registered
prospectus?
(a) Within 30 days from date of registration with ROC
(b) Within 60 days from date of registration with ROC
(c) Within 90 days from date of registration with ROC
(d) Within 120 days from date of registration with ROC
18.5 Which of following statement is legally valid in regard to underwriting commission offered
by GOPL if the articles of company are silent relating to such rate of commission?

(a) Maximum underwriting commission can be 5% in case of shares

(b) Maximum underwriting commission can be 2.5% in case of shares
(c) There is no maximum ceiling limit on underwriting commission in case share
(d) Underwriter cannot appoint sub-underwriters
Answer Key
Question no. Answer
18.1 (b) Maximum of two hundred persons, in a particular financial year
excluding qualified institutional buyers and employees of the
company being offered securities under a scheme of employees
stock option.
18.2 (d) Void-ab-initio
18.3 (c) No, rule of constructive notice is absolute and doctrine of
indoor management can’t be raised in any circumstances
18.4 (c) Within 90 days from date of registration with ROC
18.5 (a) Maximum underwriting commission can be 5% in case of shares
19. Sirmaur Ispat Limited (SIL) deals in varieties of metals and products manufactured there
from. Since the company is running into losses, SIL has decided to restructure its capital.
In order to keep the morale of the shareholders high, SIL decided to declare dividend out of
reserves.
Since there is a limit on issue of dividend, out of past reserves, company decided to issue
fully paid bonus shares. The CFO has asked you, the Finance Manager to study and report on
the legal aspects involved in issue of bonus shares.
Company borrowed monies, and the charge was created on 02.11.2021, against the land and
building of the manufacturing unit of SIL. SIL failed to register the charge till 01.12.2021.
SIL a wellgoverned company which wishes to ensure favourable relations with investors
through transparent reporting. Annual report of SIL contains details which are beyond the
legal requirements. The latest AGM of SIL was conducted on 30th August 2021.
While finalizing the minutes of meeting of AGM, SIL’s chairperson wishes to remove the
statement made by retiring director stating that the same is defamatory in nature to the
company. One of the existing independent directors raises the question on exclusion of said
matter and requested the company secretary to redraft the minutes containing said matter.
19.1 What is the date by which SIL has to file its Annual Return for the year ended 31st March,
2021?
(a) 14th September, 2021 (c) 29th October, 2021
(b) 29th September, 2021 (d) 28th November, 2021
19.2 SIL cannot issue fully paid up bonus share to its members out of:-
(a) Free Reserves

(b) Securities Premium Account

(c) Capital Redemption Reserve Account
(d) Reserves created by the revaluation of assets.
19.3 Which of the following is not a condition, for issue of fully paid bonus shares?
(a) Should be authorized by AOA
(b) Can only be issued against fully paid shares
(c) Should be authorized by a special resolution
(d) Bonus Shares shall not be issued in lieu of dividend
19.4 Regarding exclusion of certain matter from minutes of AGM of SIL; which of following
statement is correct?
(a) All the matters need to be incorporated in minutes
(b) It is chairperson’s exclusive right to include or exclude certain matters from minutes
of the AGM
(c) Chairperson can only express his opinion that which matter should be excluded from
minutes, but his decision is not binding
(d) Since independent director has raised the question on exclusion of certain matter
hence minutes need to be redrafted.
Answer Key
Question no. Answer
19.1 (c) 29th October, 2021
19.2 (d) Reserves created by the revaluation of assets.
19.3 (c) Should be authorized by a special resolution
19.4 (b) It is chairperson’s exclusive right to include or exclude certain
matters from minutes of the AGM
20. Mr. Purshottam Prasad, a business graduate from a leading B-School, has been running a
chain of restaurants as a sole proprietor concern.
The business is based in Chennai. Mr. Prasad, in order to develop the business; decided to
corporatize his business but he is concerned with dilution of his control over business
decisions.
Mr. Prasad, during a journey met Mr. Chinmay Dass; one of his old school friends. Mr. Chinmay
Das is presently working in one of the leading corporate advisory firms. Mr. Prasad seeks
advice from Mr. Dass, regarding conversion of sole proprietorship concern to a company and
also stated his intention to keep the entire control in his hands of the company. Mr. Dass
informed Mr. Prasad, about a new type of company, called One Person Company (OPC), which
can be formed under Companies Act, 2013. Mr. Dass quoted Section 2(62), which defines ‘one
person company’ as a company which has only one person as a member.
Mr. Prasad, felt OPC is correct form of business for him, hence he promoted an OPC, ‘Casa
Hangout (OPC) Private Limited’, on 14th September, 2021, by converting his sole proprietary
business into a corporate form and became the sole member. Mr. Prasad, appointed his

younger son, Mr. Vijay, who was 21 year old then, as nominee to the OPC. Mr. Anand who is
a famous food blogger and old friend of Mr. Prasad was appointed as director of OPC, and Mr.
Prasad, himself also became director of the company.
Mr. Vijay is a professional photographer, and went abroad for a certification course on 23rd
October 2021. He came back on 1st of March 2022. He established a photo-studio as an OPC
called ‘Best Click (OPC) Private Limited’ (one Person Company) on 20th March 2022, in which
Mr. Raj is nominee and he became sole member.
Mr. Prasad met an accident on 25th March 2022, in which he lost his life. Nomination clause
was invoked, as a result of which Mr. Vijay had to take charge over ‘Casa Hangout (OPC)
Private Limited’ as its sole member with immediate effect. On 30th March 2022, Mr. Karan
was appointed as a new nominee to ‘Casa Hangout (OPC) Private Limited’, who gave his
written consent on 31st March 2022. Mr. Karan who is an investment banker by profession,
is of the opinion that ‘Casa Hangout (OPC) Private Limited’ needs to amend its object clause
and add ‘carry out investment in securities of any body corporate’ as one of its objects.
The financial statements of ‘Casa Hangout (OPC) Private Limited’ for the financial year
ended on 31st March 2022, did not contain cash flow statements signed by Mr. Anand who
was left as only director after the death of Mr. Prasad.
20.1 Which of the following persons is eligible to be nominee of an OPC?
(a) Any natural person excluding minor
(b) Any legal person excluding minor
(c) Any natural person, who is resident of India; but excluding minor
(d) Any natural person, who is a citizen of India; but excluding minor
20.2 Mr. Karan, if he wishes to withdraw his consent as nominee, can do so by giving a written
notice to:-
(a) Director of OPC and to sole member of company
(b) Director of OPC and to Registrar of companies
(c) Sole member of company and to OPC
(d) Sole member of company and to Registrar of companies
20.3 In case of change of Nominee in Casa Hangout (OPC) Private Limited, a notice shall be given
to ROC by OPC; in form number INC-4 along with written consent of Nominee in form INC-3
from Mr. Karan; within
(a) 30 days from date of appointment of Mr. Karan
(b) 30 days of receipt of the notice of withdrawal (because he will become member) of
consent as nominee by Mr. Vijay
(c) 30 days from date of intimation of written consent of Mr. Karan
(d) 15 days from date of intimation of written consent of Mr. Karan
20.4 A person, other than minor; at specific point of time;

(a) Can be a member in any number of OPCs but nominee in one OPC
(b) Can be a member in one OPC and nominee in any number of OPCs
(c) Can be a member in one OPC and nominee in another one OPC
(d) Can be a member and nominee both in any number of OPCs
20.5 Which of following statement is correct, with respect to financial Statements of ‘Casa
Hangout (OPC) Private Limited’?
(a) Must be signed by one director
(b) Must be signed by at-least two directors
(c) Must contain cash flow statement as part of financial statements
20.6 With reference to opinion of Mr. Shankar to add ‘carry out investment in securities of body
corporate’ object, ‘Casa Hangout (OPC) Private Limited’, choose the correct option:-
(a) Cannot carry out non-banking financial investment activities & investment in
securities of body corporate’
(b) Cannot carry out non-banking financial investment, but can invest in securities of
body corporate’
(c) Can carry-out non-banking financial investment & invest in securities of body
corporate’
Answer Key
Question no. Answer
20.1 (d) Any natural person, who is a citizen of India; but excluding
minor
20.2 (c) Sole member of company and to OPC
20.3 (b) 30 days of receipt of the notice of withdrawal (because he will
become member) of consent as nominee by Mr. Vijay.
20.4 (c) Can be member in one OPC and nominee in another one OPC
20.5 (a) Must be signed by one director
20.6 (a) Cannot carry out non-banking financial investment activities
& investment in securities of body corporate’
21. Michael Mascaren is the Chief Finance Officer (CFO) and Sachin Bhat is the Company Secretary
(CS) of Jitendra Iron Works Private Ltd. (JIWPL), respectively, located in Manipal city of
Karnataka. JIWPL is an integrated set up of foundries and machine shops that add value by
machining more than 75% of the castings manufactured to fully finished condition. JIWPL
is one of the largest jobbing foundries producing grey iron castings required for automobile,
farm equipment and diesel engines sectors. JIWPL serves customers globally. The turnover
of JIWPL is about ` 600 crores, including export turnover of about ` 250 crores.
During the year 2021, JIWPL planned expansion to enhance its production capacity to
meet the increasing demand from its customers, by importing fully automatic plant and

equipments from Germany for the unit at Manipal and also by acquiring a machining unit
at Nairobi, Kenya. The means of finance of the expansion project were as follows:-
(a) JIWPL received an amount of ` 25 crores from Malini Shetty, wife of one of the promoter
directors of the company, Mahesh Shetty. Mahesh Shetty wanted Sachin Bhat to brief
him regarding any compliance needed from the perspective of acceptance of such
deposit amount.
(b) The Board also approached the main banker of the company viz., Bank of Baroda. The
Bank after proper credit analysis, sanctioned:-
1. A term loan of ` 50 crores to JIWPL, repayable in 6 years, for importing a fully automatic
plant and equipment from Germany for the expansion project for the unit in Manipal
against the security of the assets imported, along with the land and building situated
in Manipal. Also sanctioned were interchangeable non funded limits for foreign letters
of credit and bank guarantee totalling to ` 25 crores against the security of liquid
assets in the form of fixed deposits and mutual funds.
2. Along with the aforesaid term loan, JIWPL was also sanctioned an additional amount
of ` 50 crores for meeting the working capital needs of the expansion project, which
included interchangeable limits of cash credit, foreign and inland bills for negotiation
and acceptance. The security cover was floating charge on the book debts, inventory
and other current assets involved in the expansion project of JIWPL in Manipal.
3. Further, a term loan for ` 75 crores, repayable in 6 years was also sanctioned for
acquisition of a machining plant along with land and building at Nairobi, Kenya for
its subsidiary company named - Jitendra Machining Pvt Ltd. (JMPL). The said loan was
disbursed through the overseas branch of Bank of Baroda at Nairobi specifically to
meet the continuous demand of a major customer in Kenya with an eye to capture
the African market also.
The loan given was against the security of properties at Nairobi.
The CFO and the CS together coordinated with the legal department of the Bank on
procedures relating to creation of security and registration of charges.
The registered office of JIWPL is located in Manipal. Out of the company’s 180 members
entered in the register of members (ROM), 20 members, reside in Mangaluru, a nearby
city. These members requested the company for some reasons to maintain the ROM
in the company’s liaison office in Mangaluru, instead of Manipal henceforth.
The board of JIWPL approved allotment of shares to two new members on 1.1.2022
and their names are to be entered into the Register of Members by the Secretarial
Department.
M/S Suresh Poojary & Co. are the statutory auditors of the company appointed at the
Annual General Meeting of the company during the year 2020 to hold the office from
the conclusion of that meeting till the conclusion of the sixth meeting thereafter.

