Mock Test: Business Laws & Business Correspondence and Reporting (Paper-2) - Series-II(Dec. 2023) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
MOCK TEST PAPER - 2 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions. 
1. (a) Mr. Nikhil has decided to get interior work for his new office. For this purpose, he entered into a 
contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete 
the interior work latest by 31
st
 January, 2023. On 31
st
 January, 2023, Mr. Nikhil observed that only 
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine 
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for 
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry 
Fine Interiors did not complete the work within the time as per contract and further the work done 
till 31
st
 January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a 
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by  
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872?  (4 Marks) 
(b)  ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital 
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status 
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss 
the meaning of a Small Company. (4 Marks) 
(c)  Discuss the essential elements regarding the sale of unascertained goods and its appropriation as 
per the Sale of Goods Act, 1930.  (4 Marks) 
2. (a)  As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract". 
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act, 
1872.  (7 Marks) 
(b)  Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per 
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks) 
3. (a)  (i)  What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932? 
 (2 Marks) 
(ii)  Can a minor become a partner in a partnership firm? Justify your answer and also explain the 
rights of a minor in a partnership firm. (4 Marks) 
(b)  Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit 
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a 
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush 
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872, 
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons?  (6 Marks) 
4. (a)  Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale 
under Sale of Goods Act, 1930. (6 Marks) 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 2


1 
MOCK TEST PAPER - 2 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions. 
1. (a) Mr. Nikhil has decided to get interior work for his new office. For this purpose, he entered into a 
contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete 
the interior work latest by 31
st
 January, 2023. On 31
st
 January, 2023, Mr. Nikhil observed that only 
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine 
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for 
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry 
Fine Interiors did not complete the work within the time as per contract and further the work done 
till 31
st
 January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a 
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by  
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872?  (4 Marks) 
(b)  ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital 
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status 
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss 
the meaning of a Small Company. (4 Marks) 
(c)  Discuss the essential elements regarding the sale of unascertained goods and its appropriation as 
per the Sale of Goods Act, 1930.  (4 Marks) 
2. (a)  As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract". 
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act, 
1872.  (7 Marks) 
(b)  Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per 
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks) 
3. (a)  (i)  What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932? 
 (2 Marks) 
(ii)  Can a minor become a partner in a partnership firm? Justify your answer and also explain the 
rights of a minor in a partnership firm. (4 Marks) 
(b)  Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit 
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a 
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush 
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872, 
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons?  (6 Marks) 
4. (a)  Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale 
under Sale of Goods Act, 1930. (6 Marks) 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(b)  P, Q and R are partners in a partnership firm. R retires from the firm without giving public notice. 
P approached S, an electronic appliances trader, for purchase of 25 fans for his firm. P introduced 
E, an employee of the firm, as his partner to S. S believing E and R as partners supplied 25 fans 
to the firm on credit. S did not receive the payment for the fans even after the expiry of the credit 
period. Advise S, from whom he can recover the payment as per the provisions of the Indian 
Partnership Act, 1932.   (6 Marks) 
5. (a)  Samar was in search of a second-hand car. For this purpose, he approached “Car Wala 007”, a 
dealer in pre-owned cars. The sales manager of “Car Wala 007” showed him three cars which were 
standing in the parking lane just outside the office. Samar finalised red Wagon R car. After 
completing the documenting formalities and receiving the price of car, sales manager of  
“Car Wala 007” handed over the key of car to Samar. But when Samar was coming to parking area 
for picking the car, the electric poll fell on the car which badly damaged the car. Samar claimed 
that repair expenses of the car should be borne by “Car Wala 007” as car was not delivered to him. 
