ICSI - Intermediate Examination Old Syllabus

Company Law & Practice- Paper I

December  2003

Answer 6 questions including question No.1, which is compulsory.

Q 1. Comment on the following statements: (i) All companies are required to issue further shares to the existing equity shareholders. (ii) The property of the company is not the property of the shareholders. (iii) A company is no longer prohibited from issuing shares with differential rights. (iv) Application for shares in fictitious name is prohibited [5 x 4 = 20 marks].

Q 2. (a) Article 10 of the Articles of Association of Rosy Ltd. reads as follows: (i) No member shall hold shares exceeding one-tenth of the total number or value of shares issued by the company: and (ii) If any shareholder held shares above the limit prescribed, the excess of shares held shall not be counted for the purpose of voting. Can a shareholder holding shares in excess of the limit prescribed by the articles of association legitimately claim voting rights for his entire holding? Discuss. (b) Under what circumstances, a company shall not pay or be liable to pay any compensation to its sole selling agent for the loss of office? (c) What is the ceiling upto which a company can pay to its sole selling agent for loss of office? [6+6+4 = 16 marks]

Q 3. Distinguish between any four of the following: (i) ‘Employees stock option scheme’ and ‘employees stock purchase scheme’. (ii) ‘Transfer of shares’ and ‘transmission of shares’ (iii) ‘Reserve capital’ and ‘capital reserve’. (iv) ‘Member’ and ‘shareholder’. (v) ‘Issued capital’ and ‘paid-up capital’ [4 x 4 = 16 marks]

Q 4. (a) Who can issue a ‘shelf prospectus’? Explain the term ‘information memorandum’ in relation to a shelf prospectus. (b) What are the requirements under the listing agreement relating to publication of un-audited quarterly results? (c) Explain the provisions relating to satisfaction of charges registered with the Registrar of Companies. [6+6+4 = 16 marks]

Q 5. (a) Global Overseas Ltd., in addition to its Indian operations, have overseas operations in United Arab Emirates (UAE). The managing director informs you that the business of the company entails carrying out multiplicity of transactions and execution of documents on behalf of the company by the principal officer designated in Dubai (UAE). The managing director seeks to know whether the official seal of the company can be used in UAE and the procedure to be followed for this purpose. Advise the managing director of Global Overseas Ltd. (b) Cipher Pvt. Ltd. informs you that the equity shares of the company are held by the following: (i) Foreign holding company holding shares through its two nominees. (ii) 2 Directors holding shares in their individual capacity. (iii) 10 Present employees. (iv) 10 Past employees who continue to hold shares in the company. (v) 25 Shareholders holding shares in their sole name. (vi) 10 Shareholders holding shares jointly with 10 other shareholders. The company seeks to raise further capital and the members have resolved that the same may be raised privately. The managing director of Cipher Pvt. Ltd. seeks to know what is the maximum number of new members that can be admitted to the company, while continuing to remain as a private company. Advise. (c) Investrix Ltd. has surplus funds for investment. The net worth of the company is Rs. 500 lakh and its reserves and surplus is four times the paid up capital as per the latest audited balance sheet. The finance director seeks answers to the following questions: (i) What is the maximum limit up to which Investrix Ltd. can make investment in equity shares of other companies, without being required to approach the shareholders for their approval, given that : - Investrix Ltd. has already invested upto Rs. 100 lakh in equity shares of other companies and Rs. 50 lakh in its wholly owned subsidiary Investrokes Ltd.; and – Lent Rs. 70 lakh to its subsidiary Investron Ltd. in which it holds 64% of the paid up equity share capital and the company does not have institutional dues? (ii) What are the formalities required to be complied with for implementing the proposal for investment upto the maximum limit as per (i) above? [5+5+(4+2) = 6 = 16 marks]

Q 6. (a) Multi-four Ltd., a closely held public limited company, seeks to diversify into the business of export of software and manufacture of hi-tech surgical instruments. Though the memorandum of association of the company does not cover the business of export of software and manufacture of hi-tech surgical instruments, these are covered under the head ‘other objects’ of the memorandum of association. Advise Multi-four Ltd. about the procedural steps to be taken under the Companies Act, 1956 before commencing these business. (b) Rahul and Sanjay are the only two directors of Bibrant Pvt. Ltd. Rahul, designated as chief executive, has been given substantial powers of management by the Board of Directors and Sanjay is on the Board only as a financial investor. Sanjay seeks to know from you about the business decisions for which a Board meeting must be convened. Prepare a brief note for the perusal of Sanjay. (c) Varun holds debentures of Downturn Ltd., which has continuously defaulted in payment of interest due on the debentures. The debentures held by Varun are not secured. Advise Varun about the remedies available to him against Downturn Ltd. [8+5+3 = 16 marks]

