Corporate and Other Laws (Group I) Model Test Paper - 6 (Questions) | Model Test Papers for CA Intermediate PDF Download

 Page 1


MODEL TEST PAPER 6  
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 
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January 
1999 by Mr. Vicky Tripathi and his family members. Both the companies are 
engaged in the business of manufacturing machineries used in agricultural sector. 
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the 
daily operations of both the companies. Vasudha Private Limited is wholly owned 
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash 
Limited.  
Due to the poor economic conditions in the agriculture sector and shifting of the 
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited 
is dipping and its bottom line has been in the red for the last couple of years. The 
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore. 
Prakash Limited didn’t pay any dividends during the last four years. Prakash 
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas 
paid-up share capital is ` 918 crore as per its latest audited financial statement 
and loss of ` 9.8 crore has not been deducted from such amount of free reserves. 
Since pressure from shareholders of the free float is mounting, management at 
Prakash Limited decided to pay dividend this year out of accumulated profit. 
Finally, the dividend was declared on 31
st 
August 2024. Some of the dividend 
remained unpaid as on 30
th
 September 2024, on account of operation of 
law; this was transferred to unpaid Dividend Account and a statement containing 
only the names of such beneficiaries was hosted on the website of the company 
on 9
th
 November 2024. 
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad 
and is not required to appoint an independent director under section 149(4). During 
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590 
147
Page 2


MODEL TEST PAPER 6  
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 
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January 
1999 by Mr. Vicky Tripathi and his family members. Both the companies are 
engaged in the business of manufacturing machineries used in agricultural sector. 
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the 
daily operations of both the companies. Vasudha Private Limited is wholly owned 
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash 
Limited.  
Due to the poor economic conditions in the agriculture sector and shifting of the 
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited 
is dipping and its bottom line has been in the red for the last couple of years. The 
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore. 
Prakash Limited didn’t pay any dividends during the last four years. Prakash 
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas 
paid-up share capital is ` 918 crore as per its latest audited financial statement 
and loss of ` 9.8 crore has not been deducted from such amount of free reserves. 
Since pressure from shareholders of the free float is mounting, management at 
Prakash Limited decided to pay dividend this year out of accumulated profit. 
Finally, the dividend was declared on 31
st 
August 2024. Some of the dividend 
remained unpaid as on 30
th
 September 2024, on account of operation of 
law; this was transferred to unpaid Dividend Account and a statement containing 
only the names of such beneficiaries was hosted on the website of the company 
on 9
th
 November 2024. 
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad 
and is not required to appoint an independent director under section 149(4). During 
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590 
147
crore and net profit was ` 45.8 crore. The profits and other information for the 
immediately preceding three years are given below: 
Particulars Year ended 
31.3.2024  
(` in crore) 
Year ended 
31.3.2023  
(` in crore) 
Year ended 
31.3.2022  
(` in crore) 
Net Profit for the year as per section 
198 (in accordance with applicable 
provisions) 
41.6 42.9 28 
The Board of Directors of Vasudha Private Limited is not clear whether they have 
to compulsorily form a CSR committee. In order to avoid adverse legal 
consequences, Vasudha Private Limited constituted a CSR committee comprising 
of two (2) non-executive directors and one (1) executive director who was 
appointed as chairperson of the committee. 
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, of 2 marks each) given 
herein under:  
1.  In case of Prakash Limited, regarding the unpaid dividend, which of the 
following statements is correct?  
(a)  Prakash Limited is guilty, of non-payment of dividend, because some of 
the dividends remain unpaid even after 30 days of declaration. 
(b)  Prakash Limited is guilty, because the list of beneficiaries of unpaid 
dividend is hosted on the website after 30 days from the date it falls in 
the category of unpaid dividend.  
(c)  Prakash Limited is guilty, because the list of beneficiaries does not 
contain the latest known address of beneficiaries and the amount 
unpaid. 