Referring to the provisions of the Sales of Goods Act 1930, state who will be liable to get the car 
repaired?      (6 Marks)  
(b)  Explain the concept of 'Corporate Veil'. Briefly state the circumstances when the corporate veil can 
be lifted as per the provisions of the Companies Act, 2013. (6 Marks) 
6. (a)  "Liquidated damage is a genuine pre-estimate of compensation of damages for certain anticipated 
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is 
clearly unconscionable and has no comparison to the loss suffered by the parties". Explain the 
statement by differentiating between liquidated damages and penalty with reference to provisions 
of the Indian Contract Act, 1872.  (5 Marks) 
(b)  What is the difference between partnership and co-ownership as per the Indian Partnership Act, 
1932?  (4 Marks) 
(c)  Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth  
` 1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to 
the due date and met Mr. C, an employee at the billing counter, who convinced the former that the 
payment can be made to him as the billing-cashier is on leave. 
 Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due 
date, Mr. R received a recovery notice from the company for the payment of ` 1,50,000/-. 
 Mr. R informed the company that he has already paid the above amount and being an outsider had 
genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt. 
 The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and 
the liability of Mr. R towards company as on current date in consonance with the provision of the 
Companies Act 2013? Would your answer be different if a receipt under the company seal was not 
issued by Mr. C after receiving payment? (3 Marks) 
 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 3


1 
MOCK TEST PAPER - 2 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions. 
1. (a) Mr. Nikhil has decided to get interior work for his new office. For this purpose, he entered into a 
contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete 
the interior work latest by 31
st
 January, 2023. On 31
st
 January, 2023, Mr. Nikhil observed that only 
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine 
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for 
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry 
Fine Interiors did not complete the work within the time as per contract and further the work done 
till 31
st
 January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a 
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by  
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872?  (4 Marks) 
(b)  ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital 
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status 
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss 
the meaning of a Small Company. (4 Marks) 
(c)  Discuss the essential elements regarding the sale of unascertained goods and its appropriation as 
per the Sale of Goods Act, 1930.  (4 Marks) 
2. (a)  As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract". 
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act, 
1872.  (7 Marks) 
(b)  Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per 
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks) 
3. (a)  (i)  What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932? 
 (2 Marks) 
(ii)  Can a minor become a partner in a partnership firm? Justify your answer and also explain the 
rights of a minor in a partnership firm. (4 Marks) 
(b)  Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit 
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a 
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush 
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872, 
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons?  (6 Marks) 
4. (a)  Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale 
under Sale of Goods Act, 1930. (6 Marks) 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(b)  P, Q and R are partners in a partnership firm. R retires from the firm without giving public notice. 
P approached S, an electronic appliances trader, for purchase of 25 fans for his firm. P introduced 
E, an employee of the firm, as his partner to S. S believing E and R as partners supplied 25 fans 
to the firm on credit. S did not receive the payment for the fans even after the expiry of the credit 
period. Advise S, from whom he can recover the payment as per the provisions of the Indian 
Partnership Act, 1932.   (6 Marks) 
5. (a)  Samar was in search of a second-hand car. For this purpose, he approached “Car Wala 007”, a 
dealer in pre-owned cars. The sales manager of “Car Wala 007” showed him three cars which were 
standing in the parking lane just outside the office. Samar finalised red Wagon R car. After 
completing the documenting formalities and receiving the price of car, sales manager of  
“Car Wala 007” handed over the key of car to Samar. But when Samar was coming to parking area 
for picking the car, the electric poll fell on the car which badly damaged the car. Samar claimed 
that repair expenses of the car should be borne by “Car Wala 007” as car was not delivered to him. 
Referring to the provisions of the Sales of Goods Act 1930, state who will be liable to get the car 
repaired?      (6 Marks)  
(b)  Explain the concept of 'Corporate Veil'. Briefly state the circumstances when the corporate veil can 
be lifted as per the provisions of the Companies Act, 2013. (6 Marks) 
6. (a)  "Liquidated damage is a genuine pre-estimate of compensation of damages for certain anticipated 
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is 
clearly unconscionable and has no comparison to the loss suffered by the parties". Explain the 
statement by differentiating between liquidated damages and penalty with reference to provisions 
of the Indian Contract Act, 1872.  (5 Marks) 
(b)  What is the difference between partnership and co-ownership as per the Indian Partnership Act, 
1932?  (4 Marks) 
(c)  Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth  
` 1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to 
the due date and met Mr. C, an employee at the billing counter, who convinced the former that the 
payment can be made to him as the billing-cashier is on leave. 
 Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due 
date, Mr. R received a recovery notice from the company for the payment of ` 1,50,000/-. 
 Mr. R informed the company that he has already paid the above amount and being an outsider had 
genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt. 
 The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and 
the liability of Mr. R towards company as on current date in consonance with the provision of the 
Companies Act 2013? Would your answer be different if a receipt under the company seal was not 
issued by Mr. C after receiving payment? (3 Marks) 
 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is 
compulsory. Out of 2 to 5, attempt any three. 
1. (a)  Read the passage and answer the questions that follow: 
 Wealth management is an extremely personal industry, with the client dictating the 
face and personality of the management strategies being pursued. An in-depth 
analysis of the wealth management space indicates that, over the years, there has 
been a significant evolution in client segmentation. There has been a gradual yet 
decided shift in the ownership of the person or client that wealth managers deal with, 
and these are the people who have the decision-making power when it comes to 
decoding portfolio tactics. While a male member of the family, usually a patriarch in 
the 60 to 70-year age group, would have been the client and deciding force behind 
wealth management portfolios a few decades earlier, managers today are meeting 
with individuals in their 30s and 40s. Further, wealth management is no longer the 
bastion of men – today, clients are both male and female and they have equal 
decision-making power, indicating strong equality in the ecosystem. One of the 
biggest changes in wealth management revolves around the average age of the 
decision-makers. Wealth managers are witnessing a major shift in this area, with 
millennials taking over from their predecessors and injecting a much-needed dose of 
vitality and innovation into the environment. This generational shift in wealth is also 
visible from the results of the IIFL Wealth Hurun India Rich List 2022, which indicates 
that the youngest on the list today is a teenager, as against a 37-year-year-old a 
decade ago. The decreasing age of the wealthy also adds an element of risk-taking 
to the wealth management space because, being in their prime, these individuals are 
willing to take on greater risk in the pursuit of higher returns, something which wasn’t 
the case just a decade or so earlier. 
 The next major trend that wealth managers have witnessed is the increasing number 
of female clients coming to the forefront of the ecosystem. With equal deciding power 
as their male counterparts, women are taking the reins of finance into their own hands 
and making decisions that attest to their individual personalities and requirements. 
Gone is the era when a woman’s financial well-being was dependent on her father, 
brother or husband. Today, women are charting their own path, be it on their 
education and career fronts or in their financial lives. There is greater awareness and 
understanding of the nuances of finance and wealth management is slowly 
transitioning into a sector wherein women now play an active role. 
 As the average age of the decision-maker trends downward, there is one segment of 
the clientele which is playing a bigger part in making this a reality and that is Gen Z. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 4


1 
MOCK TEST PAPER - 2 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions. 
1. (a) Mr. Nikhil has decided to get interior work for his new office. For this purpose, he entered into a 
contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete 
the interior work latest by 31
st
 January, 2023. On 31
st
 January, 2023, Mr. Nikhil observed that only 
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine 
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for 
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry 
Fine Interiors did not complete the work within the time as per contract and further the work done 
till 31
st
 January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a 
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by  
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872?  (4 Marks) 
(b)  ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital 
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status 
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss 
the meaning of a Small Company. (4 Marks) 
(c)  Discuss the essential elements regarding the sale of unascertained goods and its appropriation as 
per the Sale of Goods Act, 1930.  (4 Marks) 
2. (a)  As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract". 
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act, 
1872.  (7 Marks) 
(b)  Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per 
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks) 
3. (a)  (i)  What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932? 
