Downloaded From www.castudynotes.

com
Mock Test Paper - Series I: July, 2024
Date of Paper: 30th July, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks)
Part I is compulsory
Case Scenario 1
GlobalTech Pvt. Ltd., a technology giant with operations in software development,
hardware manufacturing, and IT consulting, has recorded significant financial
growth over the past few years. For the financial year 2023-2024, the company
reported the following financial metrics:
 Net worth: ` 520 crore
 Turnover: ` 1,050 crore
 Net profit: ` 4.5 crore
In the financial year 2022-2023, GlobalTech Pvt. Ltd. had a net worth of ` 480 crore,
a turnover of ` 1,020 crore, and a net profit of ` 4 crore. The company has a
subsidiary, TechSubs Ltd., and a foreign subsidiary, GlobalTech International,
which has a branch office in India.
GlobalTech Pvt. Ltd. spent ` 1.2 crore on various CSR activities during the financial
year 2023-2024. However, ` 30 lakh remained unspent and was transferred to the
Unspent Corporate Social Responsibility Account as per section 135(6) of the
Companies Act, 2013.
The company’s board comprises members from different parts of the country and
they ensure that the administrative overheads do not exceed the prescribed limit of
total CSR expenditure.
The company held its annual general meeting on 20 th August, 2024 and filed the
annual return in compliance with the provisions of the Companies Act, 2013.
On the basis of above facts and by applying applicable provisions of the Companies
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of
four) of the following Multiple Choice Questions (MCQs 1-6) given herein under: -
1. Based on the financial metrics of GlobalTech Pvt. Ltd., is the company
required to constitute a Corporate Social Responsibility (CSR) Committee for
the for the financial year 2023-2024?
1
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
(a) Yes, because its net worth exceeds ` 500 crore.
(b) No, because it has not met the required net profit criteria.
(c) Yes, because its turnover exceeds ` 1,000 crore.
(d) No, because its net profit is less than ` 5 crore.
2. Given that GlobalTech Pvt. Ltd. has ` 30 lakh in its Unspent Corporate Social
Responsibility Account, which of the following statements is true?
(a) The company is not required to constitute a CSR Committee if it has
unspent CSR funds.
(b) The company must constitute a CSR Committee in Financial year
2024-2025, as it has balance in Unspent CSR account.
(c) The company can use the unspent funds for any other business activity.
(d) The company must transfer the unspent amount to the Prime Minister's
National Relief Fund.
3. If GlobalTech Pvt. Ltd. had an average net profit of ` 5 crore over the past
three immediately preceding financial years, what is the minimum amount it
must spend on CSR activities in the financial year 2024-2025?
(a) ` 5 lakh
(b) ` 10 lakh
(c) ` 20 lakh
(d) ` 30 lakh
4. GlobalTech Pvt. Ltd. must ensure that the administrative overheads do not
exceed a certain percentage of the total CSR expenditure. What is this
percentage?
(a) 2%
(b) 5%
(c) 10%
(d) 15%
5. What is the latest date by which GlobalTech Pvt. Ltd. must it file its annual
return with the Registrar of Companies (RoC)?
(a) 10th September 2024
(b) 15th September 2024
(c) 10th October 2024
(d) 19th October 2024
Case Scenario 2
GreenLeaf LLP is a limited liability partnership engaged in the business of eco-
friendly product manufacturing. The LLP was initially established with three
partners: Priya, Sameer, and EcoCorp Ltd., a corporate entity. Priya and Sameer