(d)  Prakash Limited is not guilty, because it has full-filled all the provisions 
of law pertaining to unpaid dividend.  
2.  During the current year, is Vasudha Private Limited required to constitute CSR 
committee under the provisions of the Companies Act, 2013? 
(a)  No, because it is a private company 
(b)  No, because it is an unlisted company and it has net-worth less than         
` 500 crore 
(c)  Yes, because despite being unlisted company its turnover is above ` 500 
crore 
(d)  Yes, because the company meets the threshold criteria having net profits 
exceeding ?5 crore in the immediately preceding financial year 
  
148
Page 3


MODEL TEST PAPER 6  
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 
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January 
1999 by Mr. Vicky Tripathi and his family members. Both the companies are 
engaged in the business of manufacturing machineries used in agricultural sector. 
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the 
daily operations of both the companies. Vasudha Private Limited is wholly owned 
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash 
Limited.  
Due to the poor economic conditions in the agriculture sector and shifting of the 
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited 
is dipping and its bottom line has been in the red for the last couple of years. The 
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore. 
Prakash Limited didn’t pay any dividends during the last four years. Prakash 
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas 
paid-up share capital is ` 918 crore as per its latest audited financial statement 
and loss of ` 9.8 crore has not been deducted from such amount of free reserves. 
Since pressure from shareholders of the free float is mounting, management at 
Prakash Limited decided to pay dividend this year out of accumulated profit. 
Finally, the dividend was declared on 31
st 
August 2024. Some of the dividend 
remained unpaid as on 30
th
 September 2024, on account of operation of 
law; this was transferred to unpaid Dividend Account and a statement containing 
only the names of such beneficiaries was hosted on the website of the company 
on 9
th
 November 2024. 
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad 
and is not required to appoint an independent director under section 149(4). During 
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590 
147
crore and net profit was ` 45.8 crore. The profits and other information for the 
immediately preceding three years are given below: 
Particulars Year ended 
31.3.2024  
(` in crore) 
Year ended 
31.3.2023  
(` in crore) 
Year ended 
31.3.2022  
(` in crore) 
Net Profit for the year as per section 
198 (in accordance with applicable 
provisions) 
41.6 42.9 28 
The Board of Directors of Vasudha Private Limited is not clear whether they have 
to compulsorily form a CSR committee. In order to avoid adverse legal 
consequences, Vasudha Private Limited constituted a CSR committee comprising 
of two (2) non-executive directors and one (1) executive director who was 
appointed as chairperson of the committee. 
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, of 2 marks each) given 
herein under:  
1.  In case of Prakash Limited, regarding the unpaid dividend, which of the 
following statements is correct?  
(a)  Prakash Limited is guilty, of non-payment of dividend, because some of 
the dividends remain unpaid even after 30 days of declaration. 
(b)  Prakash Limited is guilty, because the list of beneficiaries of unpaid 
dividend is hosted on the website after 30 days from the date it falls in 
the category of unpaid dividend.  
(c)  Prakash Limited is guilty, because the list of beneficiaries does not 
contain the latest known address of beneficiaries and the amount 
unpaid. 
(d)  Prakash Limited is not guilty, because it has full-filled all the provisions 
of law pertaining to unpaid dividend.  
2.  During the current year, is Vasudha Private Limited required to constitute CSR 
committee under the provisions of the Companies Act, 2013? 
(a)  No, because it is a private company 
(b)  No, because it is an unlisted company and it has net-worth less than         
` 500 crore 
(c)  Yes, because despite being unlisted company its turnover is above ` 500 
crore 
(d)  Yes, because the company meets the threshold criteria having net profits 
exceeding ?5 crore in the immediately preceding financial year 
  
148
3.  What is the implication of the fact that Prakash Limited has not paid dividends 
for the last four years while having free reserves? 
(a)  The company is in violation of the Companies Act, 2013, for not declaring 
dividends. 
(b)  The shareholders can legally challenge the management for not utilizing 
free reserves for dividends. 