However, in the annual general meeting held during the year 2021, no ratification
resolution for the appointment of the auditor was passed for the F.Y. 2021-22.
21.1 In connection with the loan from Malini Shetty, the CS has to ensure -:
(a) That the particulars of amount received are immediately entered in the register of
deposits maintained in such manner and in such format as prescribed;
(b) That a circular is immediately issued to the members of the company with a statement
of deposits accepted as on date with the names of each depositor, amount(s) received
as on date, the due date(s) and the liability(ies) on the due date(s) in respect of each
depositor
(c) That a declaration is obtained to the effect that the amount given is not sourced from
borrowed funds or by accepting loans or deposits from others and disclose the details
of money so accepted in the Board’s Report;
(d) That the particulars of deposits received are filed within 30 days from the date of its
receipt with the Registrar.
21.2 In connection with the loan disbursed in Kenya, while creating a charge in India, where the
instrument relates solely to the properties at Kenya, the copy can be verified by a Certificate
issued-
(a) under the hand of some person other than the company who is interested in the
mortgage or charge;
(b) under the hand of some person other than the company who shall not be interested
in the mortgage or charge
(c) Only under the hand of one of the directors of JIWPL
(d) Only under the hand of a practicing Company Secretary or a practicing Chartered
Accountant
21.3 In connection with maintenance of the Register of Members (ROM) at the Liaison office at
Mangaluru instead of Manipal, state which of the following statements is correct:
(a) The ROM shall be maintained only at the registered office in Manipal and maintaining
in a place other than the registered office is not permitted under the Companies Act
2013 and the relevant Rules there under.
(b) The ROM can be maintained in Mangaluru by passing a special resolution in a general
meeting.
(c) The board of directors by passing a board resolution at one of its meetings, may direct
the company secretary to maintain the ROM in Mangaluru.
(d) The ROM can be maintained at Mangaluru after passing a special resolution in a
general Meeting provided more than 1/3rd of the members, whose names are entered
in the ROM request for such a change.

21.4 The board of JIWPL approved allotment of shares to two (2) new members on 1.1.2022 and
their names are to be entered into the ROM by the Secretarial Department.
(a) Entries in the ROM shall be made within 30 days of allotment of Shares, on Board
approval
(b) Entries in the ROM shall be made immediately on allotment of shares, on Board
approval.
(c) Entries in the ROM shall be made within 7 days of the date of the Board approving
allotment.
(d) Entries in the ROM shall be made within 10 days of the date of the Board approving
allotment.
21.5 M/S Suresh Poojary & Co. are the statutory auditors of the company appointed during the
annual general meeting of the company during the year 2021 to hold the office from the
conclusion of that meeting till the conclusion of the sixth meeting thereafter. However,
during the annual general meeting of the year 2020, no ratification resolution for the
appointment of the auditor was passed
(a) JIWPL should have placed the matter relating to appointment of statutory auditor in
the AGM during 2021 by way of an ordinary resolution.
(b) JIWPL should have placed the matter relating to appointment of statutory auditor in
the AGM during 2021 by way of a special resolution.
(c) The statutory auditors appointed in the AGM during 2020 shall be deemed to have
vacated the office, if no ratification by the members at every annual general meeting
thereafter.
(d) There is no need of ratification and the statutory auditors can continue to hold office
after the conclusion of the AGM held during the year 2021 also.
Answer Key
Question no. Answer
21.1 (c) That a declaration is obtained to the effect that the amount
given is not sourced from borrowed funds or by accepting loans
or deposits from others and disclose the details in the Board’s
Report
21.2 (a) under the hand of some person other than the company who is
interested in the mortgage or charge;
21.3 (b) The ROM can be maintained in Mangaluru by passing a special
resolution in a general meeting.
21.4 (c) Entries in the ROM shall be made within 7 days of the date of
the Board approving allotment
21.5 (d) There is no need of ratification and the statutory auditors can
continue to hold office after the conclusion of the AGM held
during the year 2021 also.

22. The Board of Directors of LESCO Pharmaceuticals Limited (hereinafter referred to as

“company”) were meeting again in the month of May 2021 for the discussion of two important
agenda which had a direct relation to the ensuing Annual General Meeting scheduled on 30th
September 2021. The first agenda was related to the authentication of financial statements
and the second one was in connection with dividend. Although the first item in the agenda
did not take much time and necessary Board resolution was passed, the second agenda was
a matter of concern for the directors.
Ms. Sunita, one of the directors proposed that since the company had not made any profits
during the year, it would not be appropriate to declare any dividend for the financial year
2020-21. However, all other directors felt that last year’s rate of dividend of 5% should be
maintained and the same should at least be paid this year to keep the shareholders happy.
Ms. Sunita again objected by saying that the legal provisions as envisaged under Section 123
of the Companies Act, 2013 clearly states that dividend by a company for any financial year
should be paid or declared out of the profits of the company of that year and since there
was no profit there was no requirement to pay SUCH dividend. She strongly contended that
paying dividend was a matter of financial choice by the Board of Directors and accordingly,
the board should take an informed decision. The priority for the Board is to ensure that cash
flow is maintained first and then the “happiness” of the shareholders be considered.
Another director, Mr. Robinder suggested that the company had made a substantial gain on
revaluation of assets and if that would be considered then there would be sufficient profits
for declaration of dividends out of such gain.
Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that
perhaps there is a provision in the Companies Act, 2013 relating to payment of dividend
in the absence of profits and that the Company Secretary, Ms. Ameeka should work out
the possibilities and all legal aspects connected therewith and then call for another Board
Meeting for finalising the payment of dividend. The meeting then ended with a vote of
thanks to the Chair.
22.1 Which of the following is the correct statement relating to the source for payment of
dividend by the company?
(a) Profits of the Company of that year only arrived at after providing for depreciation.
(b) Profits of the Company of that year arrived at after providing for depreciation or for
any previous year or years arrived at after providing for depreciation or through any
reserves available.
(c) Profits of the Company of that year arrived at after providing for depreciation or for
any previous year or years arrived at after providing for depreciation and remaining
undistributed i.e. free reserves.
(d) Profits of the Company of that year or previous year(s) but not necessary to provide

for depreciation.
22.2 With reference to claim made by Ms. Sunita relating to source of payment of dividend,
whether you agree with such contention made by her?
(a) Completely agree with the contention of Ms. Sunita that only profits are the source
for payment of Dividend.
(b) Partly agree with Ms. Sunita but apart from Profits, a company can pay dividend out
of money provided by the Central or State Government in pursuance of the guarantee
given by them.
(c) Partly agree with Ms. Sunita that apart from profits (either current year or previous
year), even in the event of inadequacy or absence of profits, a company may declare
dividend out of free reserves, subject to fulfilling certain conditions.
(d) Partly agree with Ms. Sunita that company can pay dividends not only out of profits
but also out of money provided by Central Government or State Government in
pursuance of the guarantee given by them or out of money available in free reserves,
and in each case subject to fulfilment of conditions as prescribed.
22.3 Which of the option is correct with regard to the proposal made by Mr. Robinder?
(a) Gain made by a company in form of revaluation of assets is definitely available for
payment of Dividend.
(b) Gain made by a company in form of revaluation of assets is available only upon
satisfaction of terms and conditions prescribed.
(c) Gains made by a company in form of revaluation of assets in not available for
computing profits for declaration of dividends.
(d) Gains made by a company in form of revaluation of assets which are only buildings
are not available and in all other assets they are available.
22.4 Which of the following is correct with respect to the situation as referred by Mr. Ramesh to
Ms. Ameeka assuming other conditions, if any, for the same would also be satisfied?
(a) The rate of dividend declared shall not exceed the average of the rates at which
dividend was declared by it in the three years immediately preceding that year.
(b) The rate of dividend declared shall not exceed the average of the rates at which
dividend was declared by it in the two years immediately preceding that year.
(c) The rate of dividend declared shall be the average of the rates at which dividend was
declared by it in the five years immediately preceding that year.
(d) The rate of dividend declared shall not exceed the rate at which dividend was declared
by it in any of the three years immediately preceding that year.
22.5 Which of the following is correct with respect to the situation as referred by Mr. Ramesh to
Ms. Ameeka assuming other conditions, if any, for the same would also be satisfied?
(a) The amount that can be drawn from such accumulated profits shall not exceed one
fifth of the sum of its paidup share capital and free reserves as appearing in the latest

audited financial statement.

(b) The amount that can be drawn from such accumulated profits shall not exceed one
tenth of the sum of its paidup share capital and free reserves as appearing in the
latest audited financial statement.
(c) The amount that can be drawn from such accumulated profits shall not exceed
one tenth of its paid-up share capital as appearing in the latest audited financial
statement.
(d) The amount that can be drawn from such accumulated profits shall not exceed one
tenth of the average of its paid-up share capital and free reserves as appearing in the
latest three years audited financial statement.
Answer Key
Question no. Answer
22.1 (c) Profits of the Company of that year or for any previous year or
years after providing for depreciation and remaining
undistributed i.e. free reserves.
22.2 (d) Partly agree with Ms. Sunita that company can pay dividends
not only out of profits but also out of money provided by Central
Government or State Government in pursuance of the guarantee
given by them or out of money available in free reserves, and
in each case subject to fulfilment to conditions prescribed.
22.3 (c) Gains made by a company in form of revaluation of assets in
not available for computing profits for declaration of dividends.
22.4 (a) The rate of dividend declared shall not exceed the average of
the rates at which dividend was declared by it in the three
years immediately preceding that year.
22.5 (b) The amount that can be drawn from such accumulated profits
shall not exceed one tenth of the sum of its paid-up share
capital and free reserves as appearing in the latest audited
financial statement.
23. The Board of Directors of Dr. Mahindra Laboratories Limited (hereinafter referred to as the
“company”) were having their Board meeting on 9th July 2021. Despite the Covid-19 pandemic,
the company results for the first quarter (hereinafter referred to as “Q-1”) showed some
great numbers. The maximum turnover was on account of sale of sanitisers, masks and
other related products. All the directors felt jubilant about the results particularly at a
time when majority of the companies were struggling to even pay salaries and meet their
operating costs. One of the directors, Mr. Sanjay, was looking at the way the share price of
the company was trading. It showed an upward trend despite stock prices falling for many
reputed companies. The closing share price of the Company was ` 217.80. It was evident
that the capital markets were responding well with the results of the Q-1 and also with the

results of financial year 2020-21.