2
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
are the designated partners, with Priya being a resident in India. EcoCorp Ltd. has
appointed Anil, an individual, as its nominee to act on its behalf.
After a few years, Sameer decides to retire, leaving Priya and EcoCorp Ltd. as the
remaining partners. Due to some administrative oversight, GreenLeaf LLP
continues its operations without appointing a new partner. This situation persists
for seven months, with Priya being aware of the reduced number of partners. During
this period, GreenLeaf LLP enters into several contracts and incurs significant
financial obligations.
On the basis of above facts and by applying applicable provisions of the Limited
Liability Partnership Act, 2008, and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 6-8)
given herein under:
6. Given that Sameer retired and GreenLeaf LLP continued with only Priya and
EcoCorp Ltd., what should GreenLeaf LLP have done within six months to
comply with the LLP Act?
(a) Dissolved the LLP
(b) Continue operating with one designated partner
(c) Appoint at least one body corporate which should be a foreign company
(d) Appointed at least one more partner who should also be a designated
partner, as every LLP should have at least two designated partners
7. According to the Limited Liability Partnership Act, 2008, choose the correct
statement in relation to who must be a resident in India among the designated
partners?
(a) At least one individual designated partner shall be resident in India
(b) All designated partners shall only be resident in India
(c) It is mandatory for only corporate partners to be resident in India
(d) At least four designated partners shall be resident in India
8. In the given case scenario suppose EcoCorp Ltd. also leaves the LLP and the
LLP continues business for more than six months with only one partner, who
is personally liable for the obligations incurred during that period?
(a) Priya
(b) Both Priya and EcoCorp Ltd.
(c) EcoCorp Ltd.
(d) Priya, Sameer and EcoCorp Ltd.
9. Lavender International Entertainment Inc., headquartered and registered in
New York City and a prominent name in lifestyle audio innovations,
professional audio and lighting solutions, and digital transformation, is present
in more than seventy countries including India. Due to certain mis-
happenings, the company was unable to file its financial statements along with
necessary documents for the year 2023 with the Registrar of Companies (in
India) within the stipulated time as permitted by the Companies Act, 2013. It
3
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
is observed that the ROC may, for any special reason and on an application
made in writing by Lavender International Entertainment, extend the ‘filing
time’ maximum up to a certain period. From the following options, choose the
correct one in this respect:
(a) ‘Filing time’ in respect of filing of financial statements along with
necessary documents by Lavender International Entertainment Inc. can
be extended by ROC maximum by one month beyond the stipulated time
period.
(b) ‘Filing time’ in respect of filing of financial statements along with
necessary documents by Lavender International Entertainment Inc. can
be extended by ROC maximum by two months beyond the stipulated
time period.
(c) ‘Filing time’ in respect of filing of financial statements along with
necessary documents by Lavender International Entertainment Inc. can
be extended by ROC maximum by three months beyond the stipulated
time period.
(d) ‘Filing time’ in respect of filing of financial statements along with
necessary documents by Lavender International Entertainment Inc. can
be extended by ROC maximum by six months beyond the stipulated time
period.
10. The Board of Directors Vishvas Ltd. decide to pay 5% of the issue price of
shares as underwriting commission to the underwriters. However, the Articles
of Association of the company permit only 3% commission. What is the
maximum amount of underwriting commission that can be paid to the
underwriters.
(a) 2%
(b) 3%
(c) 5%
(d) No limit has prescribed under the Companies Act, 2013 in case
underwriting commission is to be paid in case of issue of shares.
Case Scenario 3
Amit, an Indian resident during the Financial Year (FY) 2021-2022, decided to
pursue higher studies in Biotechnology in Switzerland. On 15th July 202 2, he left
India to begin his two-year academic program. The determination of Amit’s
residential status under the Foreign Exchange Management Act (FEMA), 1999, for
the Financial Years 2022-2023 and 2023-2024, is crucial to understand his
obligations and entitlements concerning foreign exchange transactions.
In terms of financial requirements, Amit needs USD 25,000 annually to cover his
tuition fees. Additionally, he requires USD 30,000 annually for incidental expenses
and living costs while studying abroad. Thus, his total annual requirement amounts
to USD 55,000, making it imperative to assess the provisions under the Foreign
Exchange Management Act, 1999, that govern the remittance of foreign.

