Corporate and Other Laws (Group I) Model Test Paper - 7 (Answers) | Model Test Papers for CA Intermediate PDF Download

 Page 1


ANSWER OF MODEL TEST PAPER 7 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes— 
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
455
Page 2


ANSWER OF MODEL TEST PAPER 7 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes— 
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
455
 Exemption: As per the proviso to section 2(40), the financial statement, 
with respect to one person company, small company, dormant company 
and private company (if such private company is a start-up) may not 
include the cash flow statement.  
 In the instant case, Mr. P has to prepare the prescribed financial 
statements except Cash Flow Statement; since Nath Private Limited is 
a start-up private company. 
(b) According to section 139(2) of the Companies Act, 2013, no listed 
company or a company belonging to such class or classes of companies 
as may be prescribed, shall appoint or re-appoint— 
(a)  an individual as auditor for more than one term of five consecutive 
years; and 
(b)  an audit firm as auditor for more than two terms of five consecutive 
years. 
Provided that – 
(i) an individual auditor who has completed his term under clause (a) 
shall not be eligible for re-appointment as auditor in the same 
company for five years from the completion of his term; 
(ii) an audit firm which has completed its term under clause (b), shall 
not be eligible for re-appointment as auditor in the same company 
for five years from the completion of such term.  
 Provided further that as on the date of appointment no audit firm having 
a common partner or partners to the other audit firm, whose tenure has 
expired in a company immediately preceding the financial year, shall be 
appointed as auditor of the same company for a period of five years. 
 As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors) 
Rules, 2014, if a partner, who is in charge of an audit firm and also 
certifies the financial statements of the company, retires from the said 
firm and joins another firm of chartered accountants, such other firm shall 
also be ineligible to be appointed for a period of five years. 
 Here, Mr. Ramchandra has retired from A & Associates and joined Gupta 
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates 
(and certifies the financial statement of the company) in A & Associates. 
He retires from A & Associates and joins Gupta & Gupta firm.  
 As per the facts of the question and provisions of law, Gupta & Gupta 
Firm will also be ineligible, to be appointed as auditor of Badri Limited 
(listed company) for a period of 5 years.  
(c) Under provisions of section 5 of the Foreign Exchange Management Act, 
1999 certain Rules have been made for drawal of Foreign Exchange for 
Current Account transactions. As per these Rules, Foreign Exchange for 
some of the Current Account transactions is prohibited. As regards some 
other Current Account transactions, Foreign Exchange can be drawn 
with prior permission of the Central Government while in case of some 
456
Page 3


ANSWER OF MODEL TEST PAPER 7 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes— 
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
455
 Exemption: As per the proviso to section 2(40), the financial statement, 
with respect to one person company, small company, dormant company 
and private company (if such private company is a start-up) may not 
include the cash flow statement.  
 In the instant case, Mr. P has to prepare the prescribed financial 
statements except Cash Flow Statement; since Nath Private Limited is 
a start-up private company. 
(b) According to section 139(2) of the Companies Act, 2013, no listed 
company or a company belonging to such class or classes of companies 
as may be prescribed, shall appoint or re-appoint— 
(a)  an individual as auditor for more than one term of five consecutive 
years; and 
(b)  an audit firm as auditor for more than two terms of five consecutive 
years. 
Provided that – 
(i) an individual auditor who has completed his term under clause (a) 
shall not be eligible for re-appointment as auditor in the same 
company for five years from the completion of his term; 
(ii) an audit firm which has completed its term under clause (b), shall 
not be eligible for re-appointment as auditor in the same company 
for five years from the completion of such term.  
 Provided further that as on the date of appointment no audit firm having 
a common partner or partners to the other audit firm, whose tenure has 
expired in a company immediately preceding the financial year, shall be 
appointed as auditor of the same company for a period of five years. 
 As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors) 
Rules, 2014, if a partner, who is in charge of an audit firm and also 
certifies the financial statements of the company, retires from the said 
firm and joins another firm of chartered accountants, such other firm shall 
also be ineligible to be appointed for a period of five years. 
 Here, Mr. Ramchandra has retired from A & Associates and joined Gupta 
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates 
(and certifies the financial statement of the company) in A & Associates. 
He retires from A & Associates and joins Gupta & Gupta firm.  
 As per the facts of the question and provisions of law, Gupta & Gupta 
Firm will also be ineligible, to be appointed as auditor of Badri Limited 
(listed company) for a period of 5 years.  
