Corporate and Other Laws (Group I) Model Test Paper - 1 (Questions) | Model Test Papers for CA Intermediate PDF Download

 Page 1


MODEL TEST PAPER 1 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks) 
Part I is compulsory. 
Case Scenario 1 
Silver Private Limited was incorporated in 2016 having its registered office at 
Gurugram, Haryana. It is registered with an authorised share capital of ` 10 crore 
divided into 1 crore equity shares of ` 10/- each. The paid-up share capital of the 
company is ` 50 lakh divided into 5 lakh equity shares of ` 10/- each. The company 
is in manufacturing of rubber parts to be used in manufacturing of parts of 
passenger vehicles.  
Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) 
on January 8, 2022 had advanced a loan of ` 50 lakh at an interest rate of 8% p.a. 
and the loan is expected to be repaid after a period of thirty six months. 
Silver Private Limited intends to accept deposits of ` 60 lakh from its members for 
the purpose of expansion of its business. The financial particulars of the company 
are as below mentioned: - 
S. No. Particulars Amount (`) 
1 Paid-up share capital 50 lakh 
2 Free Reserves 20 lakh 
3 Security premium 10 lakh 
4 Borrowings from banks 65 lakh 
5 Turnover 200 lakh 
As on the date of acceptance of deposits, the company has not defaulted in 
repayment of borrowings along with interest thereon.   
The Company Secretary of the company informed Board of Directors of the 
company that they need to appoint an internal auditor for audit of the company. The 
Board stated that statutory auditor is already performing audit function and there is 
no need to appoint internal auditor as it causes additional burden on the company. 
The company require funds for the purpose of meeting working capital 
requirements. The company has approached the bank for meeting working capital 
requirements and has availed a loan of ` 65 lakh from bank. The loan is secured 
by the personal guarantee of the directors of the company. 
97
Page 2


MODEL TEST PAPER 1 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks) 
Part I is compulsory. 
Case Scenario 1 
Silver Private Limited was incorporated in 2016 having its registered office at 
Gurugram, Haryana. It is registered with an authorised share capital of ` 10 crore 
divided into 1 crore equity shares of ` 10/- each. The paid-up share capital of the 
company is ` 50 lakh divided into 5 lakh equity shares of ` 10/- each. The company 
is in manufacturing of rubber parts to be used in manufacturing of parts of 
passenger vehicles.  
Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) 
on January 8, 2022 had advanced a loan of ` 50 lakh at an interest rate of 8% p.a. 
and the loan is expected to be repaid after a period of thirty six months. 
Silver Private Limited intends to accept deposits of ` 60 lakh from its members for 
the purpose of expansion of its business. The financial particulars of the company 
are as below mentioned: - 
S. No. Particulars Amount (`) 
1 Paid-up share capital 50 lakh 
2 Free Reserves 20 lakh 
3 Security premium 10 lakh 
4 Borrowings from banks 65 lakh 
5 Turnover 200 lakh 
As on the date of acceptance of deposits, the company has not defaulted in 
repayment of borrowings along with interest thereon.   
The Company Secretary of the company informed Board of Directors of the 
company that they need to appoint an internal auditor for audit of the company. The 
Board stated that statutory auditor is already performing audit function and there is 
no need to appoint internal auditor as it causes additional burden on the company. 
The company require funds for the purpose of meeting working capital 
requirements. The company has approached the bank for meeting working capital 
requirements and has availed a loan of ` 65 lakh from bank. The loan is secured 
by the personal guarantee of the directors of the company. 
97
On the basis of above facts and by applying applicable provisions of the Companies 
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of 
four) of the following Multiple Choice Questions (MCQs 1-5) given herein under: -  
1. With respect to loan advances by Mr. Siddharth to Silver Private Limited,
whether the same can be classified as deposit or not?
(a) It will be treated as deposit as the loan is advanced by Mr. Siddharth
who is neither director nor shareholder of the company.
(b) It will be treated as deposit as the loan is given by relative of the director.
(c) It will not be treated as deposit as Mr. Siddharth has given loan to the
company at an interest rate of 8% p.a.