With these favourable aspects in mind, Mr. Sanjay, proposed to the Board that an interim
dividend be declared for the shareholders. He expressed his view that this would not only
boost the confidence of the investors in the wake of the Pandemic situation, but also
strengthen the position of the company among its competitors.
Accordingly, he proposed to declare an interim dividend of 10% and the source of interim
dividend proposed was as follows:
(a) Out of Profits earned in the Financial year 2020-21
(b) Out of Profits earned in the Financial year 2021-22 (From the Q-1 ending 30th June
2021)
Ms. Jyoti, one of the directors expressed her concern whether interim dividend could be
declared at this point of time or should the company wait for the ensuing Annual General
Meeting (AGM). Mr. Sanjay clarified that as per Section 123(3) and 123(4) of the Companies
Act, 2013, interim dividend can be declared during any financial year and at any time during
the period from the closure of the financial year till the holding of the AGM. Since the AGM
of the company was proposed to be held on 30th September 2021, the company can easily
pay dividend to the shareholders. One of the Directors, Ms. Sharda, said that the results
of the Financial Year 2020-21 were already approved by the Board of Directors in meeting
held on 10th May 2021 and the duly authenticated financial statement are presently in the
process of audit. To this, Mr. Sanjay convinced all the directors that since the AGM is not
yet held for FY 2020-21, it is implied that the annual accounts have not yet been adopted
by the shareholders and hence, there was scope for paying interim dividend out of profits of
FY 2020-21.
23.1 Which of the following is correct with regard to the source out of which the interim dividend
may be paid?
(a) The interim dividend can be paid out of profits earned by the company in the FY 2020-
21 and also out of the profits earned in the first quarter of FY 2021-22.
(b) The interim dividend cannot be paid out of profits earned by the company in the FY
2020-21 but can be paid out of the profits earned in the first quarter of FY 2021-22.
(c) The interim dividend can be paid out of profits earned by the company in the FY 2020-
21 but not out of the profits earned in the first quarter of FY 2021-22.
(d) The interim dividend can be paid out of accumulated profits only.
23.2 Going by the facts of the case, if the interim dividend of the company was declared in the
said board meeting held in July month, then by what date should the amount be deposited
in a separate account maintained with the scheduled bank for dividend purposes?
(a) By 14th July 2021 (c) By 16th July 2021
(b) By 15th July 2021 (d) By 17th July 2021

23.3 Which of the option is correct with regard to ratification of the payment of dividend?
(a) Interim dividend is declared by the Board of Directors and can be ratified by the
Managing Director of the company.
(b) Interim dividend needs the approval of the auditors with regard to the calculation of
the rate and hence can be ratified on their subsequent approval.
(c) Interim dividend is declared by the Board of Directors but the same needs to be ratified
at the ensuing AGM by the members.
(d) Interim dividend once declared and paid needs no ratification thereafter.
23.4 In case the company would have incurred loss during the current financial year upto the end
of the quarter immediately preceding the date of declaration of interim dividend, then what
should be the rate of the interim dividend?
(a) The rate of interim dividend declared shall not be at a rate higher than the average
dividends declared by the company during the immediately preceding three financial
years.
(b) The rate of interim dividend declared shall be less than the average of the rates at
which dividend was declared by it in the five years immediately preceding that year.
(c) The rate of interim dividend declared shall be the average of the rates at which
dividend was declared by it in the three years immediately preceding that year.
(d) In case of a loss, then interim dividend cannot be declared in the first place and only
final dividend can be declared.
23.5 By what date should the interim dividend declared in the meeting held in the July month, be
paid to the members of the company?
(a) 8th August 2021 (c) 10th August 2021
(b) 9th August 2021 (d) 11th August 2021
Answer Key
Question no. Answer
23.1 (a) The interim dividend can be paid out of profits earned by the
company in the FY 2020-21 and also out of the profits earned in
the first quarter of FY 2021-22.
23.2 (a) By 14th July 2021
23.3 (c) Interim dividend is declared by the Board of Directors but the
same needs to be ratified at the ensuing AGM by the members.
23.4 (a) The rate of interim dividend declared shall not be at a rate
higher than the average dividends declared by the company
during the immediately preceding three financial years.
23.5 (a) 8th August 2021
24. VXN Steels Limited (hereinafter referred as the “Company”), a Public Limited Company, is a
100% export-oriented unit, in Koraput, in the State of Odisha. Its paid-up capital is ` 200
crores divided into 20 crores of shares of ` 10 each.

The company decided to make a capital expenditure of ` 100 crores towards purchase of
equipment and land and ` 25 crores for machinery. The company approached banks and
financial institutions (FI) for financing the capital requirement of equipment, land and
machinery by way of term loans. The banks and FIs have agreed to advance money; but on
a condition that the company has to give necessary security for the amount of advance/
loans. In this regard, a charge on the property was also required to be created. The company
has informed to the banks and FIs that it has mortgaged the said fixed assets in favour of
the banks and FIs in their books of accounts.
The company was formed in April 2021 and being a newly incorporated company, the company
was not much well versed with the provisions of the Companies Act, 2013 (hereinafter
referred to as the “Act”) and also the company secretary was yet to be appointed.
Accordingly, they have asked the banks and FIs to do the needful compliances with respect
to the creation of charges. The banks and FIs informed the Company that as per relevant
provisions of the Act, if a company contravenes any provisions, there shall be levied
punishment/penalty provisions under the Companies Act, 2013, and hence the necessary
legal requirements will have to be compiled by the company and not by them. The company
was however of the view that “creation of charges” being a protection available to the
bank and FIs, the legal requirement only relates to filing of charges and not of any other
consequences. Hence, it was decided by the company to delay the process of filing the
charges and regularising the same by paying additional fees for delayed filing. The company
understood that there was no situation inviting any sort of punishment and at the worst,
the enhanced punishment, if any, will lead to levy of fine.
The loan agreement was signed and the charges were created on 14th May 2021, respectively,
and the documents creating charges were filed on 24th June 2021 with the Registrar of
Companies for creation of charges.
24.1 Which of the Statement is correct regarding mortgaging of the fixed assets?
(a) Fixed Charges are created as security whenever a company obtains term loans from
financial institutions or Banks.
(b) Floating Charges are created as security whenever a company obtains term loans
from financial institutions or Banks.
(c) A charge is to be created only when a company obtains term loans from financial
institutions.
(d) Creation of charge or otherwise depends upon the Registrar of Companies and company
can maintain their own records for repayment purposes.
24.2 In the given case scenario, by which date the creation of charges should have been filed at
the first place?

(a) By 14th June 2021 (c) By 14th July 2021

(b) By 13th June 2021 (d) By 13th July 2021
24.3 In the given case scenario, if the company fails to register the charge, then can the banks
and FIs file the necessary charges?
(a) It is the duty of the company to create charges and get it registered and no other
entity can do so on behalf of the company. Hence penalty provisions will apply.
(b) In case the company fails to register the charges, then the person in whose favour the
charge is created has to mandatorily get the charge registered.
(c) In case the company fails to register the charges within the prescribed period of
30 days then, the person in whose favour the charge is created can get the charge
registered.
(d) In case the company fails to register the charge then the Registrar of Companies
can issue order to the Company or to the Charge-holder to take necessary action for
registering the charge.
Answer Key
Question no. Answer
24.1 (a) Fixed Charges are created as security whenever a company
obtains term loans from financial institutions or Banks.
24.2 (b) By 13th June 2021
24.3 (c) In case the company fails to register the charges within the
prescribed period of 30 days then, the person in whose favour
the charge is created can get the charge registered.
25. Indian Mining Limited, an unlisted public company, (hereinafter referred as “Company”) has
its mining unit in Koraput in the State of Odisha. Its paid-up capital is ` 15 crores divided
into 15,00,000 equity shares of ` 100 each. The Company has also issued debentures to the
extent of ` 20 crores. The company’s registered office was located in the city of Bhubaneswar
in the State of Odisha.
As per provisions of the Companies Act, 2013, Companies are required to maintain Statutory
registers. The Company had a practice of maintaining one combine register for both Members
as well as Debenture-holders.
The company has decided to declare dividend for the financial year 2021-22 and hence there
is a requirement for closing the register of members. The company has closed its Register of
Members, by giving a minimum of 10 days’ notice.
It was observed that at least 80% of the total members were residing in the capital city of
New Delhi. Hence the company decided to keep its register of members in one of its offices
situated in the locality of Saket, New Delhi. It was felt that the appropriate place for
keeping the register of members should be the place where majority of members are residing.
Accordingly, it passed an ordinary resolution for maintaining the register of members at a

place other than the registered office.

The practice of the company for making entries in the Register of members was within 10
days of the approval by the Board approving the transfer of shares.
25.1 Which of the following statements apply to Indian Mining Limited with respect to closing
of the register of members?
(a) Yes, the company can close the register of members by giving at least 14 days prior
notice.
(b) Yes, the company can close the register of members by giving at least 7 days prior
notice.
(c) No, the Company is not allowed to close the register of members as it is the most
important statutory register.
(d) Yes, the Company can close the register of members by giving at least 7 days prior
notice and in such manner as specified by SEBI by advertisement one in vernacular
newspaper and other in English newspaper.
25.2 What is the time limit for which the Register of Members (ROM) may be closed?
(a) The ROM may be closed for any period not exceeding 45 days at any one time.
(b) The ROM may be closed for any period not exceeding 30 days at any one time and for
an aggregate of 60 days in one year.
(c) The ROM may be closed for any period not exceeding 30 days at any one time.
(d) The ROM may be closed for any period not exceeding 30 days at any one time and for
an aggregate of 45 days in one year.
25.3 Is the company complying with the provisions of the Act in maintaining the register of
members at New Delhi instead of Bhubaneswar?
(a) Yes, the company is complying in maintaining the register at New Delhi instead of
Bhubaneshwar as an ordinary resolution has been passed by the company.
(b) No, the company is not complying in maintaining the register at New Delhi instead of
Bhubaneshwar as no special resolution has been passed.
(c) No, the company is not complying in maintaining the register at New Delhi instead
of Bhubaneshwar as no special resolution of the members and no approval from the
Central Government has been obtained for keeping the register of members in a
different place other than the registered office.
(d) Yes, the company is complying in maintaining the register at New Delhi instead of
Bhubaneshwar as there is no restriction regarding the place where register has to be
maintained.
25.4 Is the practice of the company correct in maintaining the same register for equity shareholders
(members) as well as for debenture-holders?
(a) Yes, it is correct because both are stakeholders of the company.