(c) Under provisions of section 5 of the Foreign Exchange Management Act, 
1999 certain Rules have been made for drawal of Foreign Exchange for 
Current Account transactions. As per these Rules, Foreign Exchange for 
some of the Current Account transactions is prohibited. As regards some 
other Current Account transactions, Foreign Exchange can be drawn 
with prior permission of the Central Government while in case of some 
456
Current Account transactions, prior permission of Reserve Bank of India 
is required. 
 Accordingly, Payment of commission on exports made towards equity 
investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of 
Indian companies, is a transactions for which drawal of foreign exchange 
is prohibited. 
 In all the cases, where remittance of Foreign Exchange is allowed, either 
by general or specific permission, the remitter has to obtain the Foreign 
Exchange from an Authorised Person. 
2. (a) Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states 
that the amount deposited in the ‘Deposit Repayment Reserve Account’ 
shall not be used by a company for any purpose other than repayment 
of deposits.  
 In the given question, Samay Publishing Limited wants to utilise a portion 
of ‘Deposit Repayment Reserve Account’ to pay off its short-term 
creditors. Since there is a prohibition, Samay Publishing Limited is not 
permitted to utilise its ‘Deposit Repayment Reserve Account’ to pay off 
its short-term creditors.   
(b) According to section 2(69) of the Companies Act, 2013, Promoter means 
a person:- 
(a) Who has been named as such in a prospectus or is identified by 
the company in the annual return; or 
(b) Who has control over the affairs of the company, directly or 
indirectly whether as a shareholder, director or otherwise; or 
(c) In accordance with whose advice, directions or instructions the 
Board of Directors of the Company is accustomed to act. 
 Provided that nothing in sub-clause (c) shall apply to a person who is 
acting merely in a professional capacity.  
 As the job profile of Mr. Kaushal is only limited to advise the Board of 
Directors on various compliance matters, strategies, business plans and 
risk matters relating to business of the company and that to only in a 
professional capacity, he will not be classified as a Promoter of XYZ 
Limited.  
 (c) (i) Person  
 According to section 3(42) of the General Clauses Act, 1897, 
‘Person’ shall include any company or association or body of 
individuals, whether incorporated or not. 
(ii)  Document  
 According to section 3(18) of the General Clauses Act, 1897, 
‘Document’ shall include any matter written, expressed or 
described upon any substance by means of letters, figures or marks 
or by more than one of those means which is intended to be used 
or which may be used, for the purpose or recording that matter. 
457
Page 4


ANSWER OF MODEL TEST PAPER 7 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes— 
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
455
 Exemption: As per the proviso to section 2(40), the financial statement, 
with respect to one person company, small company, dormant company 
and private company (if such private company is a start-up) may not 
include the cash flow statement.  
 In the instant case, Mr. P has to prepare the prescribed financial 
statements except Cash Flow Statement; since Nath Private Limited is 
a start-up private company. 
(b) According to section 139(2) of the Companies Act, 2013, no listed 
company or a company belonging to such class or classes of companies 
as may be prescribed, shall appoint or re-appoint— 
(a)  an individual as auditor for more than one term of five consecutive 
years; and 
(b)  an audit firm as auditor for more than two terms of five consecutive 
years. 
Provided that – 
(i) an individual auditor who has completed his term under clause (a) 
shall not be eligible for re-appointment as auditor in the same 
company for five years from the completion of his term; 
(ii) an audit firm which has completed its term under clause (b), shall 
not be eligible for re-appointment as auditor in the same company 
for five years from the completion of such term.  
 Provided further that as on the date of appointment no audit firm having 
a common partner or partners to the other audit firm, whose tenure has 
expired in a company immediately preceding the financial year, shall be 
appointed as auditor of the same company for a period of five years. 
 As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors) 
Rules, 2014, if a partner, who is in charge of an audit firm and also 
certifies the financial statements of the company, retires from the said 
firm and joins another firm of chartered accountants, such other firm shall 
also be ineligible to be appointed for a period of five years. 
 Here, Mr. Ramchandra has retired from A & Associates and joined Gupta 
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates 
(and certifies the financial statement of the company) in A & Associates. 
He retires from A & Associates and joins Gupta & Gupta firm.  
 As per the facts of the question and provisions of law, Gupta & Gupta 
Firm will also be ineligible, to be appointed as auditor of Badri Limited 
(listed company) for a period of 5 years.  
(c) Under provisions of section 5 of the Foreign Exchange Management Act, 
1999 certain Rules have been made for drawal of Foreign Exchange for 
Current Account transactions. As per these Rules, Foreign Exchange for 
some of the Current Account transactions is prohibited. As regards some 
other Current Account transactions, Foreign Exchange can be drawn 
with prior permission of the Central Government while in case of some 
456
Current Account transactions, prior permission of Reserve Bank of India 
is required. 