(d) It will not be treated as deposit if Mr. Siddharth gives a written declaration
to the effect that loan is advanced by him from his own source of funds,
not from borrowings or accepting loans or deposits from others and the
company shall disclose the details of money so accepted in the Board’s
Report.
2. With respect to acceptance of deposits from members, which of the below
mentioned statement is correct:
(a) Silver Private Limited cannot accept deposits of more than paid-up share
capital which is ` 50 lakh.
(b) Silver Private Limited can accept deposits of ` 60 lakh from members,
as it is less than twice of its paid up share capital or ` 50 crore, whichever
is less.
(c) Silver Private Limited cannot accept deposits of more than higher of
aggregate of paid-up share capital and free reserves which is ` 70 lakh
and borrowings which is ` 65 lakh.
(d) Silver Private Limited cannot accept deposits of more than aggregate of
paid-up share capital and free reserves, which is ` 70 lakh.
3. Is Silver Private Limited required to appoint internal auditor in accordance with
the provisions of the Companies Act, 2013?
(a) Silver Private Limited is not required to appoint internal auditor as
private companies are not required to appoint internal auditor.
(b) Silver Private Limited is required to appoint internal auditor as
borrowings is below prescribed limited.
(c) Silver Private Limited is required to appoint internal auditor as aggregate
of paid-up share, free reserves and security premium is more than
prescribed limited.
(d) Silver Private Limited is not required to appoint internal auditor as
turnover is less than prescribed limited.
4. Which of the following statement is correct in respect of loan of ` 65 lakh
availed by the company?
(a) Silver Private Limited needs to create and register charge within 30 days
from the date of sanction of loan.
98
Page 3


MODEL TEST PAPER 1 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks) 
Part I is compulsory. 
Case Scenario 1 
Silver Private Limited was incorporated in 2016 having its registered office at 
Gurugram, Haryana. It is registered with an authorised share capital of ` 10 crore 
divided into 1 crore equity shares of ` 10/- each. The paid-up share capital of the 
company is ` 50 lakh divided into 5 lakh equity shares of ` 10/- each. The company 
is in manufacturing of rubber parts to be used in manufacturing of parts of 
passenger vehicles.  
Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) 
on January 8, 2022 had advanced a loan of ` 50 lakh at an interest rate of 8% p.a. 
and the loan is expected to be repaid after a period of thirty six months. 
Silver Private Limited intends to accept deposits of ` 60 lakh from its members for 
the purpose of expansion of its business. The financial particulars of the company 
are as below mentioned: - 
S. No. Particulars Amount (`) 
1 Paid-up share capital 50 lakh 
2 Free Reserves 20 lakh 
3 Security premium 10 lakh 
4 Borrowings from banks 65 lakh 
5 Turnover 200 lakh 
As on the date of acceptance of deposits, the company has not defaulted in 
repayment of borrowings along with interest thereon.   
The Company Secretary of the company informed Board of Directors of the 
company that they need to appoint an internal auditor for audit of the company. The 
Board stated that statutory auditor is already performing audit function and there is 
no need to appoint internal auditor as it causes additional burden on the company. 
The company require funds for the purpose of meeting working capital 
requirements. The company has approached the bank for meeting working capital 
requirements and has availed a loan of ` 65 lakh from bank. The loan is secured 
by the personal guarantee of the directors of the company. 
97
On the basis of above facts and by applying applicable provisions of the Companies 
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of 
four) of the following Multiple Choice Questions (MCQs 1-5) given herein under: -  
1. With respect to loan advances by Mr. Siddharth to Silver Private Limited,
whether the same can be classified as deposit or not?
(a) It will be treated as deposit as the loan is advanced by Mr. Siddharth
who is neither director nor shareholder of the company.
(b) It will be treated as deposit as the loan is given by relative of the director.
(c) It will not be treated as deposit as Mr. Siddharth has given loan to the
company at an interest rate of 8% p.a.