Q 7. (a) State the benefits of ‘depository system’. (b) What are the steps involved in dematerialisation of securities? (c) Can the investor pledge his dematerialized securities? If so, how. [4+7+5 = 16 marks]

Q 8. You are a company secretary of a listed company. Make a note for the consideration of the Board of directors explaining the provisions of section 77A relating to power of a company to purchase its own shares [16 marks]

ICSI - Intermediate Examination Old Syllabus

Company Law & Practice- Paper II

December  2003

Answer 6 questions including question No.1, which is compulsory.

Q 1. Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required to : (i) change the name of the company. (ii) recommend a final dividend. (iii) appoint an additional director. (iv) sell an undertaking by a public company. (v) approve contracts in which a director is interested [4 x 5 = 20 marks].

Q 2. (a) Explain the law and procedure relating to removal of directors by the shareholders. (b) Ram sent his resignation as director on 1^st September, 2001. The resignation letter stated that he was resigning with immediate effect. The company received his resignation letter on 3^rd September, 2001. In a Board meeting held on 15^th September, 2001, the Board of directors declined to accept the resignation. Form No.32 was not filed with the Registrar of Companies. In September, 2002, the company and its directors (including Ram) were prosecuted for non-payment of dividend declared in the annual general meeting held on 27^th July, 2001. will the prosecution of Ram sustain? (c) Amar, a director of the company, came from Mumbai to Delhi for attending a Board meeting. However, the meeting was adjourned for want of quorum. Amar claimed the sitting fees and actual expenses incurred by him for attending the meeting which was refused on the ground that the meeting has been adjourned. Amar seeks your advice. Advise him. [6+6+6 = 16 marks]

Q 3. (a) Explain the provisions relating to recording of minutes of the meetings of the Board of directors and shareholders. (b) Can a company keep its minutes in loose leaf binder? If so, what rules have to be complied with? (c) List out  the matters which are mandatorily required to be included in the minutes of the Board meeting. (d) What are the powers of the chairman in respect of recording of minutes in the minutes book? [8+3+3+2 = 16 marks]

Q 4. (a) Define the term ‘secretary’ under the Companies Act, 1956. What are the statutory duties of a company secretary? (b) What is a ‘compliance certificate’ and what is its scope? State the penalty for not filing the compliance certificate with the Registrar of Companies. Discuss the professional responsibility in connection with issue of a compliance certificate. (c) Gopal, a practising company secretary, had signed the annual return of Fortune Ltd., listed on the Bombay Stock Exchange, without obtaining ‘no objection certificate’ from Shyam who had signed the annual return of the company for the previous year. Has Goyal committed a breach of code of conduct? [6+6+4 = 16 marks]

Q 5. Comment on the following statements: (i) It is necessary for the auditor of a subsidiary company to send the copy of its draft final accounts to the auditor of its holding company. (ii) Report on corporate governance should form part of annual report of all listed companies. (iii) A company can have both a ‘manager’ and a ‘managing director’. (iv) A casual vacancy caused by the resignation of the auditor can be filled by the Board of directors 4 x 4 = 16 marks].

Q 6. (a) Draft the notice of an annual general meeting of a listed public company including therein at least two of special business. You may assume data for this purpose. (b) How is chairman of a general meeting appointed? Can the chairman of a general meeting withdraw any resolution at the meeting, which was already proposed through the notice? [10+6 = 16 marks]

Q 7. State the law relating to preparation, approval, authentication, circulation and adoption of balance sheet and profit and loss account of a company under the Companies Act, 1956. What happens when these provisions are not complied with? [16 marks]

Q 8. (a) What are the powers of the Company Law Board to prevent oppression or mismanagement of a company? (b) Name any six statutory registers which are open for inspection by shareholders. (c) What amounts are required to be transferred to the investor protection and education fund? [10+3+3 = 16 marks]

COMPANY SECRETARY - Intermediate Examination

Company Law & Practice- Paper I

June 2003

Answer 6 questions including question No.1, which is compulsory.