(b) No, it is incorrect because there is a requirement of maintaining a separate register

for debenture holders.
(c) Yes, it is correct as there is no provision in company law regarding register of debenture
holders. It is only for equity shareholders who are the members of the company for
whom register is to be maintained.
(d) Yes, it is correct because both equity shareholder and debenture holders contribute to
the capital of the company.
25.5 Which of the following statement is correct with regard to the time period for the entries
in the register of members?
(a) The entries have to be made within 14 days of the date of approval by the Board.
(b) The entries have to be made within 21 days of the date of approval by the Board.
(c) The entries have to be made within 17 days of the date of approval by the Board.
(d) The entries have to be made within 7 days of the date of approval by the Board.
Answer Key
Question no. Answer
25.1 (b) Yes, the company can close the register of members by giving
at least 7 days prior notice.
25.2 (d) The ROM may be closed for any period not exceeding 30 days at
any one time and for an aggregate of 45 days in one year.
25.3 (b) No, the company is not complying in maintaining the register
at New Delhi instead of Bhubaneshwar as no special resolution
has been passed.
25.4 (b) No, it is incorrect because there is a requirement of maintaining
a separate register for debenture holders.
25.5 (d) The entries have to be made within 7 days of the date of
approval by the Board.
26. AXN Logistics Limited (hereinafter referred as “Company”) is a Public Limited Company with
a share capital of ` 200 crores divided into 2 crores equity shares of ` 100 each. It is engaged
in the transportation of raw materials and goods, situated in Barbil, a mining town in the
State of Odisha.
The Company wanted to expand from its existing line of logistics business to also providing
services in the area of leasing of its equipments and vehicles. This was, however, mentioned
as an “object” in the existing Object clause of the Memorandum of Association (“MOA”) of
the Company. But there was a need to increase the share capital of the company and the
existing amount stated in the capital clause of the MOA was not sufficient. Accordingly, the
company decided to call an extra ordinary general meeting (EGM) to obtain the approval of
the members for increasing the authorised share capital of the company from ` 200 crores
to ` 250 crores for making a consequent amendment to its existing MOA.

The company decided to hold an EGM on 27th August 2021 and accordingly planned for the
manner in which the notice, agenda and explanatory statement was required to be sent to
its shareholders.
After undergoing the relevant provisions of the Companies Act, 2013 and its own Articles of
Association, the following aspects were decided with regard to the sending of the notice of
the EGM that was proposed to be held on 27th August 2021.
(a) The proposed date for sending the notice would be 5th August 2021.
Notice would be sent only by email as an attachment to the email.
(b) The notice would be given to every member of the company, legal representative of
any deceased members or the assignee of an insolvent member.
(c) In the agenda, since there was only one item which required approval, there is no need
for an explanatory statement to be annexed to the notice.
(d) In Article No. 34 of the Articles of Association of the Company, it was provided that if
the company wishes to curtail the requirement of the minimum number of days with
respect to the length of notice vis a vis provided in the Companies Act, 2013, then it
can do so provided a unanimous Board resolution to that effect is passed by the Board
of Directors.
26.1 Which of the statement is correct with respect to date of sending notice and its mode of
sending?
(a) Yes, it is correct that notice is sent by email but it should be given on or before 4th
August 2021.
(b) Yes, it is correct that notice is sent by email but it should be given on or before 6th
August 2021.
(c) Yes, it is correct that notice is sent by email and also the proposed date for sending
the same is proper.
(d) No, it is not correct as the notice for the EGM should mandatorily be sent by post and
the notice should be given on or before 3rd August 2021.
26.2 Which of the statement is correct?
(a) The notice for an EGM can be sent as an attachment to e-mail.
(b) The notice for an EGM has to be mandatorily be sent by post.
(c) The notice for an EGM has to be sent by way of an attachment to an email as well as
by post.
(d) The notice for an EGM has to be sent by way of an attachment to an email and by way
of advertisement in the newspaper.
26.3 Which of the following statement is correct?
(a) The notice shall be given to every member of the company, legal representative of any
deceased members or the assignee of an insolvent member.

(b) The notice shall be given to every member of the company, legal representative of
any deceased members or the assignee of an insolvent member and the auditor or
auditors of the company.
(c) The notice shall be given to every member of the company, legal representative of any
deceased members or the assignee of an insolvent member, the auditor or auditors
and every director of the company.
(d) The notice shall be given to every member of the company and the legal representative
of any deceased member.
26.4 Which of the statement is correct in respect of the contention made that there is no need
for an explanatory statement to be annexed with the notice?
(a) Only in Annual General Meeting (AGM) there may be special business or ordinary
business depending on the matter of the agenda. Whereas, all businesses conducted in
Extraordinary Meeting (EGM) are Ordinary Businesses. Hence no need for explanatory
statement.
(b) Only in Annual General Meeting (AGM) there may be special business or ordinary
business depending on the matter of the agenda. Whereas, all businesses conducted
in Extraordinary Meeting (EGM) are Special Businesses. Hence there is a need for
explanatory statement.
(c) Irrespective of AGM or EGM, special business will be decided on the basis of the type
of resolution to be passed. In the case of the given company since only ordinary
resolution is required, the business is also ordinary and hence no need for explanatory
statement.
(d) An explanatory statement is needed when the company wants to furnish important
information relating to the agenda. Thus, in this case there is need for explanatory
statement.
26.5 Would you agree with the company’s contention of curtailing the length of notice?
(a) The contention of the company is correct as wide powers are given to companies to
decide upon the length of notice.
(b) The contention of the company is not correct because the statutory provision on
the length of notice would prevail over Articles of the company with respect to the
minimum length of notice.
(c) The contention of the company is correct because it is not a listed company.
(d) The contention of the company is not correct because it did not provide newspaper
advertisement regarding the length of the notice it has adopted.
Answer Key
Question no. Answer
26.1 (c) Yes, it is correct that notice is sent by email and also the
proposed date for sending the same is proper.
26.2 (a) The notice for an EGM can be sent as an attachment to e-mail.

26.3 (c) The notice shall be given to every member of the company,
legal representative of any deceased members or the assignee
of an insolvent member, the auditor or auditors and every
director of the company.
26.4 (b) Only in Annual General Meeting (AGM) there may be special
business or ordinary business depending on the matter of the
agenda. Whereas, all businesses conducted in Extraordinary
Meeting (EGM) are Special Businesses. Hence there is a need for
explanatory statement.
26.5 (b) The contention of the company is not correct because the
statutory provision on the length of notice would prevail over
Articles of the company with respect to the minimum length
of notice.
27. The Dohra Port Company Limited (hereinafter referred as “Company”) is a joint venture
between two giant Companies in the country namely ATTA Steel Limited and B & T Limited.
Its paid-up capital is ` 1500 crores divided into 15,00,00,000 equity shares of ` 100 each. The
number of members of the company is 8500 members out of which majority shares (80% to
the total share capital) is held by the two giant companies.
The company was conducting its 5th Extra-Ordinary General Meeting (EGM) on 29th May
2021 at 11:00 AM in the registered office of the company and the following members were
present in the meeting at the designated time.
I. Mr. A (representative of ATTA Steel Limited holding 40% share capital)
II. Mr. B (representative of B & T Limited holding 40% share capital)
III. Mrs. C (holding 100 shares)
IV. Ms. D (holding 500 shares)
V. Ms. E (holding 1000 shares)
VI. Mr. F (being Proxy of original shareholder of 10 shares)
VII. Mr. G (holding 100 shares)
VIII. Mr. H (holding 200 shares)
Another 25 members (each holding 500 shares) reported to the meeting at 11:45 AM as there
was heavy traffic congestion on the way.
The Company Secretary, Ms. Kripa commenced the meeting at 11:00 AM as per the scheduled
time because there were 5 members personally present (other than the representatives of
corporates and the proxy) and the minimum quorum needed for a public limited company
was already available. However, she requested the Chairman to go slow on the agenda as she
received text messages from 25 members that they would be shortly joining the meeting.
Accordingly, when the rest of the members joined the meeting, the main agenda of the
meeting was discussed at length. The auditor, present in the meeting objected at 11:55 AM

that the quorum as required by company law was not present and hence the meeting should
be adjourned. He said that since the meeting started late, it should be adjourned to 29th
June 2021, exactly one month from the present date at the same time i.e. 11:00 AM and at
the same place.

27.1 What is the correct position with regard to quorum of the company for the EGM held on
29th May 2021?
(a) The Company Secretary, Ms. Kripa had rightly ascertained the quorum for the meeting
at 11:00 AM – as 5 members.
(b) The correct quorum was rightly ascertained only when the 25 members joined the
meeting - 5 + 25 = 30 members.
(c) The correct quorum was present as the shareholders holding majority shares were
already present during the commencement of the meeting.
(d) The correct quorum was not ascertained as there were only 7 members present at the
time of commencement of meeting.
27.2 Can the presence of Mr. F be counted for the purpose of Quorum?
(a) Yes, he can be counted for the purpose of Quorum as he is physically present.
(b) No, he cannot be counted for the purpose of Quorum as he is a proxy.
(c) Yes, he can be counted for the purpose of Quorum as he is a proxy for the original
shareholder.
(d) No, he cannot be counted for the purpose of Quorum as he is proxy for a shareholder
who holds only 10 shares.
27.3 Is the objection of the auditor correct?
(a) Yes, the auditor is correct about the adjournment of the meeting.
(b) No, the auditor is not correct about the adjournment of the meeting as the required
quorum was present after the 25 members joined the meeting at 11:45 AM.
(c) Yes, the auditor is correct about the lack of quorum but not correct about the day of
holding the adjourned meeting.
(d) Yes, the auditor is correct about the lack of quorum as well about the adjournment
of the meeting.
27.4 From the case it was observed that, “However, she requested the Chairman to go slow on
the agenda as she received text messages from 25 members that they would be shortly
joining the meeting”. Is this kind of practice allowed as per the provisions of company law?
(a) Yes, it is very much allowed, keeping the practical difficulties into consideration.
(b) No, it is never allowed, as there is no validity of messages being sent at the time of
meeting.
(c) Yes, it is very much allowed, as the law provides for ascertainment of quorum at any

point of time of the meeting.