(d) It will not be treated as deposit if Mr. Siddharth gives a written declaration
to the effect that loan is advanced by him from his own source of funds,
not from borrowings or accepting loans or deposits from others and the
company shall disclose the details of money so accepted in the Board’s
Report.
2. With respect to acceptance of deposits from members, which of the below
mentioned statement is correct:
(a) Silver Private Limited cannot accept deposits of more than paid-up share
capital which is ` 50 lakh.
(b) Silver Private Limited can accept deposits of ` 60 lakh from members,
as it is less than twice of its paid up share capital or ` 50 crore, whichever
is less.
(c) Silver Private Limited cannot accept deposits of more than higher of
aggregate of paid-up share capital and free reserves which is ` 70 lakh
and borrowings which is ` 65 lakh.
(d) Silver Private Limited cannot accept deposits of more than aggregate of
paid-up share capital and free reserves, which is ` 70 lakh.
3. Is Silver Private Limited required to appoint internal auditor in accordance with
the provisions of the Companies Act, 2013?
(a) Silver Private Limited is not required to appoint internal auditor as
private companies are not required to appoint internal auditor.
(b) Silver Private Limited is required to appoint internal auditor as
borrowings is below prescribed limited.
(c) Silver Private Limited is required to appoint internal auditor as aggregate
of paid-up share, free reserves and security premium is more than
prescribed limited.
(d) Silver Private Limited is not required to appoint internal auditor as
turnover is less than prescribed limited.
4. Which of the following statement is correct in respect of loan of ` 65 lakh
availed by the company?
(a) Silver Private Limited needs to create and register charge within 30 days
from the date of sanction of loan.
98
(b) Silver Private Limited is not required to create and register charge as the
loan is against the personal guarantee of directors.
(c) Silver Private Limited needs to create and register charge within 15 days
from the date of sanction of loan.
(d) Silver Private Limited needs to create and register charge within 60 days
from the date of sanction of loan.
5. The management of Silver Private Limited for ease of doing business and
reduce compliance burden, proposed, it to be registered as a small company.
Within the provided information and the legal requirements under the
Companies Act, 2013, recommend on the validity of the said proposal:
(a) Proposal is valid, as any private limited company can apply for the status
of small company.
(b) Proposal is invalid, as the Silver Private Limited is not fulfilling the
requirement of turnover of ` 400 crore.
(c) Proposal is valid, as the Silver Private Limited is fulfilling the requirement
of paid up share capital and turnover which is within the prescribed limits.
(d) Proposal is invalid, as Silver Private Limited is fulfilling the requirement
of paid up share capital.
6. The financial particulars of ABC Limited in respect of immediately preceding
financial year are as under:
S. No. Particulars Amount in ` crore 
1 Net worth 280 
2 Turnover 550 
3 Net Profit 5.50 
4 Borrowings 60 
Choose the correct option in terms that whether the provisions of Corporate 
Social Responsibility are applicable to ABC Limited. 
(a) No, as ABC Limited is having net worth of more than ` 250 crore in the
immediately preceding financial year.
(b) Yes, as ABC Limited is having turnover of more than ` 500 crore but
less than ` 800 crore in the immediately preceding financial year.
(c) Yes, as ABC Limited is having net profit of more than ` 5 crore in the
immediately preceding financial year.
(d) Yes, as ABC Limited is having loans and borrowings of more than ` 50
crore in the immediately preceding financial year.
7. Under what circumstances is the requirement for constituting a Corporate
Social Responsibility (CSR) Committee waived, and who is responsible for
discharging the functions of the CSR Committee in such cases?
(a) When the amount to be spent by a company does not exceed fifty lakh
rupees; the Board of Directors assumes the responsibility of the CSR
Committee's functions.
99
Page 4


MODEL TEST PAPER 1 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks) 
Part I is compulsory. 
Case Scenario 1 
Silver Private Limited was incorporated in 2016 having its registered office at 
Gurugram, Haryana. It is registered with an authorised share capital of ` 10 crore 
divided into 1 crore equity shares of ` 10/- each. The paid-up share capital of the 
company is ` 50 lakh divided into 5 lakh equity shares of ` 10/- each. The company 
is in manufacturing of rubber parts to be used in manufacturing of parts of 
passenger vehicles.  
Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) 
on January 8, 2022 had advanced a loan of ` 50 lakh at an interest rate of 8% p.a. 
and the loan is expected to be repaid after a period of thirty six months. 
Silver Private Limited intends to accept deposits of ` 60 lakh from its members for 
the purpose of expansion of its business. The financial particulars of the company 
are as below mentioned: - 
S. No. Particulars Amount (`) 
1 Paid-up share capital 50 lakh 
2 Free Reserves 20 lakh 
3 Security premium 10 lakh 
4 Borrowings from banks 65 lakh 
5 Turnover 200 lakh 
As on the date of acceptance of deposits, the company has not defaulted in 
repayment of borrowings along with interest thereon.   
The Company Secretary of the company informed Board of Directors of the 
company that they need to appoint an internal auditor for audit of the company. The 
Board stated that statutory auditor is already performing audit function and there is 
no need to appoint internal auditor as it causes additional burden on the company. 
The company require funds for the purpose of meeting working capital 
requirements. The company has approached the bank for meeting working capital 
requirements and has availed a loan of ` 65 lakh from bank. The loan is secured 
by the personal guarantee of the directors of the company. 
97
On the basis of above facts and by applying applicable provisions of the Companies 
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of 
four) of the following Multiple Choice Questions (MCQs 1-5) given herein under: -  
1. With respect to loan advances by Mr. Siddharth to Silver Private Limited,
whether the same can be classified as deposit or not?
(a) It will be treated as deposit as the loan is advanced by Mr. Siddharth
who is neither director nor shareholder of the company.
(b) It will be treated as deposit as the loan is given by relative of the director.
(c) It will not be treated as deposit as Mr. Siddharth has given loan to the
company at an interest rate of 8% p.a.
(d) It will not be treated as deposit if Mr. Siddharth gives a written declaration
to the effect that loan is advanced by him from his own source of funds,
not from borrowings or accepting loans or deposits from others and the
company shall disclose the details of money so accepted in the Board’s
Report.
2. With respect to acceptance of deposits from members, which of the below
mentioned statement is correct:
(a) Silver Private Limited cannot accept deposits of more than paid-up share
capital which is ` 50 lakh.
(b) Silver Private Limited can accept deposits of ` 60 lakh from members,
as it is less than twice of its paid up share capital or ` 50 crore, whichever
is less.
(c) Silver Private Limited cannot accept deposits of more than higher of
aggregate of paid-up share capital and free reserves which is ` 70 lakh
and borrowings which is ` 65 lakh.
(d) Silver Private Limited cannot accept deposits of more than aggregate of
paid-up share capital and free reserves, which is ` 70 lakh.
3. Is Silver Private Limited required to appoint internal auditor in accordance with
the provisions of the Companies Act, 2013?
(a) Silver Private Limited is not required to appoint internal auditor as
private companies are not required to appoint internal auditor.
(b) Silver Private Limited is required to appoint internal auditor as
borrowings is below prescribed limited.
(c) Silver Private Limited is required to appoint internal auditor as aggregate
of paid-up share, free reserves and security premium is more than
prescribed limited.
(d) Silver Private Limited is not required to appoint internal auditor as
turnover is less than prescribed limited.
4. Which of the following statement is correct in respect of loan of ` 65 lakh
availed by the company?
(a) Silver Private Limited needs to create and register charge within 30 days
from the date of sanction of loan.
98
(b) Silver Private Limited is not required to create and register charge as the
loan is against the personal guarantee of directors.
(c) Silver Private Limited needs to create and register charge within 15 days
from the date of sanction of loan.
(d) Silver Private Limited needs to create and register charge within 60 days
from the date of sanction of loan.
5. The management of Silver Private Limited for ease of doing business and
reduce compliance burden, proposed, it to be registered as a small company.
Within the provided information and the legal requirements under the
Companies Act, 2013, recommend on the validity of the said proposal:
(a) Proposal is valid, as any private limited company can apply for the status
of small company.
