law mcq

THIRD EDITION
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TOPICS PAGE NUMBER
SEBI Act, LODR, Insider Trading Regulations- 4-7
imp topics, case study repeated questions
SEBI Act, LODR, Insider Trading Regulations- 7-9
SHORT QUESTION & ANSWERS
FEMA- imp topics, case study repeated questions 9
FEMA- SHORT QUESTION & ANSWERS 10-13
FCRA 14-15
IBC- imp topics, case study repeated questions 15-16
IBC- SHORT QUESTION & ANSWERS 16-18
COMPANIES ACT (imp topics, case study 19-20
repeated questions)
COMPANIES ACT - SHORT QUESTION & 21-28
ANSWERS
INVESTIGATION 29
OPRESSION AND MM 29
WINDING UP 30
MISCELLANEOUS 31
NCLT 31
3
Page

SEBI
TELEGRAM CHANNEL LINK: https://t.me/+Wz2tQQHHqSJlZmVl
1. Penalty on Stockbroker for excess charges

➢ Min ₹1L
Max. 5x excess brokerage charged
2. Penalty on Stockbroker for non-delivery /non payment
➢ Min 1L
Max. 1L/day (Upto ₹1 cr)
3. Insider Penalty
➢ Min ₹10L
Max. Higher of ₹25cr or 3x profit made
4. Intimation to SE before of BOD meeting in case of alteration of share-holders rights
➢ 11 days
5. Filing of investor grievances within
➢ 21 days
6. LODR: No. of ID required on board of listed co. if chairperson is NED who is related to promoter
➢ 1/2
7. LODR: What does "related to promoter" means in case of listed company
➢ Director (Not ID), Employee, Nominees
8. LODR: Quorum for BOD in case of Top 2000 listed companies

➢ 6 Directors
Other Important Topics
1. Must all Refer Penalty have given in page 7 of this compiler
2. Must read days limit in LODR
Question 1: Penalty for Insider Trading
Case Study: A CA, who is an auditor of DEF Ltd., learns of significant unpublished price-sensitive information
(UPSI) about the company. He passes this information to his friends before it is made public.
Question: Determine if this action constitutes insider trading and state the penalty as per SEBI (Prohibition of Insider
Trading) Regulations, 2015.
Answer: Yes, this action constitutes insider trading. The auditor has accessed unpublished price-sensitive
information (UPSI) and passed it to others for trading purposes. The penalty for insider trading can include
imprisonment up to 10 years and/or a fine up to INR 25 crores or three times the amount of profits made out of insider
trading, whichever is higher.
Question 2: Actions SEBI Can Take Against Insider Trading
Case Study: A person is found guilty of insider trading. What actions can SEBI take against them? Options:
I. Impose penalties.
II. Debar from holding directorial positions.
III. Initiate prosecution.
4
IV. All of the above.

Page
Answer: All of the above.

Question 3: IPO Related Question on Net Tangible Assets
Case Study: For a company to be eligible to make an Initial Public Offering (IPO), what should be the minimum net
tangible assets and net-worth?
Answer: For a company to be eligible to make an Initial Public Offering (IPO), it must have net tangible assets of not
less than INR 3 crores & net worth of at least 1 crore in each of the preceding three full years, as per SEBI guidelines
Question 4: LODR - Independent Directors and Quorum

Case Study: A public listed company is required to have a certain number of Independent Directors (IDs) on its board
as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations. Additionally, determine the quorum
required for a board meeting.
Answer: As per the SEBI LODR Regulations, a public listed company is required to have at least one-third of its board
as Independent Directors (IDs). For quorum, at least one-third of the total strength of the board or two directors,
whichever is higher, should be present, including at least one Independent Director if required.
Question 5: SEBI - Brokerage Charges and Penalty
Case Study: Question: What penalties can SEBI impose on the stockbroker for this violation?
Answer: If a stockbroker violates SEBI regulations regarding brokerage charges, SEBI can impose penalties such
as:
• Rs. 1 lakh up to Rs. 1 crore
• Rs. 1 lakh + Rs. 1 lakh/day up to Rs. 1 crore
• 5 times the amount of brokerage charged in excess of the specified brokerage
Question 6: SEBI - Price Offer to Anchor Investors

ABC Ltd. is planning to make a public issue and is considering offering shares to anchor investors. As per SEBI
regulations, what should be the price offer to anchor investors? The options are:
I. Same as the public offer price or not less than 5% Same as the public offer price
II. Not less than 10% more than the public offer price
III. None of the above
Answer: As per SEBI regulations, the price offered to anchor investors should be the same as offered to the public.
Question 7: Penalty for SEBI Insider Trading
Case Study: ABC Ltd.'s senior executive was found guilty of insider trading. The Securities and Exchange Board of
India (SEBI) has decided to impose a penalty on the individual.
Question: What is the minimum penalty for insider trading as per SEBI regulations? Options:
A. INR 10 lakhs
B. INR 25 lakhs
C. INR 1 crore
D. INR 10 crores
Answer: A. INR 10 lakh
Question 8: SEBI Quarterly Compliance Dates for Listed Companies
Case Study: PQR Ltd., a listed company, is preparing its quarterly compliance report for submission to SEBI. Question:
By what date must the quarterly compliance report be submitted to SEBI?
Options:
A. Within 15 days of the quarter end
B. Within 30 days of the quarter end
C. Within 45 days of the quarter end
D. Within 60 days of the quarter end
5
Answer: C. Within 15 days of the quarter end

Page
Note: Annual compliance report to be submitted within 6 months from the end of financial year.
Question 9. Adjustment of issue price
Case Study: XYZ Limited, a publicly listed company, is planning a new share issue to raise capital for its upcoming
projects. The company initially set the issue price based on market conditions and regulatory guidelines. However,
due to recent market volatility, XYZ Limited is considering adjusting the issue price to make the shares more
attractive to potential investors. The company wants to understand the regulatory requirements and constraints on
adjusting the issue price after it has been initially set. The management is particularly concerned with the time frame
within which these adjustments can be made, especially in terms of upward and downward adjustments What are
the regulatory guidelines regarding the adjustment of the issue price after it has been initially set?
Answer: The company can adjust the issue price both upward and downward within 3 days.
OTHER Questions
1. Penalty for SEBI Insiders trading?
Answer: Any insider shall be liable to a penalty which shall not be less than ten lakh rupees but which may
extend to twenty-five crore rupees/three times the amount of profits made out of insider trading, whichever
is higher.
2. Max no. of Committee In which Directors can be part of?
Answer: Maximum 10 Committees (Chairman of Max 5 Committees)
3. Who has the power to remove members of SEBI?
Answer: Central Government
4. SEBI Quarterly compliance dates for Listed co.?
Answer: Refer Page 1.56 of ICAI Mat
5. Days limit on change in shareholders, right?

Answer -11 DAYS
6. Who can remove member of SEBI Board, Age eligibility, notice of resignation.
Answer: CG can remove, 65 years maximum age, at least 3 months’ notice of resignation.
7. Penalty for unfair trade practices?

Answer: If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be
liable to a penalty which shall be higher of –
(i) not be less than five lakh rupees but
(ii) which may extend to twenty-five crore rupees or three times the amount of profits made out of such
practices
8. ICDR minimum application amount to be specified?

Answer: Refer page 1.117 of ICAI mat
9. IPO to be open for Min & max time limit?

Answer- Min 3 working days, Max 10 working days
10. When a company is eligible for IPO?

Answer: Net tangible asset of at least 3 crores out of which not more than 50% are monetary assets.
11. Can a company issue IPO if ESOPs are outstanding?

Answer: Yes
12. Minimum assets along with monetary asset limit criteria?