(d) No, it is not allowed, as the law provides for the requirement of quorum within half
an hour from the time appointed for the meeting.
Answer Key
Question no. Answer
27.1 (d) The correct quorum was not ascertained as there were only 7
members present at the time of commencement of meeting.
27.2 (b) No, he cannot be counted for the purpose of Quorum as he is
a proxy.
27.3 (c) Yes, the auditor is correct about the lack of quorum but not
correct about the day of holding the adjourned meeting.
27.4 (d) No, it is not allowed, as the law provides for the requirement of
quorum within half an hour from the time appointed for the
meeting.
28. Trusted Industries Limited (hereinafter referred as “Company”), a listed company on the
National Stock Exchange (NSE) was holding its Annual General Meeting on 30th September
2021 at the large auditorium of its registered office in the city of Guwahati. The company
wanted to apply the provision of the new mode of voting introduced in the Companies Act,
2013 which provided that a member in the prescribed class of companies can exercise his
right to vote by electronic means. The company made all the arrangements relating to the
holding of the meeting, especially for voting through electronic means. The company had
sent notices to all concerned persons in the prescribed manner to enable them to carry out
the procedure of voting. The company had clearly provided that the time for opening of
e-voting shall remain open for not less than two days and shall close at 4:00 PM on the date
preceding the date of the general meeting. The notice of the meeting provided the following
information:
- That the company is providing facility for voting by electronic means and the business
may be transacted through such voting;
- That the members who have cast their vote by remote e-voting prior to the meeting
may also attend the meeting but shall not been entitled to cast their vote again.
Further, the company decided to publish a public notice by way of an advertisement in
newspaper immediately on completion of dispatch of notices of the meeting. The company
also specified in the notice that the remote e-voting will not be allowed beyond the specified
date and time. The company appointed an independent Chartered Accountant in practice to
be the scrutinizer for the remote e-voting process.
The meeting was successfully conducted and as soon as the results of the voting were
ascertained, the results were declared along with the report of the scrutiniser placed on the
website of the company. The company had appointed an agency for the e-voting and the

results of the voting immediately thereafter were declared by the Chairman and were put
up on the website of the agency.
28.1 What is the correct position with regard to the time for opening of e-voting?
(a) The time for opening of e-voting shall remain open for not less than two days and
shall close at 4.00 PM on the date preceding the date of the general meeting.
(b) The time for opening of e-voting shall remain open for not less than three days and
shall close at 4.00 PM on the date succeeding the date of the general meeting.
(c) The time for opening of e-voting shall remain open for not less than three days and
shall close at 5.00 PM on the date preceding the date of the general meeting.
(d) The time for opening of e-voting shall remain open for not less than three days and
shall close at 5.00 PM on the date succeeding the date of the general meeting.
28.2 Regarding the putting up of results of the voting on the website, which of the statement is
correct in connection with the procedure followed by the Company?
(a) It is sufficient to put up the results of the voting along with the report of the
scrutiniser on the company’s website immediately after the meeting.
(b) It is essential to put up the results of the voting along with the report of the scrutiniser
on the company’s website and also on the website of the agency immediately after
the meeting.
(c) It is essential to put up the results of the voting along with the report of the scrutiniser
on the company’s website and also on the website of the agency immediately after
the meeting. Along with this, the company should simultaneously forward results to
the concerned stock exchange(s) where the shares are listed.
(d) It is sufficient to put up the results of the voting along with the report of the scrutiniser
on the company’s website immediately after the meeting and give a notice in the
newspaper about the uploading of information on the website.
28.3 With respect to the information in the notice of the meeting about the facility for voting
by electronic means and remote evoting, which of the following statement should be added
to the notice?
(a) The notice is complete with respect to electronic voting and remote e-voting and
hence no other information is needed.
(b) The notice should also provide that the facility for voting, either through electronic
voting system or ballot or polling paper shall also be made available at the meeting.
(c) The notice should also provide that the facility for voting, either through electronic
voting system or ballot or polling paper shall also be made available at the meeting
and members attending the meeting who have not already cast their vote by remote
e-voting shall be able to exercise their right to vote at the meeting.
(d) The notice should provide general information about the voting process and all

detailed information shall be provided at the commencement of the meeting and also
be uploaded / displayed on the company’s website.
28.4 Regarding the newspaper advertisement as decided to be published by the company
immediately on completion of dispatch of notices of the meeting, which of the following
statement is correct?
(a) The newspaper advertisement should be made at least 21 days before the date of
general meeting.
(b) The newspaper advertisement should be made at least 14 days before the date of
general meeting.
(c) The newspaper advertisement should be made at least 7 days before the date of
general meeting.
(d) The newspaper advertisement should be made at least 10 days before the date of
general meeting.
Answer Key
Question no. Answer
28.1 (c) The time for opening of e-voting shall remain open for not less
than three days and shall close at 5.00 PM on the date preceding
the date of the general meeting.
28.2 (c) It is essential to put up the results of the voting along with the
report of the scrutiniser on the company’s website and also on
the website of the agency immediately after
the meeting.
Along with this, the company should simultaneously forward
results to the concerned stock exchange(s) where the shares
are listed.
28.3 (c) The notice should also provide that the facility for voting, either
through electronic voting system or ballot or polling paper shall
also be made available at the meeting and members attending
the meeting who have not already cast their vote by remote
e-voting shall be able to exercise their right to vote at the
meeting.
28.4 (a) The newspaper advertisement should be made at least 21 days
before the date of general meeting.
29. Purple Airlines Limited (hereinafter referred to as “Company”), a public limited company
which is in the process of getting its shares listed on the National Stock Exchange (NSE),
Kolkata. In this regard, many meetings of the board of directors as well as of the members
have regularly been held. One of the members of the Company, Mr. Jyotiranjan, felt that
certain decisions taken by the company were not being properly executed as there were

numerous newspapers reports about the functions & feasibility of the company’s going
concern. Hence, he decided to inspect the minute book of the general meetings to understand
the actual proceedings of the discussion held in the meetings.
He approached the company on 27th August 2021, and requested the Company Secretary to
permit inspection of the minute book at 2:00 PM. The Company Secretary refused to allow
for the inspection saying that he could apply for taking the copies of the minutes of the
meetings but was not entitled to inspect the minute book at the office.
Accordingly, he made an application for obtaining the copies of the minutes of the meeting
held on 15th July 2021. The application was made by him on 28th August 2021 to the
company in the prescribed form and along with the fees suggested by the company which
was ` 100 for each page of the minute. The company informed that for soft copies it would
be ` 50/- per page.
Mr. Jyotiranjan, waited for 10 days and when no copies were made available to him, he
again approached the company for the copies. He was informed that since the Articles of
Association prescribed a minimum period of 14 days, he would receive the copies of the
minutes on or before 11th September 2021.
Finally, he received the copies of the minutes which consisted of 10 pages and a fees of
` 1,000/- was charged from him (` 100/- for each page). Jyotiranjan had also asked for
furnishing soft copies of the minutes of the meeting in respect of the previous general
meetings held during a period immediately preceding three financial years. (FY 18-19, FY 19-
20 and FY 20-21) The total number of pages were 95 and he was asked to pay ` 4,750/- (Being
the charges of ` 50 per page).
Mr. Jytoiranjan found that all the pages of the minutes were initialled and signed by the
Chairman of the meeting. However, in 2 cases, he observed that the minutes were signed by
another person, Mr. Ranjan, who was not the Chairman of the meeting but it was mentioned
that he being the general manager was duly authorised by the Board of Directors to sign the
minutes for the purpose. He also observed that the company followed a practice of recording
the minutes within 2 weeks of the conclusion of the meeting.
29.1 Which of the following statement is correct with respect to contention of the Company
Secretary relating to inspection of the minutes of general meetings?
(a) Inspection of the minutes of general meetings cannot be permitted to any member
and only copies can be furnished. The contention of the company was correct in this
regard.
(b) Inspection of the minutes of general meetings is permitted during business hours, to
any member with charge, subject to reasonable restrictions as specified in Articles or
as imposed in general meeting, for at least 2 hours in each business day.
(c) Inspection of the minutes of general meetings is permitted during business hours, to

any member without charge, subject to reasonable restrictions as specified in Articles

or as imposed in general meeting, for at least 4 hours in each business day.
(d) Inspection of the minutes of general meetings is permitted during business hours, to
any member without charge, subject to reasonable restrictions as specified in Articles
or as imposed in general meeting, for at least 2 hours in each business day.
29.2 Is the fees prescribed by the company (for taking the copies of the minute book) in line with
the Company Law requirements?
(a) Yes, it is correct, as the company is free to prescribe in its Articles of Association a
reasonable fee for taking copies from the minute book maintained by the company.
(b) The amount may be fixed in the Articles of Association but it should not exceed a sum
of ` 10/- for each page and for furnishing soft copies of the minutes of the meeting
of any previous general meeting held during a period immediately preceding three
financial years has to be provided free of cost.
(c) The amount may be fixed in the Articles of Association but it should not exceed a sum
financial years, has to be provided for a sum of not exceeding ` 1/- for each page.
(d) The amount may be fixed in the Articles of Association but it should not exceed a sum
financial years has to be provided for a sum not exceeding ` 10/- for each page.
29.3 Which of the following statement is correct with regard to time period for furnishing the
required copies of the minutes?
(a) The contention of the company is correct.
(b) The contention of the company is incorrect as the company is required to furnish the
copies of the minutes within 11 working days.
(c) The contention of the company is incorrect as the company is required to furnish the
(d) The contention of the company is incorrect as the company is required to furnish the
29.4 Which of the following is the correct provision with respect to signing of minutes of general
meetings?
(a) The practice of the company is not correct. Each page of the minute should be initialled
or signed and the last page to be dated and signed by the Chairman of the same
meeting within 30 days or in the event of the death or inability of that Chairman
within that period, by a director duly authorized by the Board for the purpose.
(b) The practice of the company is not correct. Each page of the minute should be initialled
or signed and the last page to be dated and signed by the Chairman of the same

meeting within 30 days or in the event of the death or inability of that Chairman,
then by the Chairman of the next succeeding meeting.
(c) The practice of the company is not correct. Each page of the minute should be
initialled or signed and the last page to be dated and signed by the Chairman of the
same meeting within 7 days or in the event of the death or inability of that Chairman
within that period, by a director duly authorised by the Board for the purpose
(d) The practice of the company is correct.
29.5 The company followed a practice of recording the minutes within 2 weeks of the conclusion
of the meeting. In this regard, which of the following statement is correct?
(a) The practice of the company is correct in recording the minutes within 2 weeks of the
conclusion of the meeting.
(b) The practice of the company is incorrect in recording the minutes within 2 weeks of
the conclusion of the meeting. It should be recorded within 7 working days.
(c) The practice of the company is incorrect in recording the minutes within 2 weeks of
(d) The practice of the company is incorrect in recording the minutes within 2 weeks of
Answer Key
Question no. Answer
29.1 (d) Inspection of the minutes of general meetings is permitted
during business hours, to any member without charge, subject
to reasonable restrictions as specified in Articles or as imposed
in general meeting, for at least 2 hours in each business day.
29.2 (b) The amount may be fixed in the Articles of Association but it
should not exceed a sum of ` 10/- for each page and for furnishing
soft copies of the minutes of the meeting of any previous
general meeting held during a period immediately
preceding three financial years has to be provided free of cost.
29.3 (c) The contention of the company is incorrect as the company is
required to furnish the copies of the minutes within 7 working
days.
29.4 (a) The practice of the company is not correct. Each page of the
minute should be initialled or signed and the last page to be
dated and signed by the Chairman of the same meeting within
30 days or in the event of the death or inability of that Chairman
within that period, by a director duly authorised by the Board
for the purpose.
29.5 (a) The practice of the company is correct in recording the minutes
within 2 weeks of the conclusion of the meeting.

