ICSI Previous Year Question papers Final Group1 Advanced Company Law and Practice Dec 2010

ICSI Previous Year Question papers Final Group1

Advanced Company Law and Practice

Dec 2010

Time allowed : 3 hours

Maximum marks : 100
Total number of questions : 8
NOTE : 1. Answer SIX questions including Question No.1 which is compulsory.

2. All references to sections relate to the Companies Act, 1956 unless stated otherwise.
1. Examine any four of the following statements and give your considered views :
(i) The Joint Hindu family system of business is set-up under a contract between
coparceners.
(ii) The judicial remedies under the Companies Act, 1956 are available only through
court of law.
(iii) An auditor as the watchdog can only bark.
(iv) No foreign company can be amalgamated with an Indian company unless the
former is also registered in India.
(v) Provisions of section 45 specifying liability of members when a company continues
its business with less than statutory number of members, will automatically lead
to the process of winding-up of the company.
(5 marks each)
2. (a) State, with reasons in brief, whether the following statements are correct or incorrect:
(i) A meeting of the Board of directors of Rony Ltd. is called where out of total
10 directors, 8 directors attended the meeting. Out of 8 directors 2 directors
were indirectly interested in certain matters, who voted in favour of the
resolution where interest of these directors was involved and the resolution
was carried as out of remaining 6 directors, 3 directors voted in favour.
(ii) Adarsh, the managing director of Speed Ltd. has also been validly appointed
as the company’s sole selling agent without having regard to provisions of
section 294(AA)(2) contendeding that the said provisions are ‘not required’.
(iii) The first annual general meeting of a company must be held within a period
of 6 months from the close of the financial year of the company.
(iv) Non-declaration of dividend when the non-declaration does not result in
devaluation of shares is an act of mismanagement as alleged by the requisite
number of members.
(v) While a petition for winding-up cannot be presented by the workers’ union of
a company, the union has a right to be heard.
(2 marks each)
Advanced Company Law and Practice

(b) Re-write the following sentences after filling-in the blank spaces with appropriate
word(s)/figure(s) :
(i) Board of directors of a private company which is a subsidiary of a public
company cannot contribute in any year, any welfare fund not related to its
employees an amount exceeding ___________ of its net profits for the last
three financial years, whichever is greater.
(ii) Companies registered under the Companies Act, 1956 having paid-up share
capital of less than Rs._________ need not appoint a Whole-time Company
Secretary.
(iii) Appointment of an authorised representative for a general meeting by a foreign
company can be done by means of a _______________.
(iv) When the Board of directors of a newly incorporated company fails to appoint
the first auditor, the auditor may be appointed by ___________.
(v) Secretarial Standard-9 issued by the Institute of Company Secretaries of
India relates to _________ .
(vi) The federal corporations statute in Canada is titled ___________.
(1 mark each)
3. (a) Always Fast Ltd. held its annual general meeting for the year 2007-08 on
9th June, 2008. The company’s financial year closes on 31st March of every year.
The company held its annual general meeting for the year 2008-09 on 23rd September,
2009. Do you think the annual general meeting for the year 2008-09 was held
within the prescribed time limit ? Give your answer with reasons.
(6 marks)
(b) Quick Enough Ltd. desires to hold its annual general meeting quickly, but some
difficulty was felt as a notice of 21 days is required. It has 111 members. The
chairman of the company wants to know whether there is any way-out for holding
the annual general meeting quickly and sought the opinion of the Company Secretary.
As the Company Secretary of the company, what would be your advice on this
issue ? Will your answer be different, if the company desires to hold an
extra-ordinary general meeting quickly instead of the annual general meeting ?
(6 marks)
(c) Explain the position of a receiver in relation to a company, appointed by the court.
State the legal consequences arising from this position.
(4 marks)
4. (a) Mention eight mandatory items of business that are required to be placed before
the Board as part of clause 49 of the listing agreement.
(8 marks)

(b) “The balance sheet and the profit and loss account are required to be placed only
at an annual general meeting and not at any other general meeting.” Discuss the
statement in the light of applicable provisions of the Companies Act, 1956 and
case law, if any. Also consider the consequences of inability of the company to
place the annual statements of account at the annual general meeting by the
latest day available to the company for holding the annual general meeting.
(8 marks)
5. (a) What are the conditions to be complied with by a company in case it wants to pay
Rs.3 lakh per month as remuneration to the managing director in a scenario when
its profits are inadequate or it has no profits at all ?
(10 marks)
(b) Referring to the provisions of the Companies Act, 1956 and the case laws, if any,
examine whether a company incorporated under the Act can be wound-up in the
following situations :
(i) The undertaking of Compact Ltd. has been transferred to another company.
(ii) Eager Ltd. has made all possible efforts to proceed with business but due to
unforeseen circumstances beyond its control, company could not proceed.
(iii) A decree passed by a court has not been satisfied by the company on execution.
(2 marks each)
6. (a) As the Secretary of a company, what special points would you keep in mind at the
time of framing a resolution ?
(2 marks)
(b) Draft a resolution appointing Veer as a whole-time director, who is appointed as
such by passing an ordinary resolution in the general meeting of Maharaja Ltd.
for a period of 5 years w.e.f. 1st November, 2009 on the following terms :
(i) Monthly salary of Rs.1 lakh and a commission of 1% on the net profits of the
company, if any.
(ii) Perquisites in accordance with Part-II of Schedule XIII of the Companies Act,
1956.
(iii) Housing, medical reimbursement, home town concession, conveyance,
health-insurance, gratuity and provident fund, as per the company’s rules.
(6 marks)
(c) Four out of five directors of XYZ Co. Ltd. have gone to UK on the company’s
business trip. Since the balance sheet and the profit and loss account were to be
submitted to the auditors for their report thereon and the Board of directors
meeting could not be held, the director present in India with a view to authenticate,
signed these financial statements without getting approval from the Board. Later
on, these were submitted to the auditors. Certain members of the company objected
to the director’s authentication on the ground that the act of the director was

violative of the provisions of the Companies Act, 1956. Referring to the provisions
of the Companies Act, 1956 ––
(i) Examine the validity of the members’ contention.
(ii) What would be your answer in case the company in question is a private
company which is the subsidiary of a public limited company ?
(4 marks)
(d) In what way are the following in relation to foreign companies having place of
business in India, regulated by the Companies Act, 1956 :
(i) Filing of documents to be delivered to the Registrar of Companies by such
foreign companies.
(ii) Manner in which service of documents can be made upon such foreign companies.
(4 marks)
7. (a) Is the Company Law Board a court ? Explain.
(8 marks)
(b) What are the documents to be enclosed to a petition under section 235(2) seeking
declaration by way of an order that affairs of a company be investigated by inspectors?
(6 marks)
(c) List out four powers of the Central Government under the Companies Act, 1956
which cannot be delegated.
(2 marks)
8. Write notes on any four of the following :
(i) Compounding of offences punishable under the Companies Act, 1956
(ii) Corporate Identity Number (CIN)
(iii) Committee of inspection
(iv) Buy-back of shares by a company – objectives and sources
(v) Services available on MCA-21.
(4 marks each)

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