6
Answer: Max monetary Asset – 50% of net tangible asset

Page

13. How to determine share price under Book Building issue?
Answer: The issuer may mention a price or a price band in the offer document (in case of a fixed price
issue) and a floor price or a price band in the red herring prospectus (in case of a book building issue) and
determine the price at a later date before filing the prospectus with the Registrar of Companies.
14. SEBI chairperson age limit and minimum notice period to be served by CP for retirement
Answer: Maximum age of 65 years + notice period of at least 3 months
SEBI Act, LODR, Insider Trading Regulations (New Addition)

Sr Question Answers
No. s
1. Sebi due date for submitting corporate Governance report 21 days
Intimation to SEBI before days of BoD meeting in case of
2. 11 days
alteration of share holders rights
3. Filing of investor grievances within 21 days
4. Prior intimation of Board meeting for buyback 2 days
7
Before how many days one has to intimate to RSE about convening
Page
5. 11 days
BM
if the purpose of BM is to alter Rate of interest of securities
Minimum application value under SEBI (ICDR) Regulations

6. Not less than 25% of issue price
Chairperson of Sebi Can be Removed by whom and for how much CG can remove any time by giving 3
7.
time month notice or salary
prior notice is required
8. Period of Custody of books of account in case of investigation 6month
During inspection/ Investigation, bank account or property can
9. 90 days
attach for
maximum days
10. Confirmation of attachment of Bank Account or property taken from Special Court
11. Validity of appointment of Chairman & members 5 years, Max at the age of 65 year
12. Composition of audit committee in LODR Min 3 member
at least 2/3rd Independent
All financial literate & 1 expert
13. In case of changes to annual report, time limit to report to Stock 48 hours of AGM
exchange
Min ₹1L to Max. 5 times of excess
14. Penalty on Stockbroker for excess charges
brokerage charged
15. Penalty on Stockbroker for non-delivery /non payment Min 1L & 1L/day Upto Max. ₹1 cr
Min ₹10L to Max. Higher of
16. SEBI insider trading penalty
₹25Cr. or 3x profit made
No. of ID required on board of listed co if chairperson is NED who
17. 1/2nd
is
related to promoter
Director (Not ID), Employee,
18. What does "related to promoter" means in case of listed company
Nominees
19. LODR: Quorum for BOD in case of Top 2000 listed companies 6 directors
20. Lockin for Promoters contribution post IPO 20% post capital & for 3 years
Lockin for promoters holding in excess of minimum promoters
21. 1 year
Contribution
22. Min & max no of days for which IPO to be kept open 3 to 10 days
23. Penalty for failure to address grievances Min 1L & 1L/day Upto Max. ₹1 cr
Insider trading disclosures are to be maintained by company for
24. 5yrs
minimum how many years
25. Lead manager to submit post issue report as given in which part &
which schedule along with DD certificate in which format & within report - PART A of sch XVII, DD certf
how many days of allotment? - Form F, 7 days
When issuer shall arrange for CRAs to monitor the usage of issue
26. issue size > 100 crore
proceeds?
27. Grievance redressal - Company filed with RSE a statement giving Yes but Co should give such details
the no of investor complaints remaining unresolved AT THE END AT EACH STAGE of the quarter - like
OF the quarter. Is it right? pending at the beginning, received &
disposed of during the quarter &
pending at the end
28. For a company to be eligible to make an Initial Public Offering 3 Crore in each of 3 preceding years
(IPO), what should be the minimum net tangible assets?
8 Page

29. A person is found guilty of insider trading. What actions can SEBI All of the above
take against them?
a) Impose penalties. b) Debar from holding directorial positions.
c) Initiate prosecution. d) All of the above
30. Case Study: A CA, who is an auditor of DEF Ltd., learns of Yes, this action constitutes insider
significant unpublished price-sensitive information (UPSI) about the trading. Penalty: Rs 10 lakh upto
company. He passes this information to his friends before it is made higher of: 25 crore or 3X profit made
public.
Question: Determine if this action constitutes insider trading and
state the penalty as per SEBI (Prohibition of Insider Trading)
Regulations, 2015.
31. Case Study: ABC Ltd. is planning to make a public issue and is the price offered to anchor investors
considering offering shares to anchor investors. As per SEBI should be the same as offered to the
regulations, what should be the price offer to anchor investors? public.
32. Mr. X is a director in several companies and is also a member of 10 committee

various committees in these companies. He is currently a member of
12 committees across different companies. Question: As per SEBI
regulations, what is the maximum number of committees a director
can be part of?
33. Case Study: SEBI has ordered the attachment of bank accounts of For failure to pay fines
XYZ Ltd. due to non-compliance with regulatory requirements.
Question: Under which circumstances can SEBI attach the bank
accounts of a company?
34. PQR Ltd., a listed company, is preparing its quarterly compliance Within 15 days of the quarter end
report for submission to SEBI. Question: By what date must the
quarterly compliance report be submitted to SEBI?
35. Penaly of Section 15EB, Where Investment/ research analyst failed Min 1L & 1L/day Upto Max. ₹1 cr
to comply regulation
36. Document & Information in Annual Report to be sent to shareholder Not less than 21 days before AGM
37. Is a legal representative of deceased person liable as an heir to legal representatives shall only be
provide for penalty under sec 15H & Insider Trading liable to pay when a penalty has been
imposed before the death of an accused
person
38. How to appoints recovery office to recover claim? Officer of Board empower through
Order
39. Deceased person transferred FD to his son, Car to son's wife and Recovery can be made from: Minor
property to sister. What all can be utilized to pay penalty? child, Son's wife, Son's child, Spouse
other than for adequate consideration
(Major Child not include)
9 Page

FEMA
1. MAMP of ECB raised by mfg. co. for WC purpose of value USD 55 million
➢ 10 yrs.
2. Max ECB USD 750 million limit
3. Sponsorship of Sports activity limit and approval
➢ $100000 - Human Resources Department (Department of Youth Affairs & Sports)
4. Approval of Remittance for membership of P & I Club
➢ Ministry of Finance (Insurance Division)
5. Whether Foreign Office controlled by PRI is PRI/PROI
➢ PRI
6. Limit for Sponsorship of Sports
➢ $100000
1. Ministry Approval Lists

ACTIVITY RESPECTIVE MINISTRY APPROVAL
Cultural Tours Ministry of human resource development
Advertisement exceeding US $10000 Ministry of finance, Department of economic
affairs
Remittance of freight and vessel by PSU Ministry of surface transport
Remittance of membership of P & I club Ministry of finance
Question 1: Maximum Time Limit for Making Interest on Imports

Case Study: While importing any product, what is the maximum time limit for making payment without interest?
Options: 1 year, 2 years, 3 years, 4 years.
Answer: The maximum time limit for making payment for imports without interest is 3 years.
Case Study: A person has come to India for a job. As per FEMA regulations, what is the maximum amount he can
export without permission? The options are INR 244,000, INR 250,000, and INR 278,000.
Answer: As per FEMA regulations, the maximum amount a person can export without permission is INR 250,000.
Question 2: Penalty if Contravened USD 2.5 lacs Limit

Case Study: XYZ Ltd. has contravened the foreign exchange limit by making a payment of USD 3 lakhs without proper
authorization under FEMA.
Question: What is the penalty for contravention of the foreign exchange limit under FEMA? Options:
A. INR 1 lakh
B. INR 5 lakhs
C. Three times the amount involved
D. Ten times the amount involved
10
Answer: C. Three times the amount involved

Page

Question 3: Commission of Real Estate Sale
Case Study: ABC Ltd. has earned a commission from the sale of real estate property to a foreign entity.
Question: Is the commission earned from the sale of real estate to a foreign entity subject to FEMA regulations?
Options:
A. Yes
B. No
C. Depends on the amount involved
D. Only if it exceeds USD 1 lakh
Answer: A. Yes
Question 4: External Commercial Borrowings - MAMP
Case Study: Question: What is the MAMP Startup as per FEMA regulations?
Ans. 3 years
Question: From which source can MAMP (Minimum Average Maturity Period) be raised? Options:
A. ECB
B. Security Sales
C. Borrowing
D. None of the Above
Answer: A. ECB
Question 5: Commission to Agent Abroad Limit