(b) Proposal is invalid, as the Silver Private Limited is not fulfilling the
requirement of turnover of ` 400 crore.
(c) Proposal is valid, as the Silver Private Limited is fulfilling the requirement
of paid up share capital and turnover which is within the prescribed limits.
(d) Proposal is invalid, as Silver Private Limited is fulfilling the requirement
of paid up share capital.
6. The financial particulars of ABC Limited in respect of immediately preceding
financial year are as under:
S. No. Particulars Amount in ` crore 
1 Net worth 280 
2 Turnover 550 
3 Net Profit 5.50 
4 Borrowings 60 
Choose the correct option in terms that whether the provisions of Corporate 
Social Responsibility are applicable to ABC Limited. 
(a) No, as ABC Limited is having net worth of more than ` 250 crore in the
immediately preceding financial year.
(b) Yes, as ABC Limited is having turnover of more than ` 500 crore but
less than ` 800 crore in the immediately preceding financial year.
(c) Yes, as ABC Limited is having net profit of more than ` 5 crore in the
immediately preceding financial year.
(d) Yes, as ABC Limited is having loans and borrowings of more than ` 50
crore in the immediately preceding financial year.
7. Under what circumstances is the requirement for constituting a Corporate
Social Responsibility (CSR) Committee waived, and who is responsible for
discharging the functions of the CSR Committee in such cases?
(a) When the amount to be spent by a company does not exceed fifty lakh
rupees; the Board of Directors assumes the responsibility of the CSR
Committee's functions.
99
(b) When the amount to be spent by a company exceeds fifty lakh rupees;
the Board of Directors assumes the responsibility of the CSR
Committee's functions.
(c) When the amount to be spent by a company does not exceed fifty lakh
rupees; the shareholders assume the responsibility of the CSR
Committee's functions.
(d) When the amount to be spent by a company exceeds fifty lakh rupees;
the shareholders assume the responsibility of the CSR Committee's
functions.
Case Scenario 2 
Vidhya Masterminds LLP was incorporated on 15
th
 April, 2023. Sagar, Manthan, 
Vishnu and Vasuki were partners in the firm. Sagar and Manthan were also the 
designated partners in this firm. The firm was incorporated with the object of 
manufacturing and trading of cycles. The business was going too smoothly.  
But on 30
th
 April, 2023, some Mr. Vidhyaram Tolaramani filed an application to 
registrar that he has a registered trademark in the name of “Vidhya Masters” which 
he has got registered before 15.04.2023. Therefore, the LLP “Vidhya Masterminds 
LLP” should change its name. On the basis of basic investigation, registrar found 
that Mr. Vidhyaram Tolaramani was correct in contention. The registrar sent a 
direction to Vidhya Masterminds LLP to change its name as it too nearly resembles 
with the trademark of Mr. Vidhyaram Tolaramani i.e. “Vidhya Masters”. The notice 
was issued by the registrar on 5
th
 May, 2023 by post but due to some internal 
problem of postal department, notice reached the LLP on 10
th
 May, 2023. Vidhya 
Masterminds LLP ignored the notice and continued working under the same name. 
On 16
th
 August, 2023 the registrar suo-moto allotted the LLP a new name “Sahitya 
Masterminds LLP” and entered this new name in the register of LLP and also issued 
a fresh certificate of incorporation to Vidhya Masterminds LLP with new name. 
Vidhya Masterminds LLP, now “Sahitya Masterminds LLP” was not comfortable 
with new name. It started the process to change the name allotted by the registrar. 
Meanwhile, Vishnu was appointed as designated partner in Vidhya Masterminds 
LLP on 25
th
 July, 2023 but this information was not sent to the registrar. On 20
th
 
June, 2023, Mr. Vasuki had given a written notice to the LLP that he could not 
continue as a partner in LLP with effect from 22
nd
 July, 2023. This cessation from 
the LLP was also not informed by either LLP or Mr. Vasuki, to the Registrar.  
On the basis of above facts and by applying applicable provisions of the Limited 
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct 
answer (one out of four) of the following MCQs (8- 10) given herein under: -  
8. When the registrar directed Vidhya Masterminds LLP to change its name, by
which date the LLP should have changed the name of LLP?