Q 1.Comment on the following statements: (i) A private company can accept deposits only from its members, directors and their relatives. (ii) The maximum rates of brokerage payable on deposits vary in accordance with the tenure of the deposits (iii) Once a duplicate share certificate is issued, the original becomes extinct (iv) Bonus shares cannot be issued out of revaluation reserve. [5 marks each].

Q 2 (a) What are the various particulars which must be contained in an advertisement inviting deposits from public? (b) A transfer deed was presented in which the amount of stated consideration was lower than the prevailing market value of the shares of Freewheel Ltd., a listed company. The transfer deed was otherwise in order and the stamp duty was paid in accordance with the prevailing market value. As a company secretary of Freewheel Ltd., advise whether the company should register the transfer. [12+4 = 16 marks]

Q 3 (a) Specify the documents to be filed with the Registrar in relation to buy-back of securities and the time limit within which they are to be filed (b) What are the circumstances under which the ‘corporate veil’ have been disregarded by the courts? Explain with reference to relevant case laws. [6+10 = 16 marks]

Q 4. (a) Explain the procedure prescribed by the Department of Company Affairs under the Companies Act, 1956 for removal of defunct companies from the register of companies (b) Gotall Ltd., a listed company, has borrowed in excess of its paid up capital and free reserves without obtaining the approval of the members for such borrowings. Godown Ltd. has lent substantial sums of money to Gotall Ltd. Advise Godown Ltd. regarding the remedies available to it in respect of the amount lent to Gotall Ltd. (c) What is the liability of a member, past or present, after the reduction of share capital is confirmed by the court? [6+6+4 = 16 marks]

Q 5. (a) Rediant Pvt. Ltd. had 5,00,000 equity shares of Rs. 10 each fully paid as on 31^st March, 2002. Two shareholders holding 1,50,000 equity shares each, sold their shares to Sri Lakshmi Ltd. at Rs. 15 per share and the Board of directors approved the same on 20^th April, 2002. Discuss the implication of the said share transfer. (b) State any eight exemptions or privileges enjoyed by the Section 25 companies. [12+4 = 16 marks]

Q 6. (a) A charge in favour of a public financial institution created by a public company to secure a sum of Rs. 200 crore was not created within the statutory period and the Company Law Board on an application made by the company did not grant the extension of time. Is it possible to revive the said charge? (b) “A company’s power to alter articles of association is subject to certain limitation.” Explain. (c) Draft a resolution along with an explanatory statement for preferential offer of shares to a selected group of persons. [5+5+6 = 16 marks]

Q 7 (a) Almighty Ltd. wishes to make a loan of Rs. 10 crore to Aastha Ltd. As a company secretary of Almighty Ltd., state the procedure to be followed in this regard under the Companies Act, 1956. (b) Plenty Ltd. wants to make a loan to Meagre Ltd. at zero per cent interest rate. Can it do so? (c) What are the consequences of non-maintenance of register of loans, etc., under section 372A of the Companies Act, 1956? [10+3+3 = 16 marks]

Q 8. (a) As on 31^st March, 2002, Dowell Ltd. has an authorised capital of Rs. 50,00,000 and its paid up share capital is Rs. 30,00,000. On 1^st April 2002, the Board of directors of the company allotted 50,000 shares of Rs. 10 each to Sunder who had given an unsecured loan of Rs. 5,00,000 which the company was not in a position to repay. Mrs. Aisha, a shareholder, alleges that further allotment of shares has affected her voting power. Discuss. (b) What are ‘sweat equity shares’? (c) State the procedure for rematerialisation of shares. [7+3+6 = 16 marks].

COMPANY LAW AND PRACTICE – II

June 2003

Answer 6 questions, including Q No. 1 which is compulsory.

Q 1. Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required to : (i) execute a contract requiring affixation of the common seal. (ii) make calls on shares. (iii) appoint the first auditors. (iv) issue duplicate share certificate. (v) appoint a company secretary. [4 x 5 = 20 marks]

Q 2. The following balance sheet as at 31^st March, 2002 of ABC Industries Ltd. was considered and adopted by the shareholders in the annual general meeting held on 30^th September, 2002 :

The company has earned a net profit of Rs. 15 lakh for the year ended on 31^st March 2002. Reserves and surplus include Rs. 5 lakh created out of revaluation of assets.