 (2 Marks) 
(ii)  Can a minor become a partner in a partnership firm? Justify your answer and also explain the 
rights of a minor in a partnership firm. (4 Marks) 
(b)  Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit 
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a 
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush 
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872, 
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons?  (6 Marks) 
4. (a)  Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale 
under Sale of Goods Act, 1930. (6 Marks) 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(b)  P, Q and R are partners in a partnership firm. R retires from the firm without giving public notice. 
P approached S, an electronic appliances trader, for purchase of 25 fans for his firm. P introduced 
E, an employee of the firm, as his partner to S. S believing E and R as partners supplied 25 fans 
to the firm on credit. S did not receive the payment for the fans even after the expiry of the credit 
period. Advise S, from whom he can recover the payment as per the provisions of the Indian 
Partnership Act, 1932.   (6 Marks) 
5. (a)  Samar was in search of a second-hand car. For this purpose, he approached “Car Wala 007”, a 
dealer in pre-owned cars. The sales manager of “Car Wala 007” showed him three cars which were 
standing in the parking lane just outside the office. Samar finalised red Wagon R car. After 
completing the documenting formalities and receiving the price of car, sales manager of  
“Car Wala 007” handed over the key of car to Samar. But when Samar was coming to parking area 
for picking the car, the electric poll fell on the car which badly damaged the car. Samar claimed 
that repair expenses of the car should be borne by “Car Wala 007” as car was not delivered to him. 
Referring to the provisions of the Sales of Goods Act 1930, state who will be liable to get the car 
repaired?      (6 Marks)  
(b)  Explain the concept of 'Corporate Veil'. Briefly state the circumstances when the corporate veil can 
be lifted as per the provisions of the Companies Act, 2013. (6 Marks) 
6. (a)  "Liquidated damage is a genuine pre-estimate of compensation of damages for certain anticipated 
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is 
clearly unconscionable and has no comparison to the loss suffered by the parties". Explain the 
statement by differentiating between liquidated damages and penalty with reference to provisions 
of the Indian Contract Act, 1872.  (5 Marks) 
(b)  What is the difference between partnership and co-ownership as per the Indian Partnership Act, 
1932?  (4 Marks) 
(c)  Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth  
` 1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to 
the due date and met Mr. C, an employee at the billing counter, who convinced the former that the 
payment can be made to him as the billing-cashier is on leave. 
 Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due 
date, Mr. R received a recovery notice from the company for the payment of ` 1,50,000/-. 
 Mr. R informed the company that he has already paid the above amount and being an outsider had 
genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt. 
 The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and 
the liability of Mr. R towards company as on current date in consonance with the provision of the 
Companies Act 2013? Would your answer be different if a receipt under the company seal was not 
issued by Mr. C after receiving payment? (3 Marks) 
 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is 
compulsory. Out of 2 to 5, attempt any three. 
1. (a)  Read the passage and answer the questions that follow: 
 Wealth management is an extremely personal industry, with the client dictating the 
face and personality of the management strategies being pursued. An in-depth 
analysis of the wealth management space indicates that, over the years, there has 
been a significant evolution in client segmentation. There has been a gradual yet 
decided shift in the ownership of the person or client that wealth managers deal with, 
and these are the people who have the decision-making power when it comes to 
decoding portfolio tactics. While a male member of the family, usually a patriarch in 
the 60 to 70-year age group, would have been the client and deciding force behind 
wealth management portfolios a few decades earlier, managers today are meeting 
with individuals in their 30s and 40s. Further, wealth management is no longer the 
bastion of men – today, clients are both male and female and they have equal 
decision-making power, indicating strong equality in the ecosystem. One of the 
biggest changes in wealth management revolves around the average age of the 
decision-makers. Wealth managers are witnessing a major shift in this area, with 
millennials taking over from their predecessors and injecting a much-needed dose of 
vitality and innovation into the environment. This generational shift in wealth is also 
visible from the results of the IIFL Wealth Hurun India Rich List 2022, which indicates 
that the youngest on the list today is a teenager, as against a 37-year-year-old a 
decade ago. The decreasing age of the wealthy also adds an element of risk-taking 
to the wealth management space because, being in their prime, these individuals are 
willing to take on greater risk in the pursuit of higher returns, something which wasn’t 
the case just a decade or so earlier. 