(a) By 5
th
 August, 2023 i.e. within a period of 3 months from the date of issue
of such direction by registrar.
(b) By 10
th
 August, 2023 i.e. within a period of 3 months from the date of
receiving of such direction by the firm.
(c) By any time according to the convenience of Vidhya Masterminds LLP.
100
Page 5


MODEL TEST PAPER 1 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.
PART I – Case Scenario based MCQs (30 Marks) 
Part I is compulsory. 
Case Scenario 1 
Silver Private Limited was incorporated in 2016 having its registered office at 
Gurugram, Haryana. It is registered with an authorised share capital of ` 10 crore 
divided into 1 crore equity shares of ` 10/- each. The paid-up share capital of the 
company is ` 50 lakh divided into 5 lakh equity shares of ` 10/- each. The company 
is in manufacturing of rubber parts to be used in manufacturing of parts of 
passenger vehicles.  
Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) 
on January 8, 2022 had advanced a loan of ` 50 lakh at an interest rate of 8% p.a. 
and the loan is expected to be repaid after a period of thirty six months. 
Silver Private Limited intends to accept deposits of ` 60 lakh from its members for 
the purpose of expansion of its business. The financial particulars of the company 
are as below mentioned: - 
S. No. Particulars Amount (`) 
1 Paid-up share capital 50 lakh 
2 Free Reserves 20 lakh 
3 Security premium 10 lakh 
4 Borrowings from banks 65 lakh 
5 Turnover 200 lakh 
As on the date of acceptance of deposits, the company has not defaulted in 
repayment of borrowings along with interest thereon.   
The Company Secretary of the company informed Board of Directors of the 
company that they need to appoint an internal auditor for audit of the company. The 
Board stated that statutory auditor is already performing audit function and there is 
no need to appoint internal auditor as it causes additional burden on the company. 
The company require funds for the purpose of meeting working capital 
requirements. The company has approached the bank for meeting working capital 
requirements and has availed a loan of ` 65 lakh from bank. The loan is secured 
by the personal guarantee of the directors of the company. 
97
On the basis of above facts and by applying applicable provisions of the Companies 
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of 
four) of the following Multiple Choice Questions (MCQs 1-5) given herein under: -  
1. With respect to loan advances by Mr. Siddharth to Silver Private Limited,
whether the same can be classified as deposit or not?
(a) It will be treated as deposit as the loan is advanced by Mr. Siddharth
who is neither director nor shareholder of the company.
(b) It will be treated as deposit as the loan is given by relative of the director.
(c) It will not be treated as deposit as Mr. Siddharth has given loan to the
company at an interest rate of 8% p.a.
(d) It will not be treated as deposit if Mr. Siddharth gives a written declaration
to the effect that loan is advanced by him from his own source of funds,
not from borrowings or accepting loans or deposits from others and the
company shall disclose the details of money so accepted in the Board’s
Report.
2. With respect to acceptance of deposits from members, which of the below
mentioned statement is correct:
(a) Silver Private Limited cannot accept deposits of more than paid-up share
capital which is ` 50 lakh.
(b) Silver Private Limited can accept deposits of ` 60 lakh from members,
as it is less than twice of its paid up share capital or ` 50 crore, whichever
is less.
(c) Silver Private Limited cannot accept deposits of more than higher of
aggregate of paid-up share capital and free reserves which is ` 70 lakh
and borrowings which is ` 65 lakh.
(d) Silver Private Limited cannot accept deposits of more than aggregate of
paid-up share capital and free reserves, which is ` 70 lakh.
3. Is Silver Private Limited required to appoint internal auditor in accordance with
the provisions of the Companies Act, 2013?
(a) Silver Private Limited is not required to appoint internal auditor as
private companies are not required to appoint internal auditor.
(b) Silver Private Limited is required to appoint internal auditor as
borrowings is below prescribed limited.
(c) Silver Private Limited is required to appoint internal auditor as aggregate
of paid-up share, free reserves and security premium is more than
prescribed limited.