The shareholders have declared a dividend @ 15% on equity shares for the year ended on 31^st March 2002. Based on the above facts and figures, explain the legal position and advise on the following matters: (i) Amount of deposit a company can accept from the public (ii) The minimum amount that must have been transferred to reserve out of the current year’s profit (iii) The amount that the Board of directors can borrow as term loan without obtaining the consent of the shareholders (iv) Documents to be filed with the Registrar of Companies in respect of above, indicating the latest date by which the same are to be filed. [4 x 4 = 16 marks]

Q 3. (a) What are the powers of the Company Law Board to prevent the change in Board of directors likely to affect the company prejudicially? (b) Explain the powers of the central government for the appointment of inspector for investigation and reporting on membership of a company. [8+8 = 16 marks]

Q 4. (a) What are the duties of a director towards the company for making disclosure about the change in his other directorships? (b) The director of a listed company has purchased 500 equity shares of the company – Advise him about his duty towards the company (c) What is the maximum period for which a managing director could hold his office? (d) State whether a relative of an auditor of a company can hold shares in that company. [4 x 4 = 16 marks]

Q 5. Explain the legal position in the following cases : (i) A company is having a paid up capital of Rs. 45 lakh. The managing director of the company says that there is no need for the company to obtain the compliance certificate under the provisions of section 383A(1) of the Companies Act, 1956 since it is having a whole-time company secretary. (ii) A Company’s paid up capital is Rs. 10 crore and it is having a manager under section 269 of the Companies Act, 1956. In view of the increased activities of the company, the Board of Directors would like to appoint one more manager under the aforesaid provisions of the Companies Act, 1956. (iii) Aditya was appointed as a whole-time director of Goldmine Ltd. for a period of five years during the year 1998. His tenure of appointment would expire on 30^th July, 2003. As per the audited accounts for the year ended 31^st March, 2003, the company has incurred a loss of Rs. 120 lakh. The Board of Directors proposes to re-appoint him for a further period of five years at a remuneration of Rs. 4 lakh per month. (iv) Atul is a non-resident Indian shareholder and he has issued an irrevocable power of attorney in favour of Bersa for attending the annual general meeting of Skeptic Ltd. On the scheduled day of annual general meeting, Bersa is about to enter the meeting hall, when Atul also arrives. Bersa argues that he is entitled to attend the annual general meeting of Skeptic Ltd., since he is having the irrevocable power of attorney in his favour. [4 x 4 = 16 marks]

Q 6. (a) Enumerate the provisions relating to disqualifications of directors. (b) Anand is a director in Strong Ltd. He is also a director in Weak Ltd., which has defaulted in redemption of debentures for more than one year as on 31^st March, 2002. The auditor of Strong Ltd. qualifies in his report that Anand is disqualified under section 274(1)(g) of the Companies Act, 1956. Anand is not retiring by rotation during the year 2002. A shareholder who attends the annual general meeting of Strong Ltd. questions how can Anand, a disqualified director, continue as a director in the company? Comment. (c) Enumerate the matters which can be decided by the Board of directors only by passing a resolution at a Board meeting by an unanimous vote. [8+4+4 = 16 marks]

Q 7. (a) How is the chairman of a general meeting appointed? (b) Is the chairman of an annual general meeting of a company bound to reply all the questions raised by the shareholders relating to accounts or any other matter included in the agenda of the meeting? (c) Describe the contents of the register of contracts and register of directors. (d) When can one person constitute ‘quorum’ at a meeting? [4+4+6+2 = 16 marks]

Q 8. Write short notes on the following: (i) Director’s responsibility statement (ii) Political contributions by companies (iii) Minutes of first Board meeting (iv) Rule in Foss vs. Harbottle. [4 x 4 = 16 marks].

COMPANY SECRETARY - Intermediate Examination

Company Law & Practice- Paper I

December 2002

Answer 6 questions including question No.1, which is compulsory.