 Accordingly, Payment of commission on exports made towards equity 
investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of 
Indian companies, is a transactions for which drawal of foreign exchange 
is prohibited. 
 In all the cases, where remittance of Foreign Exchange is allowed, either 
by general or specific permission, the remitter has to obtain the Foreign 
Exchange from an Authorised Person. 
2. (a) Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states 
that the amount deposited in the ‘Deposit Repayment Reserve Account’ 
shall not be used by a company for any purpose other than repayment 
of deposits.  
 In the given question, Samay Publishing Limited wants to utilise a portion 
of ‘Deposit Repayment Reserve Account’ to pay off its short-term 
creditors. Since there is a prohibition, Samay Publishing Limited is not 
permitted to utilise its ‘Deposit Repayment Reserve Account’ to pay off 
its short-term creditors.   
(b) According to section 2(69) of the Companies Act, 2013, Promoter means 
a person:- 
(a) Who has been named as such in a prospectus or is identified by 
the company in the annual return; or 
(b) Who has control over the affairs of the company, directly or 
indirectly whether as a shareholder, director or otherwise; or 
(c) In accordance with whose advice, directions or instructions the 
Board of Directors of the Company is accustomed to act. 
 Provided that nothing in sub-clause (c) shall apply to a person who is 
acting merely in a professional capacity.  
 As the job profile of Mr. Kaushal is only limited to advise the Board of 
Directors on various compliance matters, strategies, business plans and 
risk matters relating to business of the company and that to only in a 
professional capacity, he will not be classified as a Promoter of XYZ 
Limited.  
 (c) (i) Person  
 According to section 3(42) of the General Clauses Act, 1897, 
‘Person’ shall include any company or association or body of 
individuals, whether incorporated or not. 
(ii)  Document  
 According to section 3(18) of the General Clauses Act, 1897, 
‘Document’ shall include any matter written, expressed or 
described upon any substance by means of letters, figures or marks 
or by more than one of those means which is intended to be used 
or which may be used, for the purpose or recording that matter. 
457
3. (a) Section 8 of the Companies Act, 2013 deals with the formation of 
companies which are formed to promote the charitable objects of 
commerce, art, science, education, sports etc. Such company intends to 
apply its profit in promoting its objects. Section 8 companies are 
registered by the Registrar only when a license is issued by the Central 
Government to them. Since, Trinity school was a Section 8 company and 
it had started violating the objects of its objective clause, hence in such 
a situation the following powers can be exercised by the Central 
Government: 
(i) The Central Government may by order revoke the licence of the 
company where the company contravenes any of the requirements 
or the conditions of this sections subject to which a licence is issued 
or where the affairs of the company are conducted fraudulently, or 
violative of the objects of the company or prejudicial to public 
interest, and on revocation the Registrar shall put ‘Limited’ or 
‘Private Limited’ against the company’s name in the register. But 
before such revocation, the Central Government must give it a 
written notice of its intention to revoke the licence and opportunity 
to be heard in the matter.  
(ii) Where a licence is revoked, the Central Government may, by order, 
if it is satisfied that it is essential in the public interest, direct that 
the company be wound up under this Act or amalgamated with 
another company registered under this section. However, no such 
order shall be made unless the company is given a reasonable 
opportunity of being heard.  
(iii) Where a licence is revoked and where the Central Government is 
satisfied that it is essential in the public interest that the company 
registered under this section should be amalgamated with another 
company registered under this section and having similar objects, 
then, notwithstanding anything to the contrary contained in this Act, 
the Central Government may, by order, provide for such 
amalgamation to form a single company with such constitution, 
properties, powers, rights, interest, authorities and privileges and 
with such liabilities, duties and obligations as may be specified in 
the order. 
(b) Validity of Resolution passed in the EGM called by the 
Requisitionists 
 A Proxy is an instrument in writing executed by a shareholder authorizing 
another person to attend a meeting and to vote thereat on his behalf and 
in his absence. As per the provisions of section 105 of the Companies 
Act, 2013, every shareholder who is entitled to attend and vote has a 
statutory right to appoint another person as his proxy. Section 105(4) 
provides that a proxy received 48 hours before the meeting will be valid. 
Further, any provision in the articles of association of the company 
requiring instrument of proxy to be lodged with the company more than 
48 hours before a meeting shall have effect as if 48 hours had been 
specified therein.  