(d) Silver Private Limited is not required to appoint internal auditor as
turnover is less than prescribed limited.
4. Which of the following statement is correct in respect of loan of ` 65 lakh
availed by the company?
(a) Silver Private Limited needs to create and register charge within 30 days
from the date of sanction of loan.
98
(b) Silver Private Limited is not required to create and register charge as the
loan is against the personal guarantee of directors.
(c) Silver Private Limited needs to create and register charge within 15 days
from the date of sanction of loan.
(d) Silver Private Limited needs to create and register charge within 60 days
from the date of sanction of loan.
5. The management of Silver Private Limited for ease of doing business and
reduce compliance burden, proposed, it to be registered as a small company.
Within the provided information and the legal requirements under the
Companies Act, 2013, recommend on the validity of the said proposal:
(a) Proposal is valid, as any private limited company can apply for the status
of small company.
(b) Proposal is invalid, as the Silver Private Limited is not fulfilling the
requirement of turnover of ` 400 crore.
(c) Proposal is valid, as the Silver Private Limited is fulfilling the requirement
of paid up share capital and turnover which is within the prescribed limits.
(d) Proposal is invalid, as Silver Private Limited is fulfilling the requirement
of paid up share capital.
6. The financial particulars of ABC Limited in respect of immediately preceding
financial year are as under:
S. No. Particulars Amount in ` crore 
1 Net worth 280 
2 Turnover 550 
3 Net Profit 5.50 
4 Borrowings 60 
Choose the correct option in terms that whether the provisions of Corporate 
Social Responsibility are applicable to ABC Limited. 
(a) No, as ABC Limited is having net worth of more than ` 250 crore in the
immediately preceding financial year.
(b) Yes, as ABC Limited is having turnover of more than ` 500 crore but
less than ` 800 crore in the immediately preceding financial year.
(c) Yes, as ABC Limited is having net profit of more than ` 5 crore in the
immediately preceding financial year.
(d) Yes, as ABC Limited is having loans and borrowings of more than ` 50
crore in the immediately preceding financial year.
7. Under what circumstances is the requirement for constituting a Corporate
Social Responsibility (CSR) Committee waived, and who is responsible for
discharging the functions of the CSR Committee in such cases?
(a) When the amount to be spent by a company does not exceed fifty lakh
rupees; the Board of Directors assumes the responsibility of the CSR
Committee's functions.
99
(b) When the amount to be spent by a company exceeds fifty lakh rupees;
the Board of Directors assumes the responsibility of the CSR
Committee's functions.
(c) When the amount to be spent by a company does not exceed fifty lakh
rupees; the shareholders assume the responsibility of the CSR
Committee's functions.
(d) When the amount to be spent by a company exceeds fifty lakh rupees;
the shareholders assume the responsibility of the CSR Committee's
functions.
Case Scenario 2 
Vidhya Masterminds LLP was incorporated on 15
th
 April, 2023. Sagar, Manthan, 
Vishnu and Vasuki were partners in the firm. Sagar and Manthan were also the 
designated partners in this firm. The firm was incorporated with the object of 
manufacturing and trading of cycles. The business was going too smoothly.  
But on 30
th
 April, 2023, some Mr. Vidhyaram Tolaramani filed an application to 
registrar that he has a registered trademark in the name of “Vidhya Masters” which 
he has got registered before 15.04.2023. Therefore, the LLP “Vidhya Masterminds 
LLP” should change its name. On the basis of basic investigation, registrar found 
that Mr. Vidhyaram Tolaramani was correct in contention. The registrar sent a 
direction to Vidhya Masterminds LLP to change its name as it too nearly resembles 
with the trademark of Mr. Vidhyaram Tolaramani i.e. “Vidhya Masters”. The notice 
was issued by the registrar on 5
th
 May, 2023 by post but due to some internal 
problem of postal department, notice reached the LLP on 10
th
 May, 2023. Vidhya 
Masterminds LLP ignored the notice and continued working under the same name. 