Case Study: ABC Ltd. is planning to pay a commission to an agent abroad for facilitating an export transaction.
According to FEMA regulations, the payment should not exceed the higher of USD 25,000 or 5% of the inward
remittance.
Question: What is the maximum commission ABC Ltd. can pay if the inward remittance is USD 500,000? Options:
A. USD 25,000
B. USD 50,000
C. USD 75,000
D. USD 100,000
Answer: A. USD 25,000
Question 6. Remittance calculation within limits

John, a foreign national, has come to India on a work visa for a job with a multinational company. He earns a
monthly salary of USD 3,000. During his stay, John wishes to remit a portion of his earnings back to his home
country to support his family. He wants to ensure that the remittance does not exceed the regulatory limits set by
the Foreign Exchange Management Act (FEMA) without requiring special permissions. For the purpose of this
case study, the exchange rate is 1 USD = 81.3333 INR.
Answer: John to remit his salary without requiring special permission, the maximum amount is set at INR 250,000.
& Since INR 243,990 is slightly below the limit of INR 250,000, John can remit his entire monthly salary of USD
3,000 without requiring special permission from the authorities.
OTHER QUESTIONS
1. Maximum commission for Real estate sale.
Answer: Commission; per transaction, to agents abroad for sale of residential flats or commercial plots in
India exceeding USD 25,000 or five percent of the inward remittance whichever is more.
2. CG Approval if price money for sports activity is more than specified limit?
Answer: Sports reward 1 lacs USD limit, then CG approval is required
3. Maximum time period of interest payment in case of imports?
Answer: 3 years
11
4. Maximum performance guarantee under FEMA? Answer: 50% of amount of guarantee towards financial
commitment.
Page
5. ODI in real estate is allowed? Answer: NO

FEMA
Sr Question Answers
No.
1. Human Resources Department
Approval from which ministry required in case of (Department of Youth Affairs &
remittance of prize money /sponsorship Sports)
Ministry of Finance (Insurance
2. P&I club threshold limit exceeded - Permission from which
Division)
authority?
Container Detention Charges exceeded - Permission from which Ministry of Surface Transport
3.
authority? (Director General of Shipping)
4. Time taken by AA to dispose complaint from the date of receipt within 1 year
5. ODI to be made from which channel? Bank and Financial Institutions
6. Limit for LRS+CAT $250,000
upto $2000: No time limit
7. Time limit of returning unused forex to Government
above $2000: 180 days
Domestic company purchase commercial or residential building
8. RBI, Indian entity having an
required permission of whom?
overseas office may acquire an
immovable property for business
and residential purpose of staff
along with adhering FEMA
regulation *as per RBI direction*
(ODI rules)
9. Commission to agent O/s India for sale of residential plot in India 5% or $25000 whichever is higher
10. Whether an Indian company can purchase residential property In both cases—residential or
abroad and whether the Indian company can purchase office abroad? commercial property acquisitions
If yes, then with/without permission of RBI. abroad—Indian companies
generally need prior permission
Note: RBI grants permissions based on various factors such as the from the RBI.
purpose of the acquisition, the amount of investment involved, and
compliance with FEMA regulations.
11.
Whether foreign citizen & Indian citizen can purchase residential
Yes
house in abroad without permission of RBI if they both are non-
residents?
12. Case Study: ABC Ltd. has earned a commission from the sale of Yes
real estate property to a foreign entity. Question: Is the commission
earned from the sale of real estate to a foreign entity subject to
FEMA regulations?
13. Case Study: ECB Normally: 3 years
1) MAMP of ECB raised by manufacturing Co for working Capital Manufacturing Co less than
purpose of USD 55 million $50M: 1 year Taken for WC
purpose: 10 years
So, MAMP = 10 years
14. 2) eligible amt of ECB loan $750M
Permitted but refinancing not
15. 3) whether ruppee ECB used for repayment of loan taken in India
Allowed
4) Whether ECB permitted for buying land or engaging in real estate ECB is not permitted for buying
12
16.
activities in India? If permitted, what is the Minimum Average land or real estate activities.
Maturity Period
Page
(MAMP)?
MAMP for ECB raised upto 300 crore for the purchase of P&M? 7 years
17.
18. What exchange rate to be used to convert FCY ECB into INR ECB
at rate prevailing on date of
agreement for such change or at a
rate less (not more) than that
prevailing rate if agreed by lender
19. Sponsorship of Sports activity limit and approval $100000 - Human Resources
Department (Department of
Youth Affairs & Sports)
20. A person resident outside India wishes to invest in real estate in Prior approval from the
India. What are the limits and prior approvals required as per FEMA Reserve Bank of India (RBI) is
regulations? required.
Note: PROI not allowed to do real estate business only investment
allowed
21. Whether Foreign Office controlled by PRI is PRI
PRI/PROI or
Mr. Harsh, residing in India, established ABC Limited and later
opened a branch in Australia named AUS for warehousing
purposes, controlled by him.
What is the residential status of AUS?
22. While importing any product, what is the maximum time limit for 3 years.
making payment without interest? .
23. Mr. Narayana, residing in Australia, wants to purchase a duplex Mr. Narayana must obtain prior
house in India and transferred the required amount to a partnership approval from the Reserve Bank of
firm to facilitate the India (RBI) for transferring funds
purchase. to a partnership firm.
24. Mr. X, a non-resident residing in America, purchased properties in Mr. X must obtain permission from
America. He has now come to India and wants to settle here. He the Reserve Bank of India (RBI) for
intends to sell the properties in America and invest the proceeds in repatriating the sale proceeds and
foreign securities. investing in foreign securities
25. A person has come to India for a job. As per FEMA regulations, INR 250,000.
what is the maximum amount he can export without permission?
26. XYZ Ltd. has contravened the foreign exchange limit by making a 3 times the amount involved. And if
payment of USD 3 lakhs without proper authorization under such sum involved is not
FEMA. quantifiable then 2 lakh penalty
Question: What is the penalty for contravention of the foreign leviable.
exchange limit under FEMA? In this case penalty is 3 times
because the sum involved is
ascertainable/quantifiable.
27. Mr. X sent through authorized dealer $2,80,000 to his daughter for 3 times the amount involved. And if
study. College fee is $1,00,000 w/o approval under LRS scheme. such sum involved is not
Did Mr. X contravene $250000 FEMA rule, if yes then penalty? quantifiable then 2 lakh penalty
leviable.
In this case penalty is 3 times
because the sum involved is
ascertainable/quantifiable.
13
28. • invalid as - The total permissible limit

Estimated foreign education fee $200000 Send for personal expense
under the LRS for an individual is USD
Page
- $60000.Need to guide the sender the limits under FEMA, 1999 250,000 per financial year for all
under Schedule 3 permissible transactions combined
(education fees, personal expenses, etc.).
• hence contravention of act and
penalty 3 times the amount
involved
29. ABC Ltd. is planning to pay a commission to an agent abroad for USD 50,000
facilitating an export transaction What is the maximum commission
ABC Ltd. can pay if the inward remittance is USD 10,00,000?
FCRA
1. Sec 4, Is scholarship provided by foreign university to PRI comes under FC

➢ Yes
2. Sec 14A, If FCRA registration is surrendered, it is deemed to have expired on

➢ date of acceptance by CG.
3. Sec 14A, cooling period for fresh reg. once existing registration is surrendered
➢ 3 years
4. Sec 15, Upon Surrender/Cancellation Whether banking authority can utilize/dispose the assets of
FC.
➢ Yes

1. FC from relatives more than 10Lakh in FY then inform to CG in which form?
Answer: FC-1 & within 3 months
OTHER Questions
1. Reporting of bank of receipt of Foreign Contribution?
Ans: in 48 hrs (if received in Delhi A/c or other a/c and subsequent Transfer to other a/c
2. What is the amount of gift from relative, which is not considered as foreign contribution?
Answer: Market value Upto 1 lakhs
3. Validity of Certificate of registration (COR) of trust?
Answer; 5 years (section 11)
4. Cooling period for which CoR shall not be granted in case of breach of FCRA regulation?
Answer: 3 year (section 14)
5. Is order/direction by CG to banking authority for trust is binding on banking authority?