(c)  There is no legal obligation to declare dividends even if the company has 
free reserves. 
(d)  The company must now use all of its free reserves to pay dividends to 
satisfy shareholder demands. 
4.  Considering the legal provisions regarding the constitution of CSR committee 
and the one constituted by Vasudha Private Limited, state which of following 
the statements hold truth?  
(a)  Constitution of the committee is invalid because it doesn’t consist of an 
independent director. 
(b)  Constitution of the committee is invalid because its chairperson is an 
executive director. 
(c)  Constitution of the committee is valid because it depends purely upon 
the discretion of management. 
(d)  Constitution of the committee is valid because company is not required 
to appoint an independent director. 
5.  What is the minimum amount to be spent by Vasudha Private Limited on CSR 
activities for F.Y. 2024-25?  
(a)  ` 89.06 Lakh 
(b)  ` 78.20 Lakh 
(c)  ` 75.00 Lakh 
(d)  ` 73.80 Lakh 
Case Scenario 2  
Rahul and Meenakshi, two young entrepreneurs, founded “Educom Innovators LLP” 
under the Limited Liability Partnership Act, 2008, with a focus on providing digital 
education solutions. Rahul brought technical expertise, while Meenakshi managed the 
business operations. According to the LLP Agreement, both contributed equally and 
shared profits equally. After two years of growth, they decided to admit Anshul, an 
industry expert, as a partner to expand their reach. Anshul agreed to contribute 
additional capital and bring industry contacts. However, shortly after joining, Anshul 
discovered that certain key compliance filings, including Form 11 (Annual Return) and 
Form 8 (Statement of Accounts and Solvency), were pending. Concerned, Anshul 
wanted to understand his liability and insisted that the LLP immediately address the 
compliance issues. Meanwhile, Rahul proposed to amend the LLP Agreement to 
reflect Anshul’s new profit-sharing ratio and allocate specific decision-making powers 
to him. As they worked through these matters, they consulted a legal advisor to 
149
Page 4


MODEL TEST PAPER 6  
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 
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January 
1999 by Mr. Vicky Tripathi and his family members. Both the companies are 
engaged in the business of manufacturing machineries used in agricultural sector. 
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the 
daily operations of both the companies. Vasudha Private Limited is wholly owned 
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash 
Limited.  
Due to the poor economic conditions in the agriculture sector and shifting of the 
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited 
is dipping and its bottom line has been in the red for the last couple of years. The 
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore. 
Prakash Limited didn’t pay any dividends during the last four years. Prakash 
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas 
paid-up share capital is ` 918 crore as per its latest audited financial statement 
and loss of ` 9.8 crore has not been deducted from such amount of free reserves. 
Since pressure from shareholders of the free float is mounting, management at 
Prakash Limited decided to pay dividend this year out of accumulated profit. 
Finally, the dividend was declared on 31
st 
August 2024. Some of the dividend 
remained unpaid as on 30
th
 September 2024, on account of operation of 
law; this was transferred to unpaid Dividend Account and a statement containing 
only the names of such beneficiaries was hosted on the website of the company 
on 9
th
 November 2024. 
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad 
and is not required to appoint an independent director under section 149(4). During 
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590 
147
crore and net profit was ` 45.8 crore. The profits and other information for the 
immediately preceding three years are given below: 
Particulars Year ended 
31.3.2024  
(` in crore) 
Year ended 
31.3.2023  
(` in crore) 
Year ended 
31.3.2022  
(` in crore) 
Net Profit for the year as per section 
198 (in accordance with applicable 
provisions) 
41.6 42.9 28 
The Board of Directors of Vasudha Private Limited is not clear whether they have 
to compulsorily form a CSR committee. In order to avoid adverse legal 
consequences, Vasudha Private Limited constituted a CSR committee comprising 
of two (2) non-executive directors and one (1) executive director who was 
appointed as chairperson of the committee. 