4
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
On the basis of above facts and by applying applicable provisions of the Foreign
Exchange Management Act, 1999, therein, choose the correct answer (one out of
four) of the following MCQs (11-13) given herein under:
11. What would be Amit’s residential status for FY 2022-2023 under FEMA, 1999?
(a) Resident in India
(b) Non-Resident Indian (NRI)
(c) Person of Indian Origin (PIO)
(d) Overseas Citizen of India (OCI)
12. What would be Amit’s residential status for FY 2023-2024 under FEMA, 1999?
(a) Resident in India
(b) Non-Resident Indian (NRI)
(c) Person of Indian Origin (PIO)
(d) Overseas Citizen of India (OCI)
13. Suppose now Amit wants more money for his living cost abroad. What is the
maximum amount that can still be remitted abroad per financial year under
the Liberalized Remittance Scheme (LRS)?
(a) USD 100,000
(b) USD 195,000
(c) USD 200,000
(d) USD 500,000
14. ABC Real Estate Ltd., a prominent real estate company, has recently acquired
a piece of land in a suburban area. The land has a small lake that is expected
to generate significant tourism revenue in the future. Additionally, the land has
several old structures that are permanently fastened to the earth, such as a
stone pavilion and a historical monument. ABC Real Estate Ltd. plans to
develop the area by refurbishing the existing structures and enhancing the
natural surroundings to attract tourists.
Considering the above scenario, identify which of the following components
are classified as "Immovable Property" under the General Clauses Act, 1897:
(a) Only the land and the stone pavilion.
(b) Only the land and the benefits arising from the lake.
(c) The land, benefits arising from the lake, and the stone pavilion.
(d) The land, the benefits arising from the lake, the stone pavilion, and the
historical monument.
15. The Ministry of Transport is planning to construct a new highway that will
connect City A and City B. According to the initial plan, the highway is
expected to cover a distance of 150 kilometers. During the survey, the
engineers measure the distance between the two cities as the crow flies,
without considering the natural terrain and existing road curves. This method
5
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
is in line with the provisions of the General Clauses Act, 1897 regarding the
measurement of distance for the purposes of any Central Act or Regulation.
Considering the above scenario, which statement is correct about the
measurement of distance as per the General Clauses Act, 1897?
(a) The distance should be measured along the existing roadways and
curves.
(b) The distance should be measured considering the natural terrain and
obstacles.
(c) The distance should be measured in a straight line on a horizontal plane
unless otherwise specified.
(d) The distance should be measured as a combination of straight lines and
natural curves.

PART – II Descriptive Questions (70 Marks)

Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) ABC Limited is a registered public company having the following:
i Directors and their Relatives 20
ii Employees 15
iii Ex-Employees (Shares were allotted during 20
employment)
iv Members holding shares jointly (10 shares x 2 joint- 20
holders each)
v Other Members 150
The Board of Directors of ABC Limited proposes to convert the company
into a private limited company. Referring the provisions of the
Companies Act, 2013, advise:
i. Whether the company can be converted into a private company?
ii. Whether existing number of members need to be reduced for the
proposed conversion into a private company? (5 Marks)
(b) Sunday Ltd. is a listed entity engaged in the business of providing
engineering solutions to clients across the country. The company
followed consistent growth over the years. Rate of Declaration of
dividend in immediately preceding three financial years were 15%, 20%,
and 25%.
Unfortunately, due to obsolescence of a special part of machinery,
company incurred losses in current financial year.
Even though, during the financial year 2023-24, the company declared
interim dividend of 10% on the equity shares.