Ans : Yes
6. Fees for renewal of certificate?

Ans. Rs. 5000
14 Page

FCRA
Sr Question Answers
No. s
Whether Educational Contributions from foreign university to be
1. Yes
Considered as Foreign Contribution
2. Charitable trust applied for registration. Certificate of registration
issued on 15.9.23. It is sent via post. Trust received it on 17.9.23. 14.09.2028 (5 year from the date of
This Reg Certificate is valid upto? issue)
3. Cooling period in case of surrender/cancellation of COR 3 years
4. Certificate of registration valid for 5 years
5. Scholarship received from foreign university Exempt
In case of emergency medical aid of more than 1Lakh then intimate
6. 1 month
to CG within
7. FCRA Account open in which bank for receiving FC SBI, New Delhi
8. Period of Suspension of COR 180 Days (+180 days extended)
9. Renewal of Certificate of Registration within 6month before expiry
10. Person aggrieved from confiscation of FC may appeal to High court within 60 days
11. Fee of compounding or revision of order (only online mode) Rs. 3000
12. Case Study: Y (India) sold goods to X (Singapore). X came to India. X bought a ring in India for RS 90,000.
Y called X for dinner, and X gave that ring to Y. X made payment to Y for the goods, and Y gave a cheque to
X for the travel cost. X took that ring to market for its valuation and it was 1,10000. X's wife is using that ring.
Qs 1. Ring given by X to Y is foreign contribution? Yes. as per its market value it is more
than 1,00,000 and he did the valuation the
same day.
No, as it is payment in normal
Qs 2. Money Paid by X to Y is a foreign contribution.
course for goods and services
No as FH is in cash or kind taken
Qs 3. Is the cheque given by Y Foreign Hospitality?
outside India
Sec 4, Is scholarship provided by foreign university to PRI comes
13. yes
under
FC
Sec 14A, If FCRA registration is surrendered, it is deemed to have
14. Date of acceptance by CG.
expired/effective date of surrender on
Sec 14A, cooling period for fresh reg. once existing registration is
15. 3 years
Surrendered
Sec 15, Upon Surrender/Cancellation Whether banking authority
16. Yes
can
utilize/dispose the assets of FC.
17. Bank shall report receipt of FC to whom to within how many hours? CG (Not RBI) within 48hr
18. Bank report to CG of transaction relating to_ Receipt & utilization of FC
19. Can receive FC only in FCRA Acc - so
A person received 25 lakh FC in FCRA acc in Delhi SBI & then
25 lakhs valid, but 5 lakh violates Act
transferred 10 lakhs to his non FCRA a/c for utilization. He also
and one can transfer money to Non
received 5 lakh FC in his non FCRA a/c with Canara bank. Which
FCRA Acc for utilization. So 10 lakh
of these 3 transactions are violates FCRA Act?
15
valid
Page

20. Mr. X received FC in personal Capacity and used it for Gold Deposit No ,Gold deposit scheme given in question
scheme. Can he use? is run by business man . So it comes under
speculative business.
21. Can religious trust receive donation from foreign source without No, trust receive funds from foreign
FCRA account? sources into their FCRA account only
22. In case of Best Trust, dispose of the
Related to Case Study: What should a bank authority do on the
assets created out of FC; for Great Trust,
direction of the Central Government in case of Best Trust and Great
utilize the FC.
Trust?
IBC (INSOLVENCY AND BANKRUPTCY CODE)
1. Conduct of CoC meeting within of its Constitution

➢ 7 days
2. Voting for appointment of IRP as RP

➢ 66%
3. Date of Insolvency Commencement date

➢ Date of acceptance of application by NCLT
4. voting required for withdrawal of application

➢ 90%
5. How many approvals required for appointment of RP?

➢ COC Approval with 66%
6. within How many days COC should have conduct first meeting?
➢ 7 Days
7. Time limit for approval of Board for RP?

➢ 10 Days
Question 1: IBC - Approval of IBBI for Replacement of IRP
Case Study: In the case of the replacement of an Interim Resolution Professional (IRP), if the approval of the Insolvency
and Bankruptcy Board of India (IBBI) is not received within the stipulated time, what should be the next course of
action? Assume the stipulated time is 10 days.
Answer: If the approval of the IBBI for the replacement of the IRP is not received within 10 days, the existing IRP shall
continue to function until such approval is received.
OTHER QUESTIONS:
1. 1.Financial creditor (FC), before filing application for IBC shall sent application to whom?
Answer: Corporate Debtor
16
2. To which operational creditor (OC)+ notice to be served?

Page
Answer: OC having >= 10% of total outstanding debt can attend meeting but cannot vote
3. If approval of IBBI not received within 10 days in case of replacement of IRP?
Answer: It will be considered as deemed approval
4. Who can be appointed as Provisional liquidator/ Company liquidator?
Answer. Whose name is there in IBBI data base i.e., IP required under IBC
5. Time period to respond for the demand notice sent by OC to the CD under IBC.
Answer: 10 Days
6. Time period for acceptance/rejection of CIRP application by AA under IBC?

Answer :14 Days
7. Maximum time period upto which public announcement shall be made by IRP upon appointment as IRP?
Answer: 3 Days
8. How many creditors consent is required to dispense off the meeting of CoC?
Answer: At least 90% creditors
9. Banking authority to file application for CIRP to whom?
Answer: Adjudicating Authority
10. Question on identification of CL and CD?
IBC
Sr No. Question Answers
s
In how many days public notice to be given after appointment of IRP 3 days
1.
2. Conduct of CoC meeting within of its Constitution 7 days
3. Time limit to file appeal against order of ED 30 days
4. In how many days NCLT accept the admission of application 14 days
5. Approval or disapproval communication by NCLT in 7 days
6. IRP name to be proposed to? NCLT
Deemed approval will be considered if IBBI don't respond in _____ 10 days
7.
8. Eligibility of IRP Same as independent director
9. Quorum of COC 33% of voting right
10. within 180 days+ after passing
resolution of >66%, extension
Time limit of completion of CIRP of 90 days may allowed by AA
mandatory complete in 330
days .
In how many days CD shall bring in notice of dispute after OC 10 days
11.
deliver Demand Notice
Coc decision taken by vote not less than % of voting share of FC 51%
12.
13. Notice period of meeting of COC 5 days
14. Composition of Committee of creditor All FC's only (in case FC not
exist then 18 largest OC, 1
representative each of Workmen
& Employee)
whether Date of acceptance of application by NCLT = Date of Yes
15.
17
Insolvency
Commencement date
Page
16. % voting required for withdrawal of application 90%