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, of 2 marks each) given 
herein under:  
1.  In case of Prakash Limited, regarding the unpaid dividend, which of the 
following statements is correct?  
(a)  Prakash Limited is guilty, of non-payment of dividend, because some of 
the dividends remain unpaid even after 30 days of declaration. 
(b)  Prakash Limited is guilty, because the list of beneficiaries of unpaid 
dividend is hosted on the website after 30 days from the date it falls in 
the category of unpaid dividend.  
(c)  Prakash Limited is guilty, because the list of beneficiaries does not 
contain the latest known address of beneficiaries and the amount 
unpaid. 
(d)  Prakash Limited is not guilty, because it has full-filled all the provisions 
of law pertaining to unpaid dividend.  
2.  During the current year, is Vasudha Private Limited required to constitute CSR 
committee under the provisions of the Companies Act, 2013? 
(a)  No, because it is a private company 
(b)  No, because it is an unlisted company and it has net-worth less than         
` 500 crore 
(c)  Yes, because despite being unlisted company its turnover is above ` 500 
crore 
(d)  Yes, because the company meets the threshold criteria having net profits 
exceeding ?5 crore in the immediately preceding financial year 
  
148
3.  What is the implication of the fact that Prakash Limited has not paid dividends 
for the last four years while having free reserves? 
(a)  The company is in violation of the Companies Act, 2013, for not declaring 
dividends. 
(b)  The shareholders can legally challenge the management for not utilizing 
free reserves for dividends. 
(c)  There is no legal obligation to declare dividends even if the company has 
free reserves. 
(d)  The company must now use all of its free reserves to pay dividends to 
satisfy shareholder demands. 
4.  Considering the legal provisions regarding the constitution of CSR committee 
and the one constituted by Vasudha Private Limited, state which of following 
the statements hold truth?  
(a)  Constitution of the committee is invalid because it doesn’t consist of an 
independent director. 
(b)  Constitution of the committee is invalid because its chairperson is an 
executive director. 
(c)  Constitution of the committee is valid because it depends purely upon 
the discretion of management. 
(d)  Constitution of the committee is valid because company is not required 
to appoint an independent director. 
5.  What is the minimum amount to be spent by Vasudha Private Limited on CSR 
activities for F.Y. 2024-25?  
(a)  ` 89.06 Lakh 
(b)  ` 78.20 Lakh 
(c)  ` 75.00 Lakh 
(d)  ` 73.80 Lakh 
Case Scenario 2  
Rahul and Meenakshi, two young entrepreneurs, founded “Educom Innovators LLP” 
under the Limited Liability Partnership Act, 2008, with a focus on providing digital 
education solutions. Rahul brought technical expertise, while Meenakshi managed the 
business operations. According to the LLP Agreement, both contributed equally and 
shared profits equally. After two years of growth, they decided to admit Anshul, an 
industry expert, as a partner to expand their reach. Anshul agreed to contribute 
additional capital and bring industry contacts. However, shortly after joining, Anshul 
discovered that certain key compliance filings, including Form 11 (Annual Return) and 
Form 8 (Statement of Accounts and Solvency), were pending. Concerned, Anshul 
wanted to understand his liability and insisted that the LLP immediately address the 
compliance issues. Meanwhile, Rahul proposed to amend the LLP Agreement to 
reflect Anshul’s new profit-sharing ratio and allocate specific decision-making powers 
to him. As they worked through these matters, they consulted a legal advisor to 
149
understand how the Limited Liability Partnership Act, 2008, impacted their 
responsibilities, liabilities, and compliance obligations. 
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 Multiple Choice Questions (MCQs 6-8, of 2 
marks each) given herein under:  
6.  When Anshul joined Educom Innovators LLP, he discovered that key 
compliance filings, including the Annual Return and Statement of Accounts 
and Solvency, were pending. What is Anshul’s liability as a newly admitted 
partner concerning these past compliance lapses? 
(a) Anshul has no liability for past compliance lapses since he was not a 
partner when they occurred. 