6
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
The Board of Directors of the company approved the financial result for
the financial year 2023-24 in its meeting held on 5th August, 2024, and
recommended a final dividend of @15% in this board meeting.
The general meeting of the shareholders was convened on 31st August,
2024. The shareholders of the company demanded that since interim
dividend @10% was declared by the company, so the final dividend
should not be less than 20%. It was also submitted that rate of
declaration of dividend in immediately preceding three years were 15%,
20% and 25%, but the Company Secretary emphasised that final
dividend cannot be increased.
Advise whether the decision of Company Secretary is correct? What
should be correct rate of final dividend?
Justify your answer with reference to provisions of the Companies Act,
2013. (5 Marks)
(c) Analyse the below mentioned situation in the light of the provisions of
the Foreign Exchange Management Act, 1999.
(i) Mr. Vinod has won a big lottery and wants to remit US Dollar 20,000
out of his winnings to his son who is in Singapore.
(ii) Mr. Shyam requires US Dollar 5,000 for remittance towards hiring
charges of transponders. (4 Marks)
2. (a) Explain the meaning of Crystallization of a Floating Charge. (5 Marks)
(b) Define the term ‘Book of account’ as per the Companies Act, 2013.
(5 Marks)
(c) Define the following with reference to the provisions of the General
Clauses Act, 1897:
(i) Measurement of Distances
(ii) Duty to be taken pro rata in enactments (4 Marks)
3. (a) Explain the exceptions to the Doctrine of Indoor Management.
(5 Marks)
(b) Prateek Limited, an unlisted company, registered in the State of
Arunachal Pradesh with 42 shareholders, wants to organize the Annual
General Meeting of the company on 13th August 2024 which happens to
be Raksha Bandhan, a day declared as a holiday by the Government of
Arunachal Pradesh.
Advise the company on the feasibility of the above with reference to the
provisions of the Companies Act, 2013. (5 Marks)
(c) Explain the Doctrine of Contemporanea Expositio. (4 Marks)
4. (a) Assess the eligibility of the following individuals for appointment as
Auditors in accordance with the regulations outlined in the Companies
Act, 2013:
7
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
(i) Chintamani is a practicing Chartered Accountant, and his spouse,
Chitralekha, holds securities of Nagmani Ltd. valued at a face value
amount of ` 80,000 (with a market value of ` 50,000). The directors
of Nagmani Ltd. are considering the appointment of Chintamani as
an auditor for the company.
(ii) Mani, the real sister of Mr. Priyanshu, a Chartered Accountant,
holds the position of CFO at Parivar Ltd. The directors of Parivar
Ltd. are considering the appointment of Mr. Priyanshu as an auditor
for the company. (5 Marks)
(b) Define the term ‘Small limited liability partnership’ as per the provisions
of the Limited Liability Partnership Act, 2008. (5 Marks)
(c) When can the Preamble be used as an aid to interpretation of a statute?
(4 Marks)
5. (a) Priya, Smita, Shilpa, and Shefali were partners in Sharma & Associates
LLP. Shilpa resigned from the firm effective 7th May 2024. However,
neither Sharma & Associates LLP nor Shilpa informed the Registrar of
Companies about her resignation. Is Shilpa still liable for any losses
incurred by the firm from transactions entered into after 7th May 2024?
Analyze this situation with reference to the provisions of the Limited
Liability Partnership Act, 2008. (5 Marks)
(b) Vishal Ltd., an unlisted company, has been directed by the Central
Government to prepare periodical financial results and undergo a limited
review of these results. The Board of Directors is objecting, arguing that,
as an unlisted entity, they are not required to prepare periodical financial
results. Analyze this situation with reference to the relevant provisions
of the Companies Act, 2013. (5 Marks)
(c) In 2022, the Central Government enacted the "Digital Communications
Act" to regulate and manage digital communications across the country.
The Act provides specific duties and responsibilities for the Director of
Digital Communications, including the oversight of digital infrastructure,
enforcement of regulations, and ensuring compliance with data
protection standards.
In 2023, the Director of Digital Communications, Mr. Arjun Patel, was
appointed to lead the implementation of this Act. However, in January
2024, Mr. Patel took a medical leave of absence for six months. During
his absence, Ms. Priya Sharma, the Deputy Director of Digital
Communications, was lawfully assigned to perform the duties of the
Director.
While Mr. Patel was on leave, a major data breach incident occurred
involving a significant violation of the Digital Communications Act.
Ms. Sharma took immediate action to investigate the breach, enforce
penalties, and implement new compliance measures to prevent future
incidents.

8
Join Us on Telegram http://t.me/canotes_ipcc
 Downloaded From www.castudynotes.com
The actions taken by Ms. Sharma, while performing the duties of the
Director, led to a legal challenge. The opposing party argued that only
the Director, as specified in the Act, had the authority to enforce such
penalties and measures, and that Ms. Sharma's actions were not valid.
Analyze the validity of Ms. Priya Sharma's actions in the context of the
General Clauses Act, 1897, considering the provisions related to ‘Official
chiefs and subordinates’. (4 Marks)
6. (a) Enumerate the persons who are entitled to receive the Notice of the
General Meeting, as per the provisions of the Companies Act, 2013.
(5 Marks)
OR
(a) Enumerate the provisions of the Companies Act, 2013 in respect to the
following:
(i) Time limit for filing of annual return when Annual General Meeting
is held.
(ii) Time limit for filing of annual return when Annual General Meeting
is not held. (5 Marks)
(b) Explain the provisions of the Companies Act, 2013 [read along with the
Companies (Registration of Foreign Companies) Rules, 2014] in respect
of ‘Audit of accounts of foreign company’. (5 Marks)
(c) Explain the meaning of term ‘currency’ as per the provisions of the
Foreign Exchange Management Act, 1999. (2 Marks)
(d) Define the term ‘Official Gazette’ as per the provisions of the General
Clauses Act, 1897. (2 Marks)

9
Join Us on Telegram http://t.me/canotes_ipcc