17. % Voting for appointment of IRP as RP 66%
18. How many % vote required to replace RP? 66%
On CIRP initiated by FC, tribunal to ascertain existence of default in 14 days
19.
how many days?
There was a related party amongst the FC. Whether that related party No right to participate or vote in
20. is entitled to vote in meeting of CoC? COC meeting
Case Study: GHI Ltd. is undergoing insolvency proceedings, and a Committee of Creditors (CoC)
21. resolution professional needs to be appointed.
Question: Who appoints the resolution professional in an insolvency
case?
In the case of the replacement of an Interim Resolution Professional the existing IRP shall continue
22.
(IRP), if the approval of the Insolvency and Bankruptcy Board of to function until such approval
India (IBBI) is not received within the stipulated time, what should is received.
be the next course of action?
Case Study: JKL Ltd. has filed an insolvency application due to Amount owed for supply of
23. unpaid operational debt owed to various suppliers and service goods and services
providers.
Question: Which of the following qualifies as operational debt under
IBC?
Time limit for completion of PRIP 120 days
24.
Is a foreign creditor required to submit certificate from Institution to No
25. file application to NCLT
Who is Corporate Debtor and Operational Debtor? Identify based on given C.S.
26.
Case Study: JKL Ltd. has filed an insolvency application due to Amount owed for supply of
27. unpaid operational debt owed to various suppliers and service goods and services
providers.
Question: Which of the following qualifies as operational debt
under IBC?
Whose name shall be furnished with the application before the Insolvency Resolution
28. adjudicating authority by financial creditor? Professional
What all is to be included in the application to Tribunal by financial Record or evidence of default
29. creditor? Name of proposed IRP other
info as specified
18
Page

PART-B
COMPANIES ACT
1. Whether a person related to promoter of a company be appointed as ID in that co. or its subsidiary.
➢ Not Allowed
2. Donations to Charitable funds limit calculation
➢ 5% of avg 3 yrs. net profit
3. whether Political contribution can be approved by board through resolution by circulation
➢ Not allowed
4. Non-Executive Managerial Remuneration if Effective capital is Rs.245 crores
➢ ₹24 Lakh (1% of 245 cr.)
5. Can ID be appointed for 3rd term, any cooling period applicable?

➢ Maximum ID director can be appointed for 2 terms. 2ND term appointed by SR after that cooling
period of 3 years applicable
6. Can Sitting fees be paid to Women Director lower than other directors
➢ No
7. Can company pass single resolution for appointment of more than 1 director?
➢ Yes, Unanimous Approval of Board required
8. How many directors can be appointed in single resolution with unanimous approval of Board?
➢ No Limit
9. Board Appoint directors in single resolution with violation of provision of Act? Which is correct
option?
➢ Appointment is rejected. (Note: Board cannot select any one from them to appoint)
1. Remuneration in case of no profit & Effective capital computation (MCQ 4 above)

2. Appointment other than retiring director- Notice, Deposit
3. Disqualification of director
4. Contribution to political party & Charitable Trust
5. Penalty for Not sending notice of General meeting.
6. Provision of circulation voting
Question 1: Calculate Effective Capital
Case Study: ABC Ltd. has the following financial details:
Equity Share Capital: INR 50 crores Preference Share Capital: INR 10 crores Free Reserves: INR 30 crores
Securities Premium: INR 20 crores, Accumulated Losses: INR 5 crores, Preliminary Expenses not written off: INR 2
crores
Question: Based on the above information, calculate the effective capital for determining managerial remuneration as
per the Companies Act, 2013.
Answer: Effective capital is calculated as follows:
19
Paid-up Share Capital: INR 50 crores (Equity) + INR 10 crores (Preference) = INR 60 crores Free Reserves: INR 30
crores, Securities Premium: INR 20 crores, Subtract Accumulated Losses: INR 5 crores, Subtract Preliminary
Page
Expenses: INR 2 crores

Effective Capital = INR 60 crores + INR 30 crores + INR 20 crores - INR 5 crores - INR 2 crores = INR 103 crores
Note: Reserves does not include revaluation reserve while calculating effective capital
Question 2: Calculate Remuneration in Case of Profit

Case Study: XYZ Ltd. has provided the following details:
Net Profit (as per Section 198 of the Companies Act, 2013): INR 200 crores
Managerial Remuneration limit as per Section 197 of the Companies Act, 2013: 11% of the Net Profit Question:
Determine if the provided profit is correct and calculate the permissible managerial remuneration.
Answer:
Net Profit: INR 200 crores
Permissible Managerial Remuneration: 11% of INR 200 crores = INR 22 crores
The provided profit aligns with the calculation under the Act, and the permissible managerial remuneration is INR 22
crores.
Question 3: Calculate Remuneration in Case of Loss

Case Study: PQR Ltd. has incurred a loss and provided the following details:
Effective Capital: INR 50 crores
As per Schedule V of the Companies Act, 2013, the remuneration can be paid up to INR 84 lakhs if effective capital
is between INR 5 crores to INR 100 crores.
Question: Based on the above information, calculate the permissible managerial remuneration.
Answer: Since the effective capital of PQR Ltd. is INR 50 crores, the permissible managerial remuneration as per
Schedule V of the Companies Act, 2013, is INR 84 lakhs.
Question 4: Maximum Number of Directorships
Case Study: A director has the following directorships:

7 public companies
2 unlisted companies
3 private listed companies (out of which some are subsidiaries or holding of public companies)
Question: How many directorships can he accept in public and private companies as per Section 165 of the Companies
Act, 2013?
Answer: As per Section 165 of the Companies Act, 2013:
Maximum directorships in public companies (including subsidiaries of public companies): 10
Maximum directorships in private companies: 20 (excluding the ones which are subsidiaries or holding of public
companies)
Given the director already has 7 directorships in public companies, he can accept up to 3 more directorships in public
companies.
Question 5: First Meeting of BOD of COC

Case Study: The Committee of Creditors (COC) needs to hold its first meeting. What is the maximum allowable time
for holding this meeting after the formation of the COC? Options: 7 days, 14 days, 21 days, 30 days.
Answer: The first meeting of the Board of Directors (BOD) of a Committee of Creditors (COC) should be held within 7
days.
Question 6: Resolution Required by COC for Selecting IRP

Case Study: While selecting an Interim Resolution Professional (IRP), how much resolution is required by the COC?
Answer: The resolution required by the COC for selecting an Interim Resolution Professional (IRP) is 66% of the voting
share.
20
Page

Question 7: Calculate of Profit
Case Study: ABC Ltd. has reported a net profit of Rs 80,20,000 for the financial year. However, this figure includes
an amount received from the sale of old office furniture. The management needs to determine the correct profit as
per Section 198 of the Companies Act, 2013, which involves adjusting for certain specified items. The details
provided are as follows:
Cost of Furniture: 2,00,000 , WDV: 1,00,000, Sale Proceed: 4,50,000, Profit: 3,50,000
77,70000
Q.1 What is the correct amount of Profit?
Calculation: (8020000- {450000-
200000})
Notes: Deduction rule of profit on sale of
fixed asset (except where the business of
company is selling this asset)
1)If selling price less than original cost – do
not deduct
2) If selling price more than original cost-
deduct the difference between selling
price and original cost
Q.2 In the above question assume Sale Proceed of Old
80,50,000
furniture: 70,000 in place of Rs. 4,50,000. What is the correct
amount of Profit? (If fixed asset is sold, excess of WDV over
selling price is not a loss of capital nature)
Company Law
Sr No. Questio Answers
ns
1. Can a SSD eligible for reappointment Not Eligible
2. Can SSD be appointed in a competing business No
3. No. of Companies in which person can hold position of SSD Max. 2 Companies
4. Whether SSD appointed in one company for period of 3 years ad Yes, he can appointed in Maximum 2
he was appointed also in another company for the period of 2 year. companies provided other company
Can he appointed to do so? should not in compete business with first
company
Can a SSD appointed as Human resource manager during the
5. No
cooling period?
6. Is Quorum of Directors should be present in the beginning. No. They should be present throughout
(174) the meeting
7. Section 174, Quorum vs SEBI Quorum of Top 2000 Listed
Normal: 1/3rd or 2 directors
Entity
SEBI: 1/3rd or 3 director including 1 ID
8. Applicability of Secretarial audit (204) Listed;
PUSC>=50Cr;
T/O>=250Cr;
O/s Loan/Borrowing>=100cr
9. Circumstances where Special Notice by members is required Removal of Director & Special
(169) Notice at least 14 days before meeting
Deposit: 1 lakh
21
Is it mandatory for private company to maintain sec 189 register