On 16
th
 August, 2023 the registrar suo-moto allotted the LLP a new name “Sahitya 
Masterminds LLP” and entered this new name in the register of LLP and also issued 
a fresh certificate of incorporation to Vidhya Masterminds LLP with new name. 
Vidhya Masterminds LLP, now “Sahitya Masterminds LLP” was not comfortable 
with new name. It started the process to change the name allotted by the registrar. 
Meanwhile, Vishnu was appointed as designated partner in Vidhya Masterminds 
LLP on 25
th
 July, 2023 but this information was not sent to the registrar. On 20
th
 
June, 2023, Mr. Vasuki had given a written notice to the LLP that he could not 
continue as a partner in LLP with effect from 22
nd
 July, 2023. This cessation from 
the LLP was also not informed by either LLP or Mr. Vasuki, to the Registrar.  
On the basis of above facts and by applying applicable provisions of the Limited 
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct 
answer (one out of four) of the following MCQs (8- 10) given herein under: -  
8. When the registrar directed Vidhya Masterminds LLP to change its name, by
which date the LLP should have changed the name of LLP?
(a) By 5
th
 August, 2023 i.e. within a period of 3 months from the date of issue
of such direction by registrar.
(b) By 10
th
 August, 2023 i.e. within a period of 3 months from the date of
receiving of such direction by the firm.
(c) By any time according to the convenience of Vidhya Masterminds LLP.
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(d) Vidhya Masterminds LLP is not liable to change its name.
9. Vishnu was appointed as designated partner in the Vidhya Masterminds LLP
on 25
th
 July, 2023. By what time limit the LLP should have informed the
registrar?
(a) 9
th
 August, 2023 i.e. within 15 days of appointment
(b) 24
th
 August, 2023 i.e. within 30 days of appointment
(c) 25
th
 August, 2023 i.e. within 1 month of appointment
(d) 25
th
 October i.e. within 3 month of appointment.
10. Whether Mr. Vasuki will be liable for penalty for not intimating the registrar
about the appointment of Mr. Vishnu as designated partner?
(a) No, as he was not partner in LLP on the date of appointment of
designated partner.
(b) Yes, as former partner is to be regarded still being a partner of the LLP
unless a notice has been delivered to the Registrar by former partner or
LLP.
(c) Yes, even if a notice has been delivered to the Registrar by LLP about
his retirement.
(d) No, in any case Mr. Vasuki will not be liable.
Case Scenario 3 
Tech Inspiration Private Limited was incorporated on 30.06.2018. The main object 
of the company was to provide guidance classes for engineering aspirants. For this 
purpose, they opened a coaching center at Freedom Plaza, Near Bhagwan Talkies, 
Bye Pass Road, Agra. The premise was owned by the company. The company also 
made a “Employee Appointment Committee” for the systematic selection and 
appointment of employees including faculties for teaching. In the first slab, 
committee appointed nine teachers, 3 clerical staff and one peon. For the purpose 
of expansion of business, company decided to open a branch of the company at 
nearby city of Agra. After the due research, the company decided to open its branch 
at city “Bharatpur” which was just 50 kilometers far from Agra. The company 
approached Mr. Raghuram Meena owner of land at Bharatpur suitable for 
company. Mr. Raghuram Meena leased his land for ten years to Tech Inspiration 
Private Limited. The land had a small temple of lord Ganpati at its centre. The 
company constructed the classrooms on the land and many students joined the 
coaching classes. Besides it, the temple generated some income in the form of 
“Chadhava” (donation). Mr. Raghuram Meena claimed the income of temple with 
the contention that he had leased only the land and not the temple.  
Further one more problem arose in the company. “Employee Appointment 
Committee” found that one of the faculties, Mr. Nitesh Gupta was not performing 
well. He was not justifying his duties. Therefore, “Employee Appointment 
Committee” decided to terminate him with effect from 31.01.2024 and send him 
notice of termination by properly addressing and by registered post to Mr. Nitesh 
Gupta. Mr. Nitesh Gupta refused to accept the notice and returned back it to the 
postman. After two months, on 01.04.2024, Mr. Nitesh Gupta filed a suit against 
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