458
Page 5


ANSWER OF MODEL TEST PAPER 7 
INTERMEDIATE COURSE: GROUP – I  
PAPER – 2: CORPORATE AND OTHER LAWS 
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes— 
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
455
 Exemption: As per the proviso to section 2(40), the financial statement, 
with respect to one person company, small company, dormant company 
and private company (if such private company is a start-up) may not 
include the cash flow statement.  
 In the instant case, Mr. P has to prepare the prescribed financial 
statements except Cash Flow Statement; since Nath Private Limited is 
a start-up private company. 
(b) According to section 139(2) of the Companies Act, 2013, no listed 
company or a company belonging to such class or classes of companies 
as may be prescribed, shall appoint or re-appoint— 
(a)  an individual as auditor for more than one term of five consecutive 
years; and 
(b)  an audit firm as auditor for more than two terms of five consecutive 
years. 
Provided that – 
(i) an individual auditor who has completed his term under clause (a) 
shall not be eligible for re-appointment as auditor in the same 
company for five years from the completion of his term; 
(ii) an audit firm which has completed its term under clause (b), shall 
not be eligible for re-appointment as auditor in the same company 
for five years from the completion of such term.  
 Provided further that as on the date of appointment no audit firm having 
a common partner or partners to the other audit firm, whose tenure has 
expired in a company immediately preceding the financial year, shall be 
appointed as auditor of the same company for a period of five years. 
 As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors) 
Rules, 2014, if a partner, who is in charge of an audit firm and also 
certifies the financial statements of the company, retires from the said 
firm and joins another firm of chartered accountants, such other firm shall 
also be ineligible to be appointed for a period of five years. 
 Here, Mr. Ramchandra has retired from A & Associates and joined Gupta 
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates 
(and certifies the financial statement of the company) in A & Associates. 
He retires from A & Associates and joins Gupta & Gupta firm.  
 As per the facts of the question and provisions of law, Gupta & Gupta 
Firm will also be ineligible, to be appointed as auditor of Badri Limited 
(listed company) for a period of 5 years.  
(c) Under provisions of section 5 of the Foreign Exchange Management Act, 
1999 certain Rules have been made for drawal of Foreign Exchange for 
Current Account transactions. As per these Rules, Foreign Exchange for 
some of the Current Account transactions is prohibited. As regards some 
other Current Account transactions, Foreign Exchange can be drawn 
with prior permission of the Central Government while in case of some 
456
Current Account transactions, prior permission of Reserve Bank of India 
is required. 
 Accordingly, Payment of commission on exports made towards equity 
investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of 
Indian companies, is a transactions for which drawal of foreign exchange 
is prohibited. 
 In all the cases, where remittance of Foreign Exchange is allowed, either 
by general or specific permission, the remitter has to obtain the Foreign 
Exchange from an Authorised Person. 
2. (a) Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states 
that the amount deposited in the ‘Deposit Repayment Reserve Account’ 
shall not be used by a company for any purpose other than repayment 
of deposits.  
 In the given question, Samay Publishing Limited wants to utilise a portion 
of ‘Deposit Repayment Reserve Account’ to pay off its short-term 
creditors. Since there is a prohibition, Samay Publishing Limited is not 
permitted to utilise its ‘Deposit Repayment Reserve Account’ to pay off 
its short-term creditors.   
(b) According to section 2(69) of the Companies Act, 2013, Promoter means 
a person:- 
(a) Who has been named as such in a prospectus or is identified by 
the company in the annual return; or 
(b) Who has control over the affairs of the company, directly or 
indirectly whether as a shareholder, director or otherwise; or 
(c) In accordance with whose advice, directions or instructions the 
Board of Directors of the Company is accustomed to act. 
 Provided that nothing in sub-clause (c) shall apply to a person who is 
acting merely in a professional capacity.  
 As the job profile of Mr. Kaushal is only limited to advise the Board of 
Directors on various compliance matters, strategies, business plans and 
risk matters relating to business of the company and that to only in a 
professional capacity, he will not be classified as a Promoter of XYZ 
Limited.  
 (c) (i) Person  
 According to section 3(42) of the General Clauses Act, 1897, 
‘Person’ shall include any company or association or body of 
individuals, whether incorporated or not. 
(ii)  Document  
 According to section 3(18) of the General Clauses Act, 1897, 
‘Document’ shall include any matter written, expressed or 
described upon any substance by means of letters, figures or marks 
or by more than one of those means which is intended to be used 
or which may be used, for the purpose or recording that matter. 