 The next major trend that wealth managers have witnessed is the increasing number 
of female clients coming to the forefront of the ecosystem. With equal deciding power 
as their male counterparts, women are taking the reins of finance into their own hands 
and making decisions that attest to their individual personalities and requirements. 
Gone is the era when a woman’s financial well-being was dependent on her father, 
brother or husband. Today, women are charting their own path, be it on their 
education and career fronts or in their financial lives. There is greater awareness and 
understanding of the nuances of finance and wealth management is slowly 
transitioning into a sector wherein women now play an active role. 
 As the average age of the decision-maker trends downward, there is one segment of 
the clientele which is playing a bigger part in making this a reality and that is Gen Z. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
4 
Wealth managers are now noticing youngsters, who belong to the late millennial and 
early Gen Z tribe, coming in and playing a leading role in managing at least a part of 
the portfolio themselves. Retail investments in India have grown steadily, as indicated 
by the sustained rise in demat accounts, and a number of the younger individuals 
today are extremely well-versed with money matters and proactively manage their 
investment portfolios. In this scenario, while they invite advice from wealth managers, 
these individuals are running the last mile of the race themselves, building up a 
portfolio, which reflects their unique personas and focus sectors. 
(1) What adds an element of risk today to wealth management?             (1 Mark) 
(2) What factors indicate that retail investments in India have grown steadily?  
(1 Mark) 
(3) ‘Women are taking the reins of finance into their own hands’. What does the 
word ‘rein’ mean as used in this line?      (1 Mark) 
(a) Responsibility 
(b) Wish 
(c) Fear 
(d) Command 
(4) Select a suitable title for the passage:    (1 Mark) 
(a) Wealth an management 
(b) Wealth management 
(c) Wealth management and its changing trends 
(d) Rise of wealth in management  
(5) ‘Wealth management is no longer the bastion of men’. Choose a suitable 
synonym for bastion:      (1 Mark) 
(a) Stronghold 
(b) Control 
(c) Dedication 
(d) Duty 
(b)  Read the following passage 
 El Niño refers to the change in climate across the Pacific Ocean. Although it normally 
occurs every two to seven years, the El Niño phenomenon has taken place more often 
in the past three decades. El Niños have an effect on climate and weather around the 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
Page 5


1 
MOCK TEST PAPER - 2 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions. 
1. (a) Mr. Nikhil has decided to get interior work for his new office. For this purpose, he entered into a 
contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete 
the interior work latest by 31
st
 January, 2023. On 31
st
 January, 2023, Mr. Nikhil observed that only 
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine 
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for 
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry 
Fine Interiors did not complete the work within the time as per contract and further the work done 
till 31
st
 January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a 
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by  
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872?  (4 Marks) 
(b)  ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital 
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status 
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss 
the meaning of a Small Company. (4 Marks) 
(c)  Discuss the essential elements regarding the sale of unascertained goods and its appropriation as 
per the Sale of Goods Act, 1930.  (4 Marks) 
2. (a)  As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract". 
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act, 
1872.  (7 Marks) 
(b)  Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per 
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks) 
3. (a)  (i)  What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932? 
 (2 Marks) 
(ii)  Can a minor become a partner in a partnership firm? Justify your answer and also explain the 
rights of a minor in a partnership firm. (4 Marks) 
(b)  Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit 
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a 
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush 
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872, 
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons?  (6 Marks) 
4. (a)  Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale 
under Sale of Goods Act, 1930. (6 Marks) 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
2 
(b)  P, Q and R are partners in a partnership firm. R retires from the firm without giving public notice. 