(b) Anshul shares equal liability for past compliance lapses because he is 
now a partner in the LLP. 
(c) Anshul is only liable if the LLP Agreement specifically assigns 
responsibility to him for compliance. 
(d) Anshul's liability for past compliance is limited to his capital contribution 
in the LLP. 
7.  In light of Anshul’s concern about the pending compliance filings, which of the 
following best describes the responsibilities of the partners in Educom 
Innovators LLP regarding compliance with the LLP Act, 2008? 
(a) Only the designated partners are responsible for ensuring compliance 
with filing obligations under the LLP Act. 
(b) All partners, including new partners like Anshul, are equally responsible 
for compliance, regardless of the LLP Agreement. 
(c) Compliance responsibilities can only be assigned to one partner, who 
will bear full accountability. 
(d) The legal advisor is responsible for handling compliance, and the 
partners have no liability once they hire legal counsel. 
8. Suppose in the given scenario, Educom Innovators LLP fails to file the 
Statement of Account and Solvency or Annual Return for any five consecutive 
financial years, which of the following could occur? 
(a)  Educom Innovators LLP may be wound up the Tribunal 
(b)  Takeover of Educom Innovators LLP by the persons appointed by the 
Registrar of Companies 
(c)  Revocation of all partner rights until filings are complete 
(d)  The losses for these 5 consecutive years shall be shared equally by all 
the partners irrespective of the profit sharing ratio as decided in the LLP 
agreement. 
  
150
Page 5


MODEL TEST PAPER 6  
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 
Prakash Limited and Vasudha Private Limited (VPL) were incorporated in January 
1999 by Mr. Vicky Tripathi and his family members. Both the companies are 
engaged in the business of manufacturing machineries used in agricultural sector. 
Mr. Vicky Tripathi and his younger brother Vinay Tripathi actively participate in the 
daily operations of both the companies. Vasudha Private Limited is wholly owned 
by Tripathi family, while Tripathi family has a majority stake of 51% in Prakash 
Limited.  
Due to the poor economic conditions in the agriculture sector and shifting of the 
farmers’ focus to more advanced farming techniques, the sales of Prakash Limited 
is dipping and its bottom line has been in the red for the last couple of years. The 
unabsorbed loss of Prakash Limited for the current financial year is ` 9.8 crore. 
Prakash Limited didn’t pay any dividends during the last four years. Prakash 
Limited has accumulated profit in the form of free reserves of ` 180 crore whereas 
paid-up share capital is ` 918 crore as per its latest audited financial statement 
and loss of ` 9.8 crore has not been deducted from such amount of free reserves. 
Since pressure from shareholders of the free float is mounting, management at 
Prakash Limited decided to pay dividend this year out of accumulated profit. 
Finally, the dividend was declared on 31
st 
August 2024. Some of the dividend 
remained unpaid as on 30
th
 September 2024, on account of operation of 
law; this was transferred to unpaid Dividend Account and a statement containing 
only the names of such beneficiaries was hosted on the website of the company 
on 9
th
 November 2024. 
Vasudha Private Limited is a mid-sized unlisted entity, with few branches abroad 
and is not required to appoint an independent director under section 149(4). During 
the immediately preceding F.Y., its net worth was ` 280 crore, turnover was ` 590 
147
crore and net profit was ` 45.8 crore. The profits and other information for the 
immediately preceding three years are given below: 
Particulars Year ended 
31.3.2024  
(` in crore) 
Year ended 
31.3.2023  
(` in crore) 
Year ended 
31.3.2022  
(` in crore) 
Net Profit for the year as per section 
198 (in accordance with applicable 
provisions) 
41.6 42.9 28 
The Board of Directors of Vasudha Private Limited is not clear whether they have 
to compulsorily form a CSR committee. In order to avoid adverse legal 
consequences, Vasudha Private Limited constituted a CSR committee comprising 
of two (2) non-executive directors and one (1) executive director who was 
appointed as chairperson of the committee. 