Q. 1 Comment on the following statements: (i) Every private limited company must compulsory register its articles of association with the Registrar of Companies, whereas it is optional for a public limited company. (ii) The certificate of incorporation issued by the Registrar of Companies does not make an unlawful object as lawful. (iii) The debenture trustees protect the interests of the debenture-holders. (iv) The Companies Act, 1956 imposes conditions for regulating the utilization of the amount of premium collected on issue of shares. [5 marks each = 20 marks]

Q. 2 (a) From the register of fixed deposits maintained by Uprise Ltd., the following information is extracted in regard to deposits outstanding as at 31st March, 2002:

As at 31st March, 2002, Uprise Ltd. has fixed deposits with a scheduled bank of Rs. 31 lakh out of which Rs. 25 lakh is marked under lien as margin money against letter of credit issued by the said bank. The company has a balance of Rs. 0.75 lakh in its current account with the said bank. Further, the company has invested Rs. 5.50 lakh in securities issued by the central government and Rs. 1.50 lakh in the units issued by the Unit Trust of India. You are required to ascertain whether the company has to invest/deposit further amounts to comply with the requirements regarding maintenance of liquid assets under the Companies (Acceptance of Deposits) Rules, 1975 and if so, the quantum of such further investments/deposit. (b) The articles of association of a company provides that before transferring shares to a stranger they should be offered on certain terms to existing shareholders. Examine the validity of the provision. (c) What are the matters in respect of which preference shareholder can ordinarily exercise voting rights? What are the circumstances under which voting rights can be exercised in respect of every resolution placed at a meeting by – (i) the cumulative preference shareholders; and (ii) the non-cumulative preference shareholders? [6+4+6 = 16 marks]

Q. 3 (a) A company has received 10,000 shares registered in the name of Jolly for transfer to Abhinay. Jolly is a debtor of the company and has defaulted in settling the company’s claim. Therefore, the company wants to refuse the transfer of shares. Can it do so? Advise. (b) Your company, which is listed with several stock exchanges, proposes to buy-back 18% of its equity shares from the open market. Prepare a note for consideration of the Board of Directors giving two alternate methods of buying through stock exchange and through book building process. [6+10 = 16 marks]

Q. 4 (a) Whether a bank, in its capacity as a secured creditor, can file Form Nos. 8 and 13? Explain the consequences of non-registration of a charge. (b) “The provisions of sections 58AA and 58AAA introduced by the Companies (Amendment) Act, 2000 enhance the protection afforded to small depositors.” Discuss. [8+8 = 16 marks]

Q. 5 (a) Prepare a note for consideration of the Board of directors as regards requirements in Schedule-II of the Companies Act, 1956 on matters of auditors’ certification. (b) The articles of association of ABC Ltd. provide that on the death of one or more of joint-holder(s), the shares in question will be transmitted to the surviving joint-holder(s). X and Y are jointly holding 1,000 equity shares in ABC Ltd. On the death of X, in accordance with the articles, the shares are transmitted in the name of Y. Z, being the legal heir of the deceased X, has made a claim for the transmission of 1,000 equity shares in his favour. Advise whether the claim of Z will succeed. [12+4 = 16 marks]

Q. 6 (a) Define ‘government company’. List out any five provisions which are applicable to a government company with modifications. (b) Your company seeks to get its shares listed at a recognised stock exchange. Prepare a note highlighting advantages and obligations of listing of shares. [6+10 = 16 marks]

Q. 7 (a) In 1997, Downturn Ltd. issued 2,00,000, 6% redeemable preference shares of Rs. 100 each at par, redeemable on or before 30th June, 2002 at par. The company was unable to pay dividends for the financial year ended 31st March, 2001. The managing director of the company now contends that it will not be able to redeem the said preference shares before 31st December, 2002 as also to pay the dividend in arrears. As a company secretary, advise the managing director of Downturn Ltd. on the suggested future course of action along with brief outline of the procedure to be followed for this purpose. (b) State the requirements of the listing agreement relating to corporate governance with regard to – (i) constitution and composition of the audit committee. (ii) minimum number of meetings of the audit committee. (iii) powers and role of the audit committee. [6+3+1+6 = 16 marks]

Q. 8 (a) Explain the law relating to ‘return of allotment’. What is the time limit for filing the return of allotment with the Registrar of Companies? (b) State whether the return of allotment is required to be filed with the Registrar of Companies in the following cases: - re-issue of forfeited shares; - issue of debentures; - conversion of debentures into equity shares; and – issue of equity shares for consideration other than cash. (c) Explain the meaning of the term ‘collective investment scheme’ as per the Securities and Exchange Board of India Act, 1992. Specify the schemes which are not collective investment schemes within the meaning of the said Act. [4+2+10 = 16 marks]

COMPANY SECRETARY - Intermediate Examination

Company Law & Practice- Paper II

December 2002

Answer 6 questions including question No.1, which is compulsory.