10. Yes, except when sale/Purchase is up to
even if it complied with AR & FS?
5 lakhs in FY.
Page
Note: Section 189 register means Register of contract in

which director is interested
which resolution pass to increase limit of max no of directors

11. Special Resolution
(more than 15 director)
By which resolution, board can exercise power related to sell,
12. Special Resolution in both cases.
lease, dispose of undertaking of company (180)
Or
A company wishes to dispose of part of its undertaking under two
different schemes: Dispose of 6% undertaking and dispose of 22%
undertaking under a compromise scheme.
13. Can director hold excess remuneration without necessary Yes & hold it in trust of Company
approval?
14. Approval regarding borrowing by director. (185) Member's Special Resolution
15. When RBC (Resolution by circulation) considered as deemed Approved by majority of Directors
passed? (175)
>=1/3 of total director require
16. When resolution of RBC put up in meeting? (175)
that resolution decided in
meeting
Whether Political contribution can be approved by board
17. No
through resolution by circulation? (175)
18. Question related to Proportional representation (163) 2/3 and 3 years
19. Penalty on contravention of duties of Directors (166) Rs. 1 lakh to 5 Lakh
20. Penalty if director continue to function when office if vacated Rs. 1 lakh to 5 Lakh
(167)
21. No. of days in which office need to vacated from the date of 30 days
order
No unless 100% vote case in favor for
22. Can 2 or more director be appointed by single resolution in
GM? (162) that resolution
23. Whether appointment of 3 directors via single resolution is Yes, as complied "without any vote being
valid if around 90% of members who were present at meeting case against it"
voted in favor & balance 10 % abstained from voting? (162)
24. Validity of Resolution passed in contravention of sec 162 Void Always
25. Sec 162 applicable to which of these Companies:
a) Sec 8 Co. b) Govt Co., c) Subsidiary of govt co, (d)Pvt co. Section 8 Company
26.
Notice for meeting sent 15 days before date of meeting & it invalid because time limit is 1 month
mentioned the options to vote as - vote by self / proxy - what’s & notice didn't mention option of post
validity of notice? ballot
Whether Waiver of the excess remuneration paid is possible & By passing Special Resolution &
27.
what is the time limit? within 2 Years
Can Company make alteration in MOA which is inconsistent
28. Yes, with leave of tribunal
with alteration already made by tribunal- options
29. Class Action (sec 245) is not applicable to whom? Banking Company
If company removed such employee without getting permission
30. Not valid as the investigation is pending
from tribunal, is the act valid?
NCLT to reply to the application for removal of employee
22
31. 30 days else deemed approval

within how many days
32. Appeal against order of NCLT to whom & within how many To NCLAT within 45 days (+45 days
Page
days? extension)
33. PQR Limited filed with NCLT to terminate an employee during PQR Limited contention regarding no
proceedings. No objections were received within 30 days, and now approval received within 30 days then
the company is debating if they can proceed with the termination. company can proceed to take proposed
action against the employee is correct
34. BCL Limited received an objection from the NCLT under section Company or person concerned may,
218 for taking action against an employee. The company is within a period of 30 days of receipt of
considering appealing the objection notice of objection, prefer an appeal to
NCLAT
Can CFLO be given in case of Removal of MD during Winding
35. No
Up due to default of director
36. Calculation of donations to Charitable funds limit 5% of average 3 year’s net profit
37. Minimum no. of director in Top 2000 listed entities 6 Directors
Mr. A is director of ABC Ltd. Brother of Mr. A holds exactly No, it should be greater than 2 %.
38.
2% of PUSC in another company. Whether another company
is related party to ABC Ltd?
39. Period of custody of Inspection books vested by civil court 180 days
40. Sec 230- How many days in which order of tribunal file with roc 30 days
41. Sec 244, minimum requirement for application to Tribunal- in Having Share Capital: Lower of -
oppression chapter
100 members or 1/10th of total
members; or 1/10th of total issued
capital
Not having share capital: - 1/5th of
total members
Fail to file of financial statements/annual reports for how many 2 Financial Year. Roc gives notice and enter
42.
consecutive years to consider as dormant company name of company in the register of dormant
company
43. Min. No. Of directors in dormant public co 3 Director
44. Form for Getting status of active co. MSC 4
Company didn't have any SAT (ROC fees is not SAT) during
45. Inactive Company
last 2 years. Is it active/inactive/ dormant/defunct company?
ROC to strike-off name of dormant co from register if it remains
46. 5 years
dormant for how many year?
47. Penalty: 50,000
Sec 247 – Registered Valuer penalty in both cases In case of defraud: Jail upto 1 year &
fine: 1 lakh to 5 lakh
Sec 421, No. of days in which Appeal can be made to NCLAT
48. For NCLAT- 45 days
and supreme court
For supreme court (only in question of
law)- 60 days
sec 420, whether rectification can made by NCLT within 2 yrs
49. No, because appeal is preferred
if any appeal is preferred
50. Submission of report by Company Liquidator to tribunal within 60 days
51.
Liability of contributories who transferred partly paid up the company has to duly notify the
shares before 1 yr of WUP amount due on shares/debentures to the
transferee
23 Page

52. Who can be appointed as RV out of 4 options
a). PROI b). imprisoned for 2 months, imprisoned for 2 months
c). imprisoned for 7 months,
d). valuation exam passed beyond 3 yrs related
If the director is removed by a tribunal considered unfit, the
53. Minimum 2 year
period for Disqualification
Whether NR can be a Registered valuer Inspection of company
54. No, only resident in India
Subsidiary
55. Can a Non-Resident person become MD of Indian Company? Yes, with approval of CG
56. No. Of Directors to be retire by rotation 1/3rd out of Rotational Director
Person aggrieved by order of ROC
57. Who can file an application for restoration of name to NCLT
within 3 years
58. Time Limit on AA to admit the application of winding up 90 days
59. who can be contributories in case of winding up (272) Holder of fully paid-up share
Advisory committee constitute how many numbers of members
60. Maximum 12 member
in Winding Up
Cost and expenses of winding up fall in which sequence of First payment: Workmen dues
61.
payment as per winding up
Second payment: Cost & Expense
62. Under compromise, who ordered for the meeting of creditors Tribunal
Objection to compromise raised by a shareholder holding 15% Valid because share holder has 10% or
63.
& creditor holding 9% debt - whether valid? more
& creditor has 5% or more
W.r.t. the manner of utilization of undue gain recovered which Order for repay money to Company in
64.
of these is NOT power of tribunal? which person was employed
65. Tenure of FD Granted by Nidhi Co. 6 months to 60 months
Amount of Loan that can be given by Nidhi Co. if deposit is less
66. 2 lakhs
than 2 Crore
67. Amount of Deposits that can be accepted by Nidhi co. Not more than 20 times of NOF
68. X & Y have shares of Nidhi company jointly in their names
Y, because his name appears
and in the application X name appears first while in the
first in Register of member
register of members Y name appears first. To whom the loan
can be given?
69. Case Study: XYZ Nidhi Company has the following financial
Net Owned Funds: Paid-up Share
details: Paid-up Share Capital: INR 10 crores Free Reserves:
Capital + Free Reserves -
INR 2 crores Accumulated Losses: INR 1 crore Investments in
Accumulated Losses -
other Nidhi Companies: INR 1 crore
Investments in other Nidhi
Question: Based on the above information, calculate the Net Companies NOF: 10 Crore
Owned Funds and Effective Capital. Effective Capital: 11 crore
70. Case Study related to Nidhi Company:
Paid up SC:23Lakh
Free Reserves: 2 Lakh
Assets: 10 Lakh
Deposit accepted till now: 1.5 Cr
Q1: Maximum additional deposit it can further accept Q1: 3.5Cr
Q2. Amount of loan it can be given if deposit of member are Q2: 2Lakh
24
1.5Cr
Page