P approached S, an electronic appliances trader, for purchase of 25 fans for his firm. P introduced 
E, an employee of the firm, as his partner to S. S believing E and R as partners supplied 25 fans 
to the firm on credit. S did not receive the payment for the fans even after the expiry of the credit 
period. Advise S, from whom he can recover the payment as per the provisions of the Indian 
Partnership Act, 1932.   (6 Marks) 
5. (a)  Samar was in search of a second-hand car. For this purpose, he approached “Car Wala 007”, a 
dealer in pre-owned cars. The sales manager of “Car Wala 007” showed him three cars which were 
standing in the parking lane just outside the office. Samar finalised red Wagon R car. After 
completing the documenting formalities and receiving the price of car, sales manager of  
“Car Wala 007” handed over the key of car to Samar. But when Samar was coming to parking area 
for picking the car, the electric poll fell on the car which badly damaged the car. Samar claimed 
that repair expenses of the car should be borne by “Car Wala 007” as car was not delivered to him. 
Referring to the provisions of the Sales of Goods Act 1930, state who will be liable to get the car 
repaired?      (6 Marks)  
(b)  Explain the concept of 'Corporate Veil'. Briefly state the circumstances when the corporate veil can 
be lifted as per the provisions of the Companies Act, 2013. (6 Marks) 
6. (a)  "Liquidated damage is a genuine pre-estimate of compensation of damages for certain anticipated 
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is 
clearly unconscionable and has no comparison to the loss suffered by the parties". Explain the 
statement by differentiating between liquidated damages and penalty with reference to provisions 
of the Indian Contract Act, 1872.  (5 Marks) 
(b)  What is the difference between partnership and co-ownership as per the Indian Partnership Act, 
1932?  (4 Marks) 
(c)  Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth  
` 1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to 
the due date and met Mr. C, an employee at the billing counter, who convinced the former that the 
payment can be made to him as the billing-cashier is on leave. 
 Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due 
date, Mr. R received a recovery notice from the company for the payment of ` 1,50,000/-. 
 Mr. R informed the company that he has already paid the above amount and being an outsider had 
genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt. 
 The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and 
the liability of Mr. R towards company as on current date in consonance with the provision of the 
Companies Act 2013? Would your answer be different if a receipt under the company seal was not 
issued by Mr. C after receiving payment? (3 Marks) 
 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is 
compulsory. Out of 2 to 5, attempt any three. 
1. (a)  Read the passage and answer the questions that follow: 
 Wealth management is an extremely personal industry, with the client dictating the 
face and personality of the management strategies being pursued. An in-depth 
analysis of the wealth management space indicates that, over the years, there has 
been a significant evolution in client segmentation. There has been a gradual yet 
decided shift in the ownership of the person or client that wealth managers deal with, 
and these are the people who have the decision-making power when it comes to 
decoding portfolio tactics. While a male member of the family, usually a patriarch in 
the 60 to 70-year age group, would have been the client and deciding force behind 
wealth management portfolios a few decades earlier, managers today are meeting 
with individuals in their 30s and 40s. Further, wealth management is no longer the 
bastion of men – today, clients are both male and female and they have equal 
decision-making power, indicating strong equality in the ecosystem. One of the 
biggest changes in wealth management revolves around the average age of the 
decision-makers. Wealth managers are witnessing a major shift in this area, with 
millennials taking over from their predecessors and injecting a much-needed dose of 
vitality and innovation into the environment. This generational shift in wealth is also 
visible from the results of the IIFL Wealth Hurun India Rich List 2022, which indicates 
that the youngest on the list today is a teenager, as against a 37-year-year-old a 
decade ago. The decreasing age of the wealthy also adds an element of risk-taking 
to the wealth management space because, being in their prime, these individuals are 
willing to take on greater risk in the pursuit of higher returns, something which wasn’t 
the case just a decade or so earlier. 
 The next major trend that wealth managers have witnessed is the increasing number 
of female clients coming to the forefront of the ecosystem. With equal deciding power 
as their male counterparts, women are taking the reins of finance into their own hands 
and making decisions that attest to their individual personalities and requirements. 