Q. 1 Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required to : (i) keep registers and returns in a place other than the registered office of the company. (ii) issue 1,00,000 equity shares of Rs. 10 each to ABC Corporation, Missouri, USA, a foreign collaborator. (iii) approve payment of remuneration to non-executive directors. (iv) authorise borrowing of Rs. 60 crore which is in excess of the aggregate of paid-up capital and free reserves of the company. (v) defend a case brought against the company under section 397 of the Companies Act, 1956. [4 marks each = 20 marks]

Q. 2 (a) What amounts are required to be credited to the investor education and protection fund? (b) What are the provisions relating to payment of sitting fees to the directors for attending meetings of the Board of directors and the committees constituted by the Board of Directors. (c) X is holding 50 shares in a company. For the general meeting to be held on 10th January, 2003, he has signed one proxy form appointing Y as his proxy. This form is executed on 25 Dec 2002. X signed another proxy form on 30-12-2002 appointing Z as his proxy. These proxy forms were filed simultaneously with the company. Who should be allowed to vote at the meeting – Y or Z ? Would your answer be different if the proxy form appointing Z is filed first with the company? [4+6+6 = 16 marks]

Q. 3 (a) Explain the changing role of a company secretary consequent to the judicial pronouncements and recent amendments in various laws and regulations. (b) What are the compliances/violations required to be reported in secretarial compliance certificate as regards amendments in memorandum and articles of association? (c) List out four circumstances when a company secretary in practice be held guilty of professional misconduct. [8+6+2 = 16 marks]

Q. 4 Explain the legal position and suggested action for any four of the following: (i) A retiring director of your company, whose reappointment forms part of notice of the annual general meeting, expresses his willingness not to be re-appointed as director, after the dispatch of notice of the annual general meeting to members and auditors. (ii) A listed company wants to declare interim dividend. (iii) A company is ready with printed annual report for dispatch to all shareholders and there arises a need to hold an extra-ordinary general meeting. The company wants to dispatch notice of the annual general meeting and notice of extra-ordinary general meeting simultaneously in the same envelope. (iv) Board of directors of a public limited company wants to commence a business included under objects incidental or ancillary to the attainment of main objectives. (v) A director of your company seeks your expert advise on a situation which he came across while attending a meeting of another company. (vi) A shareholder of the company, who is quite old, insists on allowing his accompanying person also to be allowed in the meeting hall. [4 marks each].

Q. 5 (a) State the disqualifications of directors requiring a qualification in the auditor’s report. (b) What declarations are required to be included in the ‘directors responsibility statement’? (c) What information can be called for by the Registrar of Companies from a company?  [4+4+8 = 16 marks]

Q. 6 (a) Explain ‘report on corporate governance’ to be included in the annual report of a company. (b) X and Y hold 5% and 7% paid-up share capital of company respectively and have jointly requisitioned convening of an extra-ordinary general meeting to consider a resolution for recovering a loss suffered by the company from the concerned officer. The Board of directors declined to convene the meeting for the reason that the proposed resolution is outside the purview of the shareholders, being a routine matter. In the meantime, X transferred his shares to Z. Y now wants to convene the meeting himself. Can Y do so? Has the Board validly rejected the requisition for calling the meeting?  (c) When the articles of association of a private company do not contain any provision as to the retirement of directors, is it necessary for the directors of that company to retire at its each annual general meeting?  [6+8+2 = 16 marks]

Q. 7 (a) What is ‘postal ballot’? Identify any five items to be passed by the postal ballot only. (b) Enumerate the duties of a company secretary in connection with holding of a statutory meeting. [6+10 = 16 marks]

Q. 8 What statutory and statistical registers are required to be maintained by a company? Can such registers be maintained in electronic form? Explain the contents and significance of any two such registers. [16 marks]

COMPANY SECRETARY - Intermediate Examination

Group II - June 2002 - Company Law & Practice- Paper I

Answer 6 questions including question No.1, which is compulsory.