What a Nidhi co can do?
71.
A) Open savings acc with members
b) Open savings a/c
b) open current a/c with members,
c) accept deposit from non-members,
d) Buy securities of body corporates
72. In case of Nidhi company dividend paid should be not more than 25%
73. Whether a foreign subsidiary of a Co incorporated in India is Resident in India

resident in India or outside India
74. Sec 236, If Minority shareholder offered a price for purchase of Disbursement shall continue for 1 year
share & not disposed within stipulated time, he will able to receive
the amount upto?
75. If the director is removed by a tribunal considered unfit, the period 5 years or less than 5 years as specified.
for disqualification
76. When declaration given by independent director In 1st Board meeting, then first board
meeting of every financial year
77. Who can raise Objection to compromise scheme. Member having>= 10% PUSC or
Note: Creditors include both financial and operational Creditors having O/s debt >=5% of total
creditor. Examiner will ask here creditor means which outstanding debt.
creditor operational, financial or only creditor.
Answer is only creditor
78. Penalty in case of violation of provision of political contribution Co: 5X amount contributed Officer in
(182)? default: Jail 6 Month and 5X amt
contributed
79. Following person can be MD/WTD/Manager B) Not detained under COFEPOSA Act.
a) Subject to imprisonment / fine more than 1000 under COFEPOSA - Conservation of Foreign
prescribed 90 act Exchange and Prevention of Smuggling
b) Not detained under COFEPOSA Act Activities Act
c) Aged more than 70 years without passing SR
d) All of the above
In case of Material Subsidiary, what is requirement for the
80. At least 1 ID shall be appointed
appointment of Independent Director?
Can Charitable Trust contribute Rs. 4,80,000 if it exceeds 5% of
81. Yes, by passing Special Resolution
Average Profit?
As per Sec 197(3), is the sum payable to director exclusive or Exclusive of sitting fee but according to
82.
inclusive of sitting fee? Schedule V
Can MD Claim Compensation if they refuse to join amalgamated
83. No, can’t claim compensation
company?
Whether write off debt and not payment of dividend is oppression
84. No
of member?
Is Directors or employees liable to provide info during
85. Yes, they are liable to provide
Investigation even if they left before?
information
25
86.
An employee is posting on social media about profits of the
Liable under Section 447
company but in reality company in under losses. Liable under
Page
which act?
Yes, audited within 30 days from end of
87. Can Dormant co have auditors & if yes is rotation applicable?
FY & rotation not applicable
Representation of notice of striking off of name by Company to
88. 30 days
ROC within how many days?
89. Case Study from winding up 1) a past member shall not be liable to
How much amount can be realized from the following past contribute if he has ceased to be a
members to pay dues at the time of winding up of co as on 01-04- member for one year or upwards
2023 before the commencement of the
winding up
2) No contribution shall be required from

any past or present member exceeding the
amount, if any, unpaid on the shares in
respect of which he is liable as such
member
90.
A person resident in India earned in foreign as salary to years back.
No permission required
Now he wants to utilize this amount in India, is any permission
required
91. Can IRP maintain bank accounts of Co? Yes
92. Is Investigation under Sec 210 is mandatory? No, until received from tribunal court
93. Who have the power to investigate under 210 Central Government
94. Govt Co. amalgamated into Non govt Co. what is status of New Government Company
Co.?
95. what is legal status of ROC to file for winding up of companies? 30 days
No, RV shall make valuation as per
96. Is RV has to make valuation as per contract?
valuation
Standard
97. The appointment of MD who is ineligible to appoint is Mismanagement
Oppression or Mismanagement?
98. Whether minority Director can claim Oppression by No, only Member can
Majority Director?
99. T Ltd is Listed entity and Wholly Owned Subsidiary of A Ltd, Yes, ID is appointed as it is listed
So whether ID to be appointed or not? company also
100. Case Study: Global Tech Inc., a U.S.-based technology company, seeks to merge with Innovate
Solutions Pvt. Ltd., an Indian software development firm. Both companies see strategic benefits in
this merger, such as expanded market reach and enhanced technological capabilities. However,
during an internal board meeting at Innovate Solutions, the CEO, Mr. Rajesh Mehta, contends that
the merger cannot proceed, even with the approval of the Central Government.
No, the CEO is incorrect because

a) Is the CEO's contention that an Indian company cannot cross-border mergers are allowed
merge with a foreign company, even with the approval of the with the approval of both the Reserve
Central Government, correct? Bank of India and the Central
Government.
b) Who must approve a cross-border merger involving an Both the RBI and the Central
26
Indian and a foreign company?

Government
Page
101. How much Security Deposit of Candidature is required for 1,00,000 & prior 14 days’ notice
proposal to appoint himself as a director?
Penalty on officer whose duty to send
102. Failed to send Board meeting notice, Penalty
notice, ₹25000
103. whether same ID can be appointed for listed entity and its Yes, no restriction
wholly owned subsidiary
104. ID appointed from data bank maintained by CG such
appointment needs to be approved at board meeting as well only General Meeting
as general meeting, or only general meeting?
105. Reappointment of ID for 3rd term as it has served 1st term of No
3 yrs and 2nd term of 4 yrs , whether allowed
106. Do NCLT has power to windup?? Yes, NCLT has authority to windup a
company
107. Can a listed company merge with Foreign LLP? Yes, without any special permission
108. Draft minutes will be circulated within 15 days to all directors
109. In which situations are managing directors or whole-time Detained for any period under
directors not eligible to be appointed by the company? conservation of foreign exchange and
prevention
110. ROC has sent a notice and no information is received or
may call the company for another
Inadequate information is received or information is received notice in writing
is unsatisfactory then
111. Case Study:
XYZ Ltd. has the following financial details:
Authorized Share Capital: ₹40 crore,
Paid-up Share Capital: ₹40 crore, Debenture Redemption
Reserve: ₹40 crore, Revaluation Reserve: ₹20 crore, and
Profit and Loss Account: ₹20 crore.
a) What is the Effective capital? 100 Crore
b) Based on the above computation, what is the yearly 100 Lakh
remuneration in
case of a managerial person?
112. Case Study: An unlisted public company with a turnover of
₹420 crore has 7 directors, including Satish (Chairperson) 2 independent directors and no other
who is an independent director, and Veena (Woman woman director as already 1 is
Director). appointed.
a) How many additional independent directors need to be
appointed to fulfill regulatory requirements?
b) If all directors are members of the audit committee,
including Satish (Chairperson) and Veena (Woman
Director), how many other independent directors need 3 Director
to be appointed to fulfill regulatory requirements?
113. For the quarter ended 30th June 2023, ABC Ltd. needs to file
15th August 2023, unaudited report is
its compliance report. The management is determining
also allowed.
whether an audited or unaudited report is allowed and by
what deadline.
27 Page

114. SWL Ltd. held a Board of Directors (BOD) meeting to fix Not valid, the quorum requirement
remuneration. There are 7 directors, 2 participated was not met after the directors left
personally, and 3 participated via video conferencing. At 2
PM, 2 directors left the meeting, leaving 1 via video
conferencing.
What is the implication for the validity of the Board of
Directors meeting?
115. ABC Limited has the following shareholding: Central No, because the combined
government: 24%, State government: 25%, Government government shareholding does not
company: 22%. exceed 50%.
116. ABC Ltd. has a subsidiary whose income is 12% and net
No other appointments required as
worth is 18% of consolidated. Mr. Abhay, an independent
already one independent director is on
director of ABC Ltd., is a director of the subsidiary.
the board of the subsidiary
Is this in accordance with corporate governance
requirements?
117.
Case Study: ABC Limited, a company facing financial
difficulties, has a diverse group of shareholders. One of these
shareholders, Mr. Sharma, holds partly paid shares in the
company.
Mr. Sharma has been a shareholder for over a year and is

concerned about the company's ongoing viability. He is Yes, as holding for 12 months.
contemplating filing a petition for the winding up of ABC
Limited.
The legal team at ABC Limited is reviewing the eligibility

criteria for shareholders to file such petitions, specifically
focusing on whether holders of partly paid shares have the
right to initiate winding up proceedings.
They are particularly considering the duration of

shareholding and the payment status of the shares
Can a person Holding partly paid shares file for the winding
up of ABC Limited?
118. Will objections raised by shareholders and creditors sustain Objections raised by shareholders and
under Sec 230 or 231? creditors will sustain under Section
230 of the Companies Act, 2013,
provided they meet the specified
thresholds (at least 10% of the
shareholding or 5% of the total
outstanding
debt).
119. Whether Company can take copies in case of Book seized? Yes, co is allowed to take copies of
28
documents
seized
Page