Gone is the era when a woman’s financial well-being was dependent on her father, 
brother or husband. Today, women are charting their own path, be it on their 
education and career fronts or in their financial lives. There is greater awareness and 
understanding of the nuances of finance and wealth management is slowly 
transitioning into a sector wherein women now play an active role. 
 As the average age of the decision-maker trends downward, there is one segment of 
the clientele which is playing a bigger part in making this a reality and that is Gen Z. 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
4 
Wealth managers are now noticing youngsters, who belong to the late millennial and 
early Gen Z tribe, coming in and playing a leading role in managing at least a part of 
the portfolio themselves. Retail investments in India have grown steadily, as indicated 
by the sustained rise in demat accounts, and a number of the younger individuals 
today are extremely well-versed with money matters and proactively manage their 
investment portfolios. In this scenario, while they invite advice from wealth managers, 
these individuals are running the last mile of the race themselves, building up a 
portfolio, which reflects their unique personas and focus sectors. 
(1) What adds an element of risk today to wealth management?             (1 Mark) 
(2) What factors indicate that retail investments in India have grown steadily?  
(1 Mark) 
(3) ‘Women are taking the reins of finance into their own hands’. What does the 
word ‘rein’ mean as used in this line?      (1 Mark) 
(a) Responsibility 
(b) Wish 
(c) Fear 
(d) Command 
(4) Select a suitable title for the passage:    (1 Mark) 
(a) Wealth an management 
(b) Wealth management 
(c) Wealth management and its changing trends 
(d) Rise of wealth in management  
(5) ‘Wealth management is no longer the bastion of men’. Choose a suitable 
synonym for bastion:      (1 Mark) 
(a) Stronghold 
(b) Control 
(c) Dedication 
(d) Duty 
(b)  Read the following passage 
 El Niño refers to the change in climate across the Pacific Ocean. Although it normally 
occurs every two to seven years, the El Niño phenomenon has taken place more often 
in the past three decades. El Niños have an effect on climate and weather around the 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation
5 
globe. A single phase can last for about one and a half years and is often followed by 
an opposite climate pattern called, La Niña. 
 The term El Niño means “Christ child” and was first used by Peruvian fishermen. They 
discovered that in some years there were fewer fish around Christmas time. 
 In normal years, cold water comes from the Antarctic region and flows along the 
eastern coast of South America. A high-pressure area develops, warms the water on 
the surface and pushes it in a westward direction. In the western Pacific, the air 
becomes warmer. A low-pressure area forms and leads to tropical rainfall in Indonesia 
and northern Australia. 
 Because of this climate cycle cold water rises from deeper regions of the South 
American coast to replace the warmer water on the surface. This part of the ocean 
belongs to the richest fishing regions of the world because fish can find more than 
enough food. 
 During a typical El Niño phase, the air pressure is higher than normal in the western 
Pacific and lower than normal on the South American coast. Ocean temperatures 
along Peru and Chile become higher and the water does not have the nutrients that 
fish need to survive. They stay in the colder regions near the Antarctic. Other animals 
that feed on fish also suffer so that the whole food chain is affected. In addition, more 
rainfall comes to a normally dry area and occasional flooding also occurs. On the 
other side, eastern Australia and Indonesia are hit by unusual periods of dry weather. 
Climate experts have seen more tropical storms in the central Pacific during an El 
Niño year. 
 El Niño does not only affect the climate of the Pacific regions but has an impact on 
global climate. Climatologists claim that frequent occurrences of El Niño are another 
sign of global warming. 
(i) Make notes, sub-heading, abbreviations, wherever necessary giving a suitable 
title   (3 Marks) 
(ii) Write a summary (2 Marks) 
2. (a)  Write a short note on ‘Oral Communication’ and its nuances.  (2 Marks) 
 (b) (i)  Choose the suitable synonym for the word: (1 Mark) 
Exorbitant 
a. Inflated 
b. Reasonable 
c. Initiate 
d. Encouraging 
Downloaded From www.castudynotes.com
Join Us on Telegram http://t.me/canotes_foundation