CA Inter – Corporate and Other Law

Test 1 – Preliminary and Incorporation of Companies

Total marks – 30
Time – 60 mins
Learn Law with CA Shubham Singhal – The Ranker’s Ways
Question 1:
Mr. Raja along with his family members is running successfully a trading business. He is
capable of developing his ideas and participating in the market place. To achieve this, Mr. Raja
formed a single person economic entity in the form of One Person Company with his brother
Mr. King as its nominee. On 4th May 2020, Mr. King withdrew his consent as Nominee of the
One Person Company. Can he do so under the provisions of the Companies Act, 2013? Examine
whether the following individuals are eligible for being nominated as Nominee of the One
Person Co. as on 5th May 2020 under the above said Act.
(i) Mr. Shyam, son of Mr. Raja who is 15 years old as on 5th May 2020.
(ii) Ms. Devaki an Indian Citizen, sister of Mr. Raja stays in Dubai and India. She stayed
in India during the period from 2nd January 2019 to 16th August 2019. Thereafter
she left for Dubai and stayed there.
(iii) Mr. Ashok, an Indian Citizen residing in India who is presently a member of a 'One
Person Company'.
[5 marks]
Question 2:
The Articles of Association of a Company may contain provisions for entrenchment under
Section 5 of the Companies Act,2013. What is meant by entrenchment provisions in this
context? Also state the relevant provision of the said Act dealing with entrenchment
provisions.
[4 marks]
Question 3:
Examine the validity of the following different decisions/proposals regarding change of
office by A Ltd. under the provisions of the Companies Act, 2013:
(i) The Registered office is shifted from Thane (Local Limit of Thane District) to Dadar
(Local limit of Mumbai District), both places falling within the jurisdiction of the Registrar
of Mumbai, by passing a special resolution but without obtaining the approval of the
Regional Director.
(ii) The Registered office is situated in Mumbai, Maharashtra (within the jurisdiction of the
Registrar, Mumbai, Maharashtra State) whereas the Corporate Office is situated in Pune,
Maharashtra State (within the jurisdiction of the Registrar, Pune). A Ltd. proposes to
shift its corporate office from Pune to Mumbai under the authority of a Board resolution.
(iii)The registered office situated in certain place of a city is proposed to be shifted to
another place within the local limits of the same city under the authority of Board
Resolution.
[5 marks]
Question 4:
Mr. Bindra is holding 950 equity shares of Bio safe Herbals, a section 8 company. Bio safe
Herbals is planning to declare dividend in the Annual General Meeting for the Financial Year
ended 31-03-2020. Examine whether the act of the company is in accordance with the
provisions of the Companies Act, 2013.
[4 marks]
 Multiple Choice Questions

1. Green Ltd. is incorporated on 3rd January, 2022. As per the Companies Act, 2013, what will be
the financial year for the company:
(a) 31st March, 2022
(b) 31st December, 2022
(c) 31st March, 2023
(d) 30th September, 2023
[2 marks]
2. N Limited having 153 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 3 years of business, 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:
(a) The company can alter its MOA by passing an OR and obtaining the confirmation of the
RD.
(b) The company can alter its MOA by passing an SR at the shareholders meeting.
(c) The company can alter its MOA in relation to the objects clause by passing an SR at the
shareholders meeting and obtaining the confirmation of the RD.
(d) The co. can alter its MOA in relation to the objects clause by passing an SR at the
shareholders meeting and simultaneously publishing the contents of the SR in two
newspapers (one in English and the other one in vernacular language) circulating in that
area. [2 marks]
3. Mr. Dev wants to incorporate a Private Limited company, he wants to keep his company’s name
Growskillz Edutech Pvt Ltd. Now Mr. Dev has a query that for how many days he can reserve
this name so that this name is not taken by anyone else-
(a) 20 days from date of approval
(b) 7 days from date of approval
(c) 60 days from date of approval
(d) 90 days from date of approval [2 marks]
4. “Associate company”, in relation to another company, means a company in 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. Here, the words ‘significant
influence’ means:
(a) Control of at least 10% of total voting power
(b) Control of at least 15% of total voting power
(c) Control of at least 20% of total voting power
(d) Control of at least 25% of total voting power [2 marks]
5. Which among the following company is not required to include Cash Flow Statement in its
Financial Statements:
(a) Private Limited company
(b) Small Company
(c) Company registered under Section 8
(d) Producer Company [2 marks]

6. Financial statement in relation to a company do not include:

(a) Cash Flow Statement
(b) Funds Flow Statement
(c) Statement of changes in Equity
(d) Explanatory note annexed to financial statement
[2 marks]
 CA Inter – Corporate and Other Law
Chapter – Share Capital and debentures

Total marks – 30 Time – 90 mins

Learn Law with CA Shubham Singhal – The Ranker’s Way

Question 1:
The Directors of Mars Motors India Ltd. desire to alter Capital Clause of the Memorandum of Association
of their company. Advise them about the ways in which the said clause may be altered under the provisions
of the Companies Act, 2013. (5 marks)