457
3. (a) Section 8 of the Companies Act, 2013 deals with the formation of 
companies which are formed to promote the charitable objects of 
commerce, art, science, education, sports etc. Such company intends to 
apply its profit in promoting its objects. Section 8 companies are 
registered by the Registrar only when a license is issued by the Central 
Government to them. Since, Trinity school was a Section 8 company and 
it had started violating the objects of its objective clause, hence in such 
a situation the following powers can be exercised by the Central 
Government: 
(i) The Central Government may by order revoke the licence of the 
company where the company contravenes any of the requirements 
or the conditions of this sections subject to which a licence is issued 
or where the affairs of the company are conducted fraudulently, or 
violative of the objects of the company or prejudicial to public 
interest, and on revocation the Registrar shall put ‘Limited’ or 
‘Private Limited’ against the company’s name in the register. But 
before such revocation, the Central Government must give it a 
written notice of its intention to revoke the licence and opportunity 
to be heard in the matter.  
(ii) Where a licence is revoked, the Central Government may, by order, 
if it is satisfied that it is essential in the public interest, direct that 
the company be wound up under this Act or amalgamated with 
another company registered under this section. However, no such 
order shall be made unless the company is given a reasonable 
opportunity of being heard.  
(iii) Where a licence is revoked and where the Central Government is 
satisfied that it is essential in the public interest that the company 
registered under this section should be amalgamated with another 
company registered under this section and having similar objects, 
then, notwithstanding anything to the contrary contained in this Act, 
the Central Government may, by order, provide for such 
amalgamation to form a single company with such constitution, 
properties, powers, rights, interest, authorities and privileges and 
with such liabilities, duties and obligations as may be specified in 
the order. 
(b) Validity of Resolution passed in the EGM called by the 
Requisitionists 
 A Proxy is an instrument in writing executed by a shareholder authorizing 
another person to attend a meeting and to vote thereat on his behalf and 
in his absence. As per the provisions of section 105 of the Companies 
Act, 2013, every shareholder who is entitled to attend and vote has a 
statutory right to appoint another person as his proxy. Section 105(4) 
provides that a proxy received 48 hours before the meeting will be valid. 
Further, any provision in the articles of association of the company 
requiring instrument of proxy to be lodged with the company more than 
48 hours before a meeting shall have effect as if 48 hours had been 
specified therein.  
458
 Thus, in case of member X, the proxy Y will be permitted to represent as 
proxy on his behalf as form for appointing proxy was submitted within 
the permitted time. 
 However, in the case of member W, the proxy M will be permitted to 
represent as the proxy. Whereas submission of form authorizing N to 
represent as proxy was deposited in less than 48 hours before the 
meeting, so N will not be allowed to represent W. 
 (c) (i) Ambiguous definitions: Sometime, we may find that the definition 
section may itself be ambiguous, and so it may have to be 
interpreted in the light of the other provisions of the Act and having 
regard to the ordinary meaning of the word defined. Such type of 
definition is not to be read in isolation.  It must be read in the context 
of the phrase which it defines, realising that the function of a 
definition is to give accuracy and certainty to a word or phrase 
which would otherwise be vague and uncertain but not to contradict 
it or depose it altogether. 
(ii) Definitions subject to a contrary context: When a word is 
defined to bear a number of inclusive meanings, the sense in which 
the word is used in a particular provision must be ascertained from 
the context of the scheme of the Act, the language of the provision 
and the object intended to be served thereby. 
4. (a) Persons responsible to maintain books: As per section 128 (6) of the 
Companies Act, 2013, the person responsible to take all reasonable 
steps to secure compliance by the company with the requirement of 
maintenance of books of account etc. shall be: 
(a) Managing Director,  
(b) Whole-Time Director, in charge of finance  
(c) Chief Financial Officer  
(d) Any other person of a company charged by the Board with duty of 
complying with provisions of section 128. 
(b) Small limited liability partnership  
 According to section 2(1)(ta) of the Limited Liability Partnership Act, 
2008, small limited liability partnership means a limited liability 
partnership: 
(i)  the contribution of which, does not exceed 25 lakh rupees or such 
higher amount, not exceeding 5 crore rupees, as may be 
prescribed; and 
(ii)  the turnover of which, as per the Statement of Accounts and 
Solvency for the immediately preceding financial year, does not 
exceed 40 lakh rupees or such higher amount, not exceeding 50 
crore rupees, as may be prescribed; or 
(iii)  which meets such other requirements as may be prescribed, and 
fulfils such terms and conditions as may be prescribed. 
459