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, of 2 marks each) given 
herein under:  
1.  In case of Prakash Limited, regarding the unpaid dividend, which of the 
following statements is correct?  
(a)  Prakash Limited is guilty, of non-payment of dividend, because some of 
the dividends remain unpaid even after 30 days of declaration. 
(b)  Prakash Limited is guilty, because the list of beneficiaries of unpaid 
dividend is hosted on the website after 30 days from the date it falls in 
the category of unpaid dividend.  
(c)  Prakash Limited is guilty, because the list of beneficiaries does not 
contain the latest known address of beneficiaries and the amount 
unpaid. 
(d)  Prakash Limited is not guilty, because it has full-filled all the provisions 
of law pertaining to unpaid dividend.  
2.  During the current year, is Vasudha Private Limited required to constitute CSR 
committee under the provisions of the Companies Act, 2013? 
(a)  No, because it is a private company 
(b)  No, because it is an unlisted company and it has net-worth less than         
` 500 crore 
(c)  Yes, because despite being unlisted company its turnover is above ` 500 
crore 
(d)  Yes, because the company meets the threshold criteria having net profits 
exceeding ?5 crore in the immediately preceding financial year 
  
148
3.  What is the implication of the fact that Prakash Limited has not paid dividends 
for the last four years while having free reserves? 
(a)  The company is in violation of the Companies Act, 2013, for not declaring 
dividends. 
(b)  The shareholders can legally challenge the management for not utilizing 
free reserves for dividends. 
(c)  There is no legal obligation to declare dividends even if the company has 
free reserves. 
(d)  The company must now use all of its free reserves to pay dividends to 
satisfy shareholder demands. 
4.  Considering the legal provisions regarding the constitution of CSR committee 
and the one constituted by Vasudha Private Limited, state which of following 
the statements hold truth?  
(a)  Constitution of the committee is invalid because it doesn’t consist of an 
independent director. 
(b)  Constitution of the committee is invalid because its chairperson is an 
executive director. 
(c)  Constitution of the committee is valid because it depends purely upon 
the discretion of management. 
(d)  Constitution of the committee is valid because company is not required 
to appoint an independent director. 
5.  What is the minimum amount to be spent by Vasudha Private Limited on CSR 
activities for F.Y. 2024-25?  
(a)  ` 89.06 Lakh 
(b)  ` 78.20 Lakh 
(c)  ` 75.00 Lakh 
(d)  ` 73.80 Lakh 
Case Scenario 2  
Rahul and Meenakshi, two young entrepreneurs, founded “Educom Innovators LLP” 
under the Limited Liability Partnership Act, 2008, with a focus on providing digital 
education solutions. Rahul brought technical expertise, while Meenakshi managed the 
business operations. According to the LLP Agreement, both contributed equally and 
shared profits equally. After two years of growth, they decided to admit Anshul, an 
industry expert, as a partner to expand their reach. Anshul agreed to contribute 
additional capital and bring industry contacts. However, shortly after joining, Anshul 
discovered that certain key compliance filings, including Form 11 (Annual Return) and 
Form 8 (Statement of Accounts and Solvency), were pending. Concerned, Anshul 
wanted to understand his liability and insisted that the LLP immediately address the 
compliance issues. Meanwhile, Rahul proposed to amend the LLP Agreement to 
reflect Anshul’s new profit-sharing ratio and allocate specific decision-making powers 
to him. As they worked through these matters, they consulted a legal advisor to 
149
understand how the Limited Liability Partnership Act, 2008, impacted their 
responsibilities, liabilities, and compliance obligations. 
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 Multiple Choice Questions (MCQs 6-8, of 2 
marks each) given herein under:  
6.  When Anshul joined Educom Innovators LLP, he discovered that key 
compliance filings, including the Annual Return and Statement of Accounts 
and Solvency, were pending. What is Anshul’s liability as a newly admitted 
partner concerning these past compliance lapses? 