120. Inspector can enter and seized books and paper after Special Court
obtaining permission of
121. Where all the directors of a company resign from their offices the Central Government shall appoint
then the required number of directors who
shall hold office till the directors are
appointed by the company in general
meeting
122. Can ID have stock option? No
If a person fails to appoint as a director or alternate director.
123. Can he appoint additional director No
Inquiry, Inspection and Investigation

1. Sec 212, Cases when CG will appoint SFIO for investigation

✓ Report of Registrar u/s 208
✓ SR by Co
✓ Public Interest
✓ Request by CG SG Dep.
2. Sec 219, whose prior permission is required for inspector to investigate subsidiary co.
➢ Central Govt.
Question 1: Power of ROC to Conduct Investigation
Case Study: The Registrar of Companies (ROC) suspects a company of fraudulent activities. What powers
does the ROC have to conduct an investigation, and where can the ROC approach if further investigation is
required? Options: Central Government (CG), Arbitration, or Tribunal.
Answer: The ROC has the power to conduct an investigation into the affairs of the company under Section
206 of the Companies Act, 2013. If further investigation is required, the ROC can approach the Central
Government (CG) to conduct an investigation through the Serious Fraud Investigation Office (SFIO).
OPPERSSION AND MISMANAGEMENT

1. Sec 244, min. requirement for application to Tribunal
Having Share Capital: Lower of
- 100 members or
- 1/10th of total members or
- 1/10th of total issued capital
Not having share capital:
29
- 1/5th of total members

-
Page

COMPROMISE AND ARRANGEMENT
1 Amount shall be disbursed to entitled shareholder when 60 Days
purchased by minority
2. From Bank account operated by co. for at least 1 Year
3. Books of amalgamated company Should not be disposed of
without prior permission of
central government
NIDHI COMPANY
Amounts of Deposits that can be accepted by Nidhi co. Not more than 20 times of NOF
Net Owned Funds Paid up share capital+ Free Reserves-
Accumulated Losses-Investments in
other Nidhi Companies
Tenure of FD Granted by Nidhi Company 6 months to 60 months
Loan Allowed by NIDHI Co to provide under Rule 15 of Nidhi Rules,2014
DEPOSITS MADE (Rs.) Loan allowed to Grant

Less than 2 crores Rs. 2 lakhs
More than 2 Crore -up to 20 crores Rs. 7.5 lakhs
From 20 crore – up to 50 Crores Rs. 12 lakhs
More than 50 crores Rs. 15 lakhs
WINDING UP
1. Liability of contributories who transferred partly paid-up shares before 1year of winding up
➢ the company has to duly notify the amount due on shares/debentures to the transferee
DORMANT COMPANY
Forms Usage by dormant company
MSC 1 Make application to ROC to obtain status of dormant company
MSC 2 ROC shall allow the status of dormant company
MSC 3 Dormant company shall file Annual Return within 30 Days from end of financial year
MSC 4 Application for seeking status for Active company
Minimum Number of Directors required in Dormant Company

In Public company Three Directors
In Private Company Two Directors
In OPC One Director
NOTE: Rotation of Auditors is not applicable on dormant company

30
MISCELLANEOUS PROVISIONS
Page
1. Sec 247 – Regular Valuer penalty

➢ Penalty: ₹50,000, If defraud:Imprisonment: upto 1 year Fine: ₹1L - ₹5L
Question 1: Nidhi Company - Net Owned Funds and Effective Capital Calculation
Case Study: XYZ Nidhi Company has the following financial details:
Paid-up Share Capital: INR 10 crores
Free Reserves: INR 2 crores
Accumulated Losses: INR 1 crore
Investments in other Nidhi Companies: INR 1 crore
Question: Based on the above information, calculate the Net Owned Funds and Effective Capital.
Answer:
Net Owned Funds: Paid-up Share Capital + Free Reserves - Accumulated Losses Investments in other Nidhi
Companies
= INR 10 crores + INR 2 crores - INR 1 crore - INR 1 crore
= INR 10 crores
Effective Capital: Paid-up Share Capital + Free Reserves - Accumulated Losses
= INR 10 crores + INR 2 crores - INR 1 crore
= INR 11 crores
NCLT
1. Sec 421, Appeal NCLT and NCLAT - 45 days & Supreme Court - 60 days
➢ Complete proceedings with 3 months (+90 days) for NCLT & NCLAT
2. Sec 420, whether rectification can made by NCLT within 2 yrs if any appeal is
preferred
➢ No
Question 1: NCLT - Time Limit for ROC Representation
Case Study: As per the Companies Act, 2013, what is the time limit for the Registrar of Companies
(ROC) to make a representation to the National Company Law Tribunal (NCLT), and what is the time
limit for the NCLT to pass an order?
Answer: The time limit for the ROC to make a representation to the NCLT is 30 days from the date of
receipt of notice. The NCLT must pass an order within 60 days from the date of receipt of application.
31
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1. Penalty on Stockbroker for excess charges

8. LODR: Quorum for BOD in case of Top 2000 listed companies

Question 2: Actions SEBI Can Take Against Insider Trading

IV. All of the above.

Answer: All of the above.

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Question 4: LODR - Independent Directors and Quorum

Question 5: SEBI - Brokerage Charges and Penalty

Question 6: SEBI - Price Offer to Anchor Investors

Answer: C. Within 15 days of the quarter end

5. Days limit on change in shareholders, right?

7. Penalty for unfair trade practices?

8. ICDR minimum application amount to be specified?

9. IPO to be open for Min & max time limit?

10. When a company is eligible for IPO?

11. Can a company issue IPO if ESOPs are outstanding?

12. Minimum assets along with monetary asset limit criteria?

Answer: Max monetary Asset – 50% of net tangible asset

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SEBI Act, LODR, Insider Trading Regulations (New Addition)

Minimum application value under SEBI (ICDR) Regulations

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32. Mr. X is a director in several companies and is also a member of 10 committee

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Other Important Topics

1. Ministry Approval Lists

Question 1: Maximum Time Limit for Making Interest on Imports

Question 2: Penalty if Contravened USD 2.5 lacs Limit

Answer: C. Three times the amount involved

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Question 5: Commission to Agent Abroad Limit

Question 6. Remittance calculation within limits

5. ODI in real estate is allowed? Answer: NO

28. • invalid as - The total permissible limit

1. Sec 4, Is scholarship provided by foreign university to PRI comes under FC

2. Sec 14A, If FCRA registration is surrendered, it is deemed to have expired on

Other Important Topics

5. Is order/direction by CG to banking authority for trust is binding on banking authority?

6. Fees for renewal of certificate?

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IBC (INSOLVENCY AND BANKRUPTCY CODE)

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1. Conduct of CoC meeting within of its Constitution

2. Voting for appointment of IRP as RP

3. Date of Insolvency Commencement date

4. voting required for withdrawal of application

5. How many approvals required for appointment of RP?

7. Time limit for approval of Board for RP?

Question 1: IBC - Approval of IBBI for Replacement of IRP