Question 1.Comment on the following statement: (i) In certain cases, prospectus need not be issued. (ii) The certificate of incorporation issued by the Registrar of Companies does not endorse an unlawful object as lawful. (iii) A company being an artificial person cannot be treated as a citizen under the Constitution of India. (iv) It is necessary for a company to hold more than half of the nominal value of the equity share capital of another company to be called its holding company. [5 x 4 = 20 marks]

Question 2. (a) What do you mean by ‘depository’? State the provisions of the Companies Act, 1956 regarding issue of shares in dematerialized form. (b) The following details have been extracted from the registered of members of XL India Ltd.:

XL India ltd., was incorporated on 3^rd October, 2001 and obtained its certificate for commencement of business on 17^th October, 2001. The company seeks to appoint its auditors. Advise XL India Ltd. regarding the applicable provisions for the appointment of auditors. [8+8=16 marks]

Question 3. (a) What are the charges that would be void against the liquidator and creditors unless registered ? (b) Explain the effect of floating charge becoming fixed or crystallized. [8+8=16 marks]

Question 4. What are the various documents and particulars that are to be furnished along with the application by a public company for getting its securities listed on a recognized stock exchange? [16 marks]

Question 5. (a) Smart, a registered shareholder of Dowitt Ltd., left his share certificates with his broker. A forged transfer deed in favour of Ramesh, accompanied by these share certificates were lodged with the company for registration. The company secretary, who had certain doubts, wrote to Smart informing him of the proposed transfer and in the absence of a reply within the stipulated time, registered Ramesh as a shareholder by endorsing the share certificates. Subsequently, Ramesh sold the said shares to John and John’s name was placed in the register of shareholders. Later on, Smart discovered that forgery has taken place. What remedy does Smart have? Advise Smart. (b) What are the requirements of the listing agreement relating to corporate governance with regard to --------- (i) Composition of the Board: (ii) remuneration of directors; and (iii) minimum number of the Board meeting. [6+10=16 marks]

Question 6. (a) High Dream Ltd. proposes to invest Rs.37 lakhs by acquiring equity share capital of XYZ Ltd. The financial position of High Dream Ltd. at the end of the financial year is as under: Authorised share capital Rs.1,00,00,000; Issued, subscribed and paid up capital Rs.50,00,000 ; Free reserves Rs.10,00,000 ; Advise High Dream Ltd., about the requirements to be complied with for the proposed investments in XYZ Ltd. (b) Earn More Ltd. has received a letter from Murthy informing purchase of 1,000 equity shares of the company through his broker, but transfer deeds have been misplaced in transit. Advise as to the procedure for effecting transfer of share in such a case. [10+6=16 marks]

Question 7. Draft resolutions for the following purposes and describe the type of resolution and meeting for; (i) Sub-division of shares. (ii) Change in the name of the company. (iii) Conversion of a public limited company into a private limited company. (iv) Disposal of one of the undertakings of the company. [4 x 4 = 16 marks]

Question 8. Distinguish between the following: (i) ‘Prospectus’ and ‘letter of offer’. (ii) ‘Deposit’ and ‘loan’. (iii) ‘Preference shares’ and ‘equity shares’. [5+5+6=16 marks]

COMPANY SECRETARY - Intermediate Examination

Group II - June 2002 - Company Law & Practice- Paper II

Answer 6 questions including question No.1, which is compulsory.

Question 1. Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required for: (i) Variation of terms of a contract mentioned in prospectus. (ii) Rights issue. (iii) Increase in the share capital. (iv) Affixation of seal. (v) Alteration in the articles of association to convert a public company into a private company. [4 x 5 = 20 marks]

Question 2. (a) Outline the procedure for declaration and payment of interim dividend. (b) Can the decision to pay interim dividend be revoked? (c) Under what circumstances can a director be removed by the central government? [8+2+6=16 marks]

Question 3. (a) Define ‘professional misconduct’ under the Company Secretaries Act, 1980 and illustrate your answer. (b) Enumerate the circumstances in which the provisions of section 209A of the Companies Act, 1956 may be invoked. [5+11=16 marks]