30. Magic Cosmetics Private Limited (MCPL) was incorporated on 12th August 2021 with its
registered office situated in Dehradun and branch offices at Delhi and Jaipur. The company
was engaged in the business of manufacturing herbal products used as cosmetics. The
company had prepared its books of accounts and other relevant books and records and
financial statements for the year ending 31st March 2022.
The company maintains its books of accounts on a double entry system of accounting
on an accrual basis and keeps the books of account and other relevant books and papers
and financial statements in the city of Jaipur in Rajasthan, which happens to be its major
branch office.
Gradually, the activities of the company grew and it opened its first branch office outside
India in Colombo, Sri Lanka. The business started developing well and necessary records
and documents including the books of account of the branch were maintained. One of
the Directors, Mr. Lal, felt it necessary to inspect the books of account and other relevant
documents maintained at Colombo branch.
However, due to his busy schedule, he could not personally inspect the records and accordingly
sought necessary financial information through his attorney holder.
The board of directors of the company had entrusted Ms. Priyanka, the General Manager of
the Company to fulfil all the duties with regard to complying with the provisions of the
company law in relation to maintaining the books of account, place of keeping the books
of account, time period for preservation of books and all relevant papers and such things as
prescribed in this regard.
The Company maintains its “books of account” in a place (Jaipur) other than the registered
office (Dehradun) of the company.
30.1 What is the company law requirement with reference to “books of account” that is required
to be maintained by Magic Cosmetics Private Limited?
(a) Records maintained in respect of all sales and purchases of goods and services by the
company and the assets and liabilities of the company.
(b) Records maintained in respect of sum of money received and expended and matters in
relation to which the receipts and expenditure take place, all sales and purchases of
goods and services by the company and the assets and liabilities of the company.
(c) Records maintained in respect of sum of money received and expended and matters in
relation to which the receipts and expenditure take place, all sales and purchases of
goods and services by the company, the assets and liabilities of the company and the
items of cost as prescribed.
(d) a balance sheet, profit and loss account, cash flow statement, any explanatory note
annexed to.

30.2 Which of the following is the correct statement relating to place of keeping “books of
account”?
(a) The company can maintain its “books of account” in any place within India as the
Board of Directors may decide.
(b) The company can maintain its “books of account” in any place within India as the
Board of Directors may decide but the same has to be intimated with the Registrar
before 31st March of that year.
(c) The company can maintain its “books of account” in any place within India as the
Board of Directors may decide but the same has to be intimated with the Registrar
within 7 days of the decision of Board.
(d) The company cannot maintain its “books of account” in any place other than its
registered office.
30.3 As observed in the case, can a director seek with respect to financial information maintained
outside the country (i.e. financial information relating to books of account maintained in
Colombo)
(a) A director can inspect and seek information from any Branch of the Company located
within the country only.
(b) The director can seek the information through his attorney holder with respect to
financial information maintained outside the country also.
(c) The director can seek the information only individually and not through his attorney
holder with respect to financial information maintained outside the country.
(d) The director can seek the information through his representative with respect to
financial information maintained outside the country.
30.4 With regard to preservation of the books of MCPL, the books of accounts for the FY 2021-22
needs to be kept in good order until at least which of the following years?
(a) FY 2026-27 (c) FY 2028-29
(b) FY 2027-28 (d) FY 2029-30
30.5 Which of the statement is correct with respect to entrusting Ms. Priyanka for maintaining
the books?
(a) Only the Managing Director can be entrusted to take the responsibility for the
maintenance of books of account etc.
(b) Only the Managing Director or any Whole time director can be entrusted to take the
responsibility for the maintenance of books of account etc.
(c) Only Whole time director (in charge of finance) or Chief Financial Officer can be
entrusted to take the responsibility for the maintenance of books of account etc.
(d) Only the Managing Director or the Whole time director (in charge of finance) or Chief
Financial Officer or any other person of a company charged by the Board with such
duty can be entrusted to take the responsibility for the maintenance of books of

account etc.
Answer Key
Question no. Answer
30.1 (c) Records maintained in respect of sum of money received and
expended and matters in relation to which the receipts and
expenditure take place, all sales and purchases of goods and
services by the company, the assets and liabilities of the
company and the items of cost as prescribed.
30.2 (c) The company can maintain its “books of account” in any place
within India as the Board of Directors may decide but the same
has to be intimated with the Registrar within 7 days of the
decision of Board.
30.3 (c) The director can seek the information only individually and not
through his attorney holder with respect to financial information
maintained outside the country.
30.4 (d) FY 2029-30
30.5 (d) Only the Managing Director or the Whole time director (in
charge of finance) or Chief Financial Officer or any other person
of a company charged by the Board with such duty can be
entrusted to take the responsibility for the maintenance of
books of account etc.
31. Dream Real Estate Builders and Developers Ltd. was incorporated in 2015 as a public company.
The company is engaged in the business of development of agriculture land for commercial
and residential use, construction of commercial malls and residential flats and the matters
incidental thereto.
In the beginning of January, 2022, the company received a mega project to construct a
commercial mall in the Wagholi area of Pune.
The company was in advance stage of negotiation with some farmers having a total agriculture
land area of 20 Bighas (approximately 5.38 lakhs Square feet). The cost of conversion of such
agriculture land for urban uses, development of land and construction cost of the shopping
mall and offices was estimated to ` 500 crores.
The promoters of the company planned to come out with public issue to finance this project.
They dialogued with the Merchant Bankers, Bankers to the Issue and other intermediary
agencies and professionals and filed Prospectus with the SEBI for its approval. In the
prospectus the company mentioned about the construction of mall in Wagholi area of Pune,
on the land, for which the company has got lease license rights for next 100 years from the
present land owners.
But in fact, the company was not having any lease agreement with the land owners and

only the talks were at the pre-final stage.

The company entered in to agreement with the underwriters to pay commission @ 5% of the
issue price at which the shares will be issued. However, the Articles of the company were
silent on payment of such commission.
The prospectus filed with the SEBI got approved. The issue was launched, oversubscribed and
the allotment formalities were completed within the prescribed time frame.
After the successful completion of the issue, the land owners changed their decisions and did
not execute the lease deed in favour of the company. As a result, the purpose for which the
money was raised from public could not be utilised for that specific project. The company
therefore, invested such funds raised through the public issue, in buying and trading with
equity shares of other companies and made a good profit. The purpose for such buying and
trading was to utilise the funds for the time being, till any new real estate project came in
the hands of the company.
Suresh, is an advocate, based in Pune. The farmers who were land owners of their agriculture
land in Wagholi, Pune had consulted, Suresh, some time before the launch of the public issue
by the company, to know the pros and cons of giving of land on lease to the company.
Meanwhile, when the issue opened, Suresh, who was already having the idea of such land
dealing, applied and got the allotment of shares.
Later on, he came to know that farmers never executed lease license in favour of the
company which leads to material mis-statement of facts in the prospectus issued by the
company, at the time of issue.
The company was actually not having the rights to use the land for the next 100 years,
which in fact, the company had mis-stated in the prospectus, that it was having such lease
license agreement.
Aggrieved from this, Suresh filed a complaint against the company, its promoters and
directors.
When the issue was listed on the bourses, it opened with the premium over the issue price.
Mahendra purchased 1000 shares from the secondary market. When Mahendra came to
know from some media sources, that the company had mis-represented the material facts
in the prospectus, he also decided to initiate legal action against the company.
31.1 What will be the fate in relation to the complaint file by Suresh?
(a) The company is not liable for any civil liability in this case.
(b) The company is not liable since Surendra has not suffered any loss, as the issue opened
above its issue price and Surendra could have sold his shares.
(c) Since the Prospectus was duly approved and vetted by the SEBI, the company cannot
be held accountable for anything, which was later on proved wrong.
(d) The company and every person who, is a director at the time of issue of the prospectus,

has authorised himself to be named in the Prospectus as director, is a promoter, has

authorise the issue of the prospectus and the expert, shall be liable for such mis-
statement.
31.2 Whether Mahendra will get a decision in his favour if he files a case against the company?
(a) Yes, as the company has raised money by misstatement of facts.
(b) No, since he has purchased the shares from the secondary market and not by first
reading the Prospectus and then subscribing in IPO.
(c) No, as Mahendra can easily sale the shares in the secondary market and realise the
amount.
(d) Mahendra should sale the shares in the secondary market and if there is any loss,
then for such loss, he can file the case against the company for which he would get
decision in his favour.
31.3 Who shall be held responsible for the criminal liability if it is proved that such misstatement
in the prospectus was intended to mislead or deceive the subscribers?
(a) The company shall be held responsible.
(b) Neither the company nor its employees shall be held responsible for the criminal
liability.
(c) Every person who authorises the issue of prospectus containing the mis-leading
statement shall be held responsible for the criminal liability.
(d) Only the Legal Adviser who drafted the Prospectus containing the mis-leading
information shall be held responsible for the criminal liability.
31.4 Choose the correct option in relation to utilization of money raised by company through
issue of prospectus:-
(a) Since the idle funds earn no money, it is always better to deploy such funds in a
judicious and profitable manner.
(b) The company has every right to utilise the money in other projects, if the project for
which the money was raised could not be implemented.
(c) The company shall not use any amount raised by it through prospectus for buying or
trading or otherwise dealing in equity shares of the other listed company.
(d) The company should refund the money so raised to the investors since the object
behind raising the money could not be accomplished.
31.5 The company paid commission of underwriting @ 5% on the issue price of the shares. Is it
violations of the provisions of the company law?
(a) No, it is not violation since the Companies Act, 2013 permits for payment of such
commission.
(b) The payment of commission should be authorised by the Board of the company.
(c) The payment of commission should be authorised by the Articles of Association of the
company.