(a) Anshul has no liability for past compliance lapses since he was not a 
partner when they occurred. 
(b) Anshul shares equal liability for past compliance lapses because he is 
now a partner in the LLP. 
(c) Anshul is only liable if the LLP Agreement specifically assigns 
responsibility to him for compliance. 
(d) Anshul's liability for past compliance is limited to his capital contribution 
in the LLP. 
7.  In light of Anshul’s concern about the pending compliance filings, which of the 
following best describes the responsibilities of the partners in Educom 
Innovators LLP regarding compliance with the LLP Act, 2008? 
(a) Only the designated partners are responsible for ensuring compliance 
with filing obligations under the LLP Act. 
(b) All partners, including new partners like Anshul, are equally responsible 
for compliance, regardless of the LLP Agreement. 
(c) Compliance responsibilities can only be assigned to one partner, who 
will bear full accountability. 
(d) The legal advisor is responsible for handling compliance, and the 
partners have no liability once they hire legal counsel. 
8. Suppose in the given scenario, Educom Innovators LLP fails to file the 
Statement of Account and Solvency or Annual Return for any five consecutive 
financial years, which of the following could occur? 
(a)  Educom Innovators LLP may be wound up the Tribunal 
(b)  Takeover of Educom Innovators LLP by the persons appointed by the 
Registrar of Companies 
(c)  Revocation of all partner rights until filings are complete 
(d)  The losses for these 5 consecutive years shall be shared equally by all 
the partners irrespective of the profit sharing ratio as decided in the LLP 
agreement. 
  
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Case Scenario 3  
In 2024, New Limited, a company specializing in international trade, needed to send 
an important notice to one of its clients, Mr. A, regarding a contractual amendment. 
According to the company’s internal regulations and the contract terms, the notice 
had to be served by post. 
On April 15, 2024, the company's legal department prepared the notice and 
addressed it to Mr. A at his registered address. The notice was properly addressed, 
prepaid, and sent via registered post with acknowledgment due to ensure the 
highest level of confirmation for delivery. 
A few days later, on April 20, 2024, the notice was returned with a stamp indicating 
that it was "not claimed" by Mr. A. The legal department recorded the return of the 
notice and noted the endorsement. 
The company’s legal advisor referred to past case laws for similar scenarios to 
ensure that the notice was considered legally served under section 27 of the 
General Clauses Act, 1897. They reviewed the following precedents: 
United Commercial Bank v. Bhim Sain Makhija: It was noted that merely sending a 
notice by registered post without the acknowledgment due did not provide sufficient 
legal protection for proving service. 
Jagdish Singh v. Natthu Singh: This case demonstrated that if a notice sent by 
registered post was returned with a refusal endorsement, it was considered served. 
Smt. Vandana Gulati v. Gurmeet Singh alias Mangal Singh: It was established that 
if a notice sent by registered post to a proper address was returned with an 
endorsement like "not claimed", it was deemed served unless proven otherwise. 
On the basis of above facts and by applying applicable provisions of the General 
Clauses Act, 1897 and the applicable Rules therein, choose the correct answer 
(one out of four) of the following Multiple Choice Questions (MCQs 9-11 of 2 marks 
each) given herein under:  
9.  According to section 27 of the General Clauses Act, 1897, what three 
conditions must be fulfilled for a service by post to be deemed effective? 
(a)  Properly addressed, Pre-paid, and Posting by ordinary post 
(b)  Properly addressed, Pre-paid, and Posting by registered post 
(c) Properly addressed, Pre-paid, and Sending by courier 
(d)  Properly addressed, Pre-paid, and Hand delivery 
10.  In the case of United Commercial Bank v. Bhim Sain Makhija, why was the 
presumption of service under registered post found to be insufficient? 
(a)  Because the notice was sent by ordinary post 
(b)  Because the notice was sent by registered post but not with 
acknowledgment due 
(c)  Because the address was incorrect 
(d)  Because the recipient did not respond 
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