Question 2:
Trisha Data Security Limited was incorporated just a year ago with a paid- up share capital of Rs 200
crore. Within such a small period of about year in operation, it has earned sizeable profits and has topped
the charts for its high employee-friendly environment. The company wants to issue sweat equity to its
employees. A close friend of the CEO of the company has told him that the company cannot issue sweat
equity shares as minimum 2 years have not elapsed since the time company commenced its business. The
CEO of the company has approached you to advise about the essential conditions to be fulfilled before the
issue of sweat equity shares especially since their company is just about a year old. (4 marks)

Question 3:
The Authorized share capital of SSP Limited is Rs. 5 crore divided into 50 Lakhs equity shares of Rs. 10
each. The Company issued 30 Lakhs equity shares for subscription which was fully subscribed. The
Company called so far Rs. 8 per share and it was paid up. Later on the Company proposed to reduce the
Nominal Value of equity share from Rs. 10 each to Rs. 8 each and to carry out the following proposals:
(i) Reduction in Authorized Capital from Rs. 5 crore divided into 50 Lakhs equity shares of Rs.
10 each to Rs. 4 crore divided into 50 Lakhs equity shares of Rs. 8 each
(ii) Conversion of 30 Lakhs partly paid up equity shares of Rs. 8 each to fully paid up equity
shares of Rs. 8 each there by relieving the shareholders from making further payment of
Rs. 2 per share.
(iii) State the procedures to be followed by the Company to carry out the above proposals under
the provisions of the Companies Act, 2013 (5 marks)

Question 4:
London Limited, at a general meeting of members of the company, passed an ordinary resolution to buyback
30 percent of its equity share capital. The articles of the company empower the company for buyback of
shares. Explaining the provisions of the Companies Act, 2013, examine: A. Whether company's proposal is
in order? B. Would your answer be still the same in case the company instead of 30 percent, decides to
buy-back only 20 per cent of its equity share capital? (4 marks)
 Question 5:
State the legal provisions in respect of ‘Declaration of Solvency’, which an unlisted public company needs to
adhere to while taking steps to buy-back its own shares. (3 marks)

Question 6:
What are the provisions of the Companies Act, 2013 relating to the appointment of ‘Debenture Trustee’ by
a company? Whether the following can be appointed as ‘Debenture Trustee’:
(i) A shareholder who has no beneficial interest.
(ii) A creditor whom the company owes Rs. 499 only.
(iii) A person who has given a guarantee for repayment of amount of debentures issued by the
company? (5 marks)

Question 7:
Shilpi Developers India Limited owed to Sunil Rs 10,000. On becoming this debt payable, the company
offered Sunil 100 shares of Rs 100 each in full settlement of the debt. The said shares were allotted to
Sunil as fully paid-up in lieu of his debt. Examine the validity of this allotment in the light of the provisions
of the Companies Act, 2013. (4 marks)
 CA Inter – Corporate and Other Law

Test – Prospectus & Allotment of Securities

Total marks – 25
Time – 60 mins
Learn Law with CA Shubham Singhal – The RankerÕs Way
Question 1:
Explain various instances which make the allotment of securities as irregular allotment under
the Companies Act, 2013.
[4 marks]
Question 2:
Prakhar Ltd. intends to raise share capital by issuing Equity Shares in different stages over
a certain period of time. However, the company does not wish to issue prospectus each and
every time of issue of shares.
Considering the provisions of the Companies Act, 2013, discuss what formalities Prakhar Ltd.
should follow to avoid repeated issuance of prospectus?
[4 marks]
Question 3:
CDS Ltd. is planning to make a private placement of securities. The Managing Director arranged
to obtain a brief note from some source explaining the salient features of the issue of private
placement that the Board of Directors shall keep in mind while approving the proposal on this
subject. The brief note includes, inter alia, the information / suggestions on the following
points:
(i) A private placement shall be made only to a select group of identified persons not
exceeding 200 in a financial year.
The aforesaid ceiling of identified persons shall not apply to the offer made to the
qualified institutional buyers but is applicable to the employees of the Company who will
be covered under the Company's Employees Stock Option Scheme.
(ii) The offer on private placement basis shall be made only once in a financial year for any
number of identified persons not exceeding 200.
The Company solicits your remarks on the points referred above as to whether they are valid
or not? Reasoned remarks should be given in accordance with the provisions of the Companies
Act, 2013.
[5 marks]
Question 4:
The Board of Directors of Plum Limited proposes to issue a prospectus inviting offers from the
public for subscribing to the equity shares of the company. State the reports which shall be
included in the prospectus for the purposes of providing financial information under the
provisions of the Companies Act, 2013.
[4 marks]
Question 5:
Modern Jewelry Ltd decides to pay 5% issue price of shares as underwriting commission to
the underwriter, but the articles of the company authorize only 4% underwriting commission
on shares. Examine the validity of the above decision under the provision of the Companies
Act, 2013.
[4 marks]
Question 6:
How does the Companies Act, 2013 regulate and restrict the following matters in respect of
a company going for public issue of shares:
(i) Minimum Amount stated in the Prospectus; and
(ii) Application Money payable on shares.
[4 marks]