(d) The rate of commission was not reasonable looking to the size of the issue.
Answer Key
Question no. Answer
31.1 (d) The company and every person who, is a director at the
time of issue of the prospectus, has authorised himself to
be named in the Prospectus as director, is a promoter, has
authorise the issue of the prospectus and the expert, shall
be liable for such misstatement.
31.2 (b) No, since he has purchased the shares from the secondary
market and not by first reading the Prospectus and then
subscribing in IPO.
31.3 (c) Every person who authorises the issue of prospectus
containing the mis-leading statement shall be held
responsible for the criminal liability.
31.4 (c) The company shall not use any amount raised by it through
prospectus for buying or trading or otherwise dealing in
equity shares of the other listed company.
31.5 (c) The payment of commission should be authorised by the
Articles of Association of the company.
32. Progressive Ltd is a public limited company engaged in the business of manufacturing of
non-leather shoes, chappals and other footwear. It decided to raise funds to meet out
the funding requirement for establishment of a new manufacturing unit in a village near
Ahmedabad. The company issued a Follow-on Public Offer (FPO) to raise ` 30 crores as
follows:
Particulars Amount
Issue of Equity shares
Number of Shares: 1,00,00,000 ` 30
Face Value of ` 10 per share at a premium of ` 20 per share

(Issue price @ ` 30 per equity share)
The amount on equity shares would be called up in two
instalments:
- First call @ ` 20 per share.
- Second and final call @ ` 10 per share.
The issue was fully subscribed and the shares were allotted to the investors. The company
had made only the first call, however some of the investors paid the entire amount in the
first call itself (i.e., ` 30 per equity shares). The company accepted this money. The investors
who paid the calls in advance were demanding for the payment of interest on the amount
so un-called, but paid by them and also demanded for enhanced voting rights.

The company, after such successful completion of the FPO, was planning to raise further
funds through issue of preference shares and debentures in order to meet out some foreign
orders and expansion of its existing plant at Bhavnagar. The company proposed to issue as
follows:-
Particulars Amount ` in
crores
Issue of Redeemable Preference Shares (Coupon rate - 10%) 20
Number of Preference Shares: 20,00,000
Face Value of Preference Shares ` 100
[50% of the Preference shares shall be redeemed at the end of 10th
year from the date of allotment and rest 50% shall be redeemed at
the end of 25 years from the date of allotment]
Issue of Irredeemable Preference Shares (Coupon rate - 20%) 10
10 lakh shares of Face Value of ` 100 each.
Issue of convertible Debentures with voting rights (Coupon rate - 10%)
10 lakh convertible debenture, face Value of ` 100 each (These debentures
shall be converted into equity after the end of 5 years from the date of
allotment. Till conversion, the debenture holders shall carry the voting
rights)
Issue of secured Debentures maturing after 12 years 10
10 lakhs secured debentures, face Value ` 100 each, maturing at the
end
of 12th year from the date of allotment.
The Articles of the company have requisite provisions for issue of capital through equity and
preference shares and to raise money through debentures.
The company had also raised finance from a banking company earlier and total amount
due as on 31.03.2021 was ` 20 crores. At the time of availment of loan from the bank, there
was a clause in the loan agreement that if the company is not able to service the loan,
the loan amount shall be converted into equity after 2 years from the date of availment.
The conversion of debt into equity shares shall be at a discount of 10% of the face value.
As the company was not able to service the repayment of interest on loan and payment of
principal, the loan amount was now eligible for conversion at the pre-agreed discount rate.
The company approached you being a professionally qualified Chartered Accountant to get
your professional advice on the issues planned and narrated by the company.
32.1 What shall be your advice with respect to the calls-in-advance?

(a) The company should return back such un-called amount to the investors.
(b) The company may retain such un-called amount, however no interest liability arises.
(c) The company may keep such amount, if so, authorised by the Articles. However, they
are not entitled for any voting rights till the amount is duly called up.
(d) The company may forfeit the amount so un-called.
32.2 What is your opinion with respect to the issue of irredeemable preference shares proposed
by company?
(a) Yes, the company can issue any type of preference shares, whether it be redeemable
or irredeemable.
(b) If the articles of the company permit the company to issue irredeemable preference
Shares, then it can issue.
(c) The financial position of the company is not good, since it could not repay the loan
raised from the F.I.
(d) The company cannot issue irredeemable preference shares.
32.3 What is your opinion with respect to the issue of redeemable preference shares proposed by
company if such funds are not to be raised for any infrastructure project?
(a) There is no prohibition on issue of redeemable preference shares, by any company,
having any maturity period.
(b) The company should avoid issuing the preference shares with such long term bearing
the coupon rate @ 20%, since it may be a financial burden on the company, if the
interest rates fall down in coming time.
(c) As per the provisions of the Companies Act, 2013, the redeemable period of the
preference shares shall not exceed 20 years from the date of issue, so the tenure of
rest 50% of the redeemable preference share should be reduced so as, not to exceed
the issue period of 20 years.
(d) As the Article of the company permits, the preference shares can be issued maturing
after 20 years from the date of issue.
32.4 How you will guide the company with respect to the issue of shares at discount to the
banking company by converting the loan?
(a) Companies Act, 2013 do not allow to issue shares at discount to the face value in any
case.
(b) If the company is unable to liquidate the loan amount, it can seek special permission
form the Central Govt. (MCA) to convert such loan into equity.
(c) A company may issue shares at a discount to its creditor when its debts is converted
into shares in pursuance of any statutory resolution plan or debt restructuring plan
in accordance with any guidelines or directions or regulations specified by the RBI.
(d) The loan may be converted into equity but it should at par and not at discount.
32.5 Is it valid to issue convertible debentures carrying voting rights?

(a) No, till the debentures are converted into equity, such debentures cannot carry the
voting rights.
(b) If the articles of the Company permit, then the company may issue such debentures.
(c) If prior approval from the existing shareholders is obtained by the Company in the
General Meeting, by an ordinary resolution, it can issue such debentures.
(d) The company can issue such debentures carrying the voting rights provided a special
resolution is moved in the General Meeting of the company and it is approved by the
3/4th of majority of the shareholders.
32.6 Can the company issue such secured debentures as aforesaid if such funds are not to be
raised for any infrastructure project?
(a) Yes, the company can issue such debentures
(b) Yes, the company can issue such debentures, provided it contains such provisions in
its articles for the same.
(c) The company may issue such debentures provided the date of its redemption shall not
exceed 10 years from the date of issue.
(d) The company may issue such debentures if approved by its shareholders by passing a
special resolution.
Answer Key
Question no. Answer
32.1 (c) The company may keep such amount, if so, authorised by
the Articles. However, they are not entitled for any voting
rights till the amount is duly called up.
32.2 (d) The company cannot issue irredeemable preference shares.
32.3 (c) As per the provisions of the Companies Act, 2013, the
redeemable period of the preference shares shall not exceed
20 years from the date of issue, so the tenure of rest 50%
of the redeemable preference share should be reduced so as,
not to exceed the issue period of 20 years.
32.4 (c) A company may issue shares at a discount to its creditor
when its debts is converted into shares in pursuance of any
statutory resolution plan or debt restructuring plan in
accordance with any guidelines or directions or regulations
specified by the RBI.
32.5 (a) No, till the debentures are converted into equity, such
debentures cannot carry the voting rights.
32.6 (c) The company may issue such debentures provided the date
of its redemption shall not exceed 10 years from the date
of issue.

33. Sudarshan Cement Ltd. is an unlisted public company. During the preceding financial years,
the key parameters of the company were as under:
(` in crores)
Particulars 1st F.Y. 2nd F.Y. 3rd F.Y.
Paid-up Capital 45 45 45
Turnover 150 190 195
Loans and Advances from Banks # 95 80 97
(Sanctioned Limit: ` 120 crores)
Deposits # 20 27 24
# Loans and Advances from Banks / Deposits: The Minimum and Maximum outstanding of
loans and advances during the respective financial years were as under:
FY 1st F.Y. 2nd F.Y. 3rd F.Y.
Month Minimum Maximum Minimum Maximum Minimum Maximum
Loan & Advances 89 115 90 97 92 90
Deposits 19 22 17 27 15 30
The Managing Director of the company had appointed Suresh (an employee of the company,
posted in Accounts Dept. of the company) as an Internal Auditor for the company for 1st F.Y.
The Audit Committee of Board had objected such appointment and removed Suresh from
such post and had recommended appointment of Anthony as internal auditor for 1st F.Y.,
which had been subsequently approved by the Board of Directors. Anthony had just cleared
the final examination of the Institute of Chartered Accountants of India (ICAI) and he was
neither having the membership of ICAI nor the Certificate of Practice from ICAI.
33.1 Whether the company was required to appoint internal auditor for 2nd F.Y.?
(a) Since the company is an unlisted public company, hence it was not required to appoint
internal auditor.
(b) The company’s paid-up capital, turnover, loans & advances and deposits were below
the threshold limits, hence, was not required to appoint internal auditor.
(c) The highest outstanding amount in the head of ‘loans and advances’ during the 1st
F.Y., was ` 115 crores, hence it required to appoint internal auditor for the 2nd F.Y.
(d) The sanctioned limit for the loans and advances was ` 120 crores, which exceeded the
threshold limit and hence it was required to appoint internal auditors for the 2nd F.Y.
33.2 Whether the company was required to appoint internal auditor for 3rd F.Y.?
internal auditor.
(b) The company’s paid-up capital, turnover and loans & advances were below the
threshold limits, hence, was not required to appoint internal auditor.
(c) he highest outstanding amount in the head of ‘loans and advances’ during 2nd F.Y.,
was ` 97 crores, hence was not required to appoint internal auditor for 3rd F.Y.

(d) The highest deposit amount outstanding during 2nd F.Y., was ` 27 crores, which exceeds
the threshold limit, hence it was required to appoint internal auditor for 3rd F.Y.
33.3 Whether the company was required to appoint internal auditor for 4th F.Y.?
internal auditor.
(b) he company’s paid-up capital, turnover, loans & advances and deposits were below the
threshold limits, hence, was not required to appoint internal auditor.
(c) The highest outstanding amount in the head of ‘loans and advances’ during the 3rd
F.Y., was ` 99 crores, which was below the threshold limit, hence was not required to
appoint internal auditor for the 4th F.Y.
(d) The deposit amount outstanding at the end of 3rd F.Y., was ` 24 crores, which was
below the below the threshold limit, but during the said FY the maximum outstanding
was ` 30 crores, hence it was required to appoint internal auditor for the 4th F.Y.
33.4 Choose the correct option with respect to appointment of Anthony as Internal Auditor of
the company:-
(a) A person should be C.A. means he should at least have the membership of ICAI.
(b) Appointment of CA who is not having the Certificate of Practice from ICAI is not a
valid appointment for the post of internal auditor.
(c) A person (CA, CMA or any other professional as may be decided by the Board) may be
appointed as internal auditor whether engaged in practice or not.
(d) It depends upon the discretion of the management.
Answer Key
Question no. Answer
33.1 (c) The highest outstanding amount in the head of ‘loans and
advances’ during the 1st F.Y., was ` 115 crores, hence it required
to appoint internal auditor for the 2nd F.Y.
33.2 (d) The highest deposit amount outstanding during 2nd F.Y., was `
27 crores, which exceeds the threshold limit, hence it was
required to appoint internal auditor for 3rd F.Y.
33.3 (d) The deposit amount outstanding at the end of 3rd F.Y., was ` 24
crores, which was below the below the threshold limit, but
during the said FY the maximum outstanding was ` 30 crores,
hence it was required to appoint internal auditor for the 4th F.Y.
33.4 (c) A person (CA, CMA or any other professional as may be decided
by the Board) may be appointed as internal auditor whether
engaged in practice or not.
34. Satguru Investments Ltd was incorporated on 25th April, 2021. The first Board meeting
of company was held on 30th April, 2021, to discuss the business issues along with the
appointment of first auditor of the company. The Company Secretary put a panel of 5

auditors before the Board, however no consensus was arrived at, for the appointment of any
of the auditor. The time prescribed under the Companies Act, 2013, for appointment of the
first auditor lapsed and accordingly the company informed its members that first auditor
for the company could not be appointed and called an Extraordinary General Meeting of the
members for making appointment of the first auditor. The name of Bharat, a practicing CA,
was proposed and the same was appointed by the members.
The first Annual General Meeting of the company was held on 15th December, 2021 in which,
Bharat was appointed as an auditor of the company till the conclusion of the 6th Annual
General Meeting.
In the month of January 2022, a news was published in the local newspaper that Bharat was
sentenced for imprisonment of 2 years by a court of law for the offence of fraud for which
he was going to appeal before the higher court against the decision of the lower court.
The company treated it as a casual vacancy of the auditor and the Board appointed another
auditor named Gaurav, till the conclusion of the next AGM. The next AGM held on 20th
August 2022, however in this AGM no appointment of auditor was made.
34.1 The first auditor should be appointed by the Board of Directors within _______ days from the
date of registration of the company, failing which the members of the company shall within
___________ days at ____________ appoint such auditor and such auditor shall hold office till
the conclusion of the ___________.
(a) 30 days / 30 days / an EGM / 6th AGM
(b) 30 days / 60 days / an EGM / 6th AGM
(c) 30 days / 90 days / an EGM / First AGM.
(d) 30 days / 90 days / an EGM / 6th AGM
34.2 How, the company shall treat the situation of conviction of Bharat by the court of law?
(a) The company shall continue with the appointment of such auditor.
(b) The company shall wait till the appeal and its final decision comes out.
(c) The company shall wait till the date when the execution of Bharat accomplished i.e.,
he is actually put behind the bars.
(d) The company shall treat this as casual vacancy.
34.3 In the given case the Board treating it as casual vacancy, appointed Gaurav. Such casual
vacancy of auditor should be filled up by the Board of Directors _________ days and Gaurav
shall continue as an auditor of the company till the conclusion of the next AGM.
(a) Within 30 days (c) Within 60 days
(b) Within 45 days (d) Within 90 days
34.4 Gaurav was appointed by the Board as an auditor till the conclusion of the next AGM.
However, in the next AGM, no appointment of auditor was made. Now what shall be the
status:

(a) The present auditor Gaurav, shall continue to be the auditor of the company.
(b) The present auditor Gaurav’s term was only upto the conclusion of the next AGM so
he should vacate the office as an auditor.
(c) The Board can appoint another person as auditor in place of Gaurav, treating it as
casual vacancy.
(d) When no appointment is made by the members in the AGM, an EGM shall be called
upon to make the appointment of auditor within 90 days.
34.5 If the Board intends to remove Gaurav as an auditor before the expiry of his term, what
procedure needs to be followed?
(a) The auditor can be removed before expiry of his term by moving an ordinary resolution
in the shareholder’s meeting.
(b) The auditor can be removed before expiry of his term by moving an ordinary resolution
in the shareholder’s meeting, after obtaining the previous approval of the Central
Govt.
(c) The auditor can be removed before expiry of his term by moving a special resolution
in the shareholder’s meeting.
(d) The auditor can be removed before expiry of his term by moving a special resolution
in the shareholder’s meeting, after obtaining the previous approval of the Central
Government.
Answer Key
Question no. Answer
34.1 (c) 30 days / 90 days / an EGM / First AGM.
34.2 (d) The company shall treat this as casual vacancy.
34.3 (a) Within 30 days
34.4 (a) The present auditor Gaurav, shall continue to be the auditor
of the company.
34.5 (d) The auditor can be removed before expiry of his term by
moving a special resolution in the shareholder’s meeting,
after obtaining the previous approval of the Central
Government.
35. Anshul and Nikita are husband and wife. They are engaged in the business of trading of
handloom items. They purchase handmade bedsheets, towels, napkins and other related
items from Solapur-Maharashtra and sale them in Rajasthan.
One of their friends suggested them to form a private limited company. By corporatizing
their business, they will be having more recognition and may also be able to export such
handloom products.
They formed a company in the name of Anshul Textiles Pvt. Ltd. in which they both were the
only members. They used to get the handloom work on job basis from the workers according
to the demand and sale them in Indian market as well exporting the same.

The company also availed a line of credit facility from the bank to the tune of ` 20 lakhs.
Anshul used to travel different places in order to search for the new market. One day,
the air craft, in which he was travelling, crashed while landing at the Mumbai airport. All
passengers including Anshul, died.
Now, Nikita was the only member in that private limited company.
Their family friend suggested to include her brother as a member of the company, but
Nikita did not agree to such suggestion. Instead, she thought to get it convert from private
limited company to One Person Company (OPC) and make nomination in favour of her
brother. Nikita’s brother, Rohan, an Indian citizen, is presently in Auckland, New Zealand, in
connection with his employment.
35.1 After the death of Anshul, for how much time period, Nikita can carry on the business of
company without incurring any personal liability on her part for the debts of the company?
(a) Up to three months (c) Up to five months
(b) Up to four months (d) Up to six months
35.2 Who can be a nominee in OPC:
(a) A nominee in an OPC shall be an Indian Citizen whether resident in India or otherwise
(b) A minor can be a nominee
(c) A person to become the nominee in OPC shall be at least 16 years but shall not be
more than 60 years of age
(d) Only a nominee in one OPC can be made nominee in another OPC
35.3 Whether Rohan can be a nominee of OPC?
(a) Since he is out of India, hence cannot become the nominee
(b) He can be a nominee of an OPC and has to provide his consent in the prescribed form.
(c) Since he is in employment, hence cannot be a nominee of an OPC
(d) He has to seek No objection certificate from his employer to become a nominee in an
OPC and such NOC needs to be furnished to the Registrar
Answer Key
Question no. Answer
35.1 (d) Up to six months
35.2 (a) A nominee in an OPC shall be an Indian Citizen whether
resident in India or otherwise
35.3 (b) He can be a nominee of an OPC and has to provide his consent in
the prescribed form.
vvvv


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CA INTERMEDIATE

PAPER-2 : CORPORATE AND OTHER

PART- 1 COMPANY LAW

1 PRELIMINARY ................................................................................... 1-7

2 INCORPORATION OF COMPANY.......................................................... 8-17

3 PROSPECTUS AND ALLOTMENT OF SECURITIES.................................. 18-31

4 SHARE CAPITAL AND DEBENTURES ........ ....................................... 32-72

5 ACCEPTANCE OF DEPOSITS BY COMPANIES........................................ 73-75

6. REGISTRATION OF CHARGE ........................................................... 76-82

7. MANAGEMENT AND ADMINISTRATION ............................................. 83-105

8. DECLARATION OF DIVIDEND_ PAYMENT OF DIVIDEND .................... 106-124

9. ACCOUNTS OF COMPANIES............................................................... 125-143

10. AUDIT & AUDITORS ....................................................................... 144-155

11. COMPANIES INCORPORATED OUTSIDE INDIA ................................... 156-163

12. LIMITED LIABILITY PARTNERSHIP ACT, 2008 ................................... 164

PART- 2 OTHER LAWS

1 THE GENERAL CLAUSES ACT ,1897................................................... 165-166

2 INTERPRETATION OF STATUTES ...................................................... 167-170

3 THE FOREIGN EXCHANGE MANAGEMENT ACT ,1999.......................... 171-174

GENERAL MCQS & CASE STUDIES ....................................................... 175-274

1. The provisions of Companies Act, 2013 applies to

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 1

12. Net worth does not include__________

(a) Liquidator (c) Depository

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 3

(b) members of the company can claim ownership of company's property

(a) 65 (b) 70 (c) 75 (d) 80

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 5

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 7

(d) By filing documents with NCLT.

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 9

(b) solicitor who drafts MOA/AOA. (c) A&B.

(b) When it gets the certificate of incorporation

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 11

(a) Partnership firm (c) A FOREIGNER

(c) A special Resolution and approval of Tribunal

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 13

(b) Number of shares

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 15

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 17

11. When there is a untrue statement in a prospectus, who can sue?

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 19

(c) The court (d) none of the aove

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 21

(a) The member; company (c) The public; company

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 23

(a) 30 days (b) 60 days (c) 90 days (d) 120 days

(a) More than 30 days (c) More than 90 days

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 25

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 27

(a) Statement in lieu of prospectus (c) Shelf Prospectus

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 29

(a) Qualified Institutional Buyers

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 31

1. Minimum________________% of preference shares should be redeemed every year.

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 33

(a) An ordinary resolution (c) An unanimous resolution

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 35

(c) 1%,Rs.20 lakh (d) 2%,Rs.20 lakh

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 37

RBI or by the National Housing Bank or by any othr=er statutory authority

CA Intermediate | Paper-2 : Corporate and Other Laws MCQS 39