Question 4. (a) An annual general meeting of a company has been scheduled at 4 p.m. The Chairman of the Board of directors has arrived at the venue of the AGM, but is engaged in conversation with some shareholders. As a company secretary, what will you do at 4.15 P.M.? (b) A disabled shareholder, aged 70 years, arrives at the venue of the AGM, escorted by his driver, who helps him in climbing the steps and occupying a seat. Shareholder’s granddaughter, who is also a joint-holder, follows with her son aged 3 years and a baby in her arm. The company’s security personnel try to stop her from entering the venue of the meeting and also ask the driver to go out of the venue of the AGM. Advise on the action of the security personnel. (c) A director, aged 71 years, due to retire by rotation in the AGM, declares at the AGM that he is resigning due to old age and ill health when the resolution for his reappointment is taken up. Inspite of persuasion by many shareholders, he does not agree to continue as director. However, he does not send his resignation in writing to the Board subsequently, till the next Board meeting. Advise the chairman. (d) A public limited company, which has filed ‘statement in lieu of prospectus’ for acceptance of deposits, accepts an interest-free deposit as ‘security’ from its employee handling cash transactions. The amount is deposited in cash credit (CC) account of the company with a nationalized bank. Comment. [4 x 4 = 16 marks]

Question 5. (a) Explain the position of a company secretary as held by judicial pronouncements in decided cases. (b) What are the compliances/violations required to be reported in secretarial compliance certificate to be issued under section 383A of the Companies Act, 1956 as regards exercise of powers by the Board of directors? [10+6 = 16 marks]

Question 6. (a) Explain in brief the duties and responsibilities of statutory auditors under the Companies Act, 1956. (b) What are the contents of the register of investments ? Can it be inspected by shareholders and others? [10+6= 16 marks]

Question 7. (a) What are the disqualifications of the directors under the Companies Act, 1956 ? (b) How does the Companies Act, 1956 provide for protection of rights of minority shareholders? [10+6 = 16 marks].

Question 8. (a) State the consequences which follow upon the termination of agreement between the company and its managing director. (b) Write a detailed note on ‘audit committee’ under the Companies Act, 1956. [5+11 = 16 marks].

COMPANY SECRETARY - Intermediate Examination

Group II - Dec. 2001 - Company Law & Practice- Paper I

Answer 6 questions including question No.1, which is compulsory.

Question 1 Comment on the following statements: (i) The striking features of a company such as limited liability, distinct legal personality, perpetual succession and easy transferability of shares make it the best form of business organization. (ii) The Depositories Act, 1996 by its consequential amendments to the Companies Act, 1956 has made a distinct impact on the way shares and debentures are held and transferred by the investors. (iii) Every shareholder of the company is also known as the member, while every member may not be known as a shareholder. (iv) Money received as share premium by a company can be applies for limited purposes only. [5 marks each].

Question 2 (a) Who is a ‘small depositor’ under the Companies Act, 1956? (b) How are small depositors’ interests sought to be protected under the Companies Act, 1956? [4+12 = 16 marks]

Question 3 (a) The details of share capital and reserves and surplus of New Horizons Ltd. are as under

8% Redeemable preference shares of Rs.100 lakh are due for redemption at a premium of Rs.2 per share.
Work out the amount to be transferred to the capital redemption reserve account to carry out this redemption. If it is possible to issue further 5 lakh equity shares of Rs.10 each at a premium of Rs. 2 per share, whether it is still necessary for the company to transfer any amount to the capital redemption reserve account?
(b) Outline the procedure for shifting of registered office of a company. [6+10 = 16 marks]

Question 4 (a) Define the terms ‘employees stock option scheme’ (ESOS) and ‘employee stock purchase scheme’ (ESPS) under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. (b) What are the matters for which a listed company should obtain approval of the members in respect of ESOS and ESPS as per the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999? [4+12 = 16 marks]

Question 5 (a) “An unlimited company is not the same as an unincorporated company”. Comment.
(b) As per the audited balance sheet of Seelu Ltd. as on 31^st March, 2001 the details of share capital and reserves and surplus are as under:

Deferred revenue expenditure to the extent not written off as on 31^st March, 2001 is Rs. 0.50 lakhs. Break-up of unsecured loans as on 31^st March, 2001 is as follows:

This apart, unsecured debentures as on 31^st March, 2001 are as follows:

Compute limits upto which Seelu Ltd. can accept further deposits from the public and the shareholders. (Answer to the nearest rupees in thousands). [4+12 = 16 marks]

Question 6 (a) What are the guidelines issued by the SEBI for issue of bonus shares? Do these guidelines apply to bonus issue by existing private or unlisted companies? (b) What are the guidelines issued by the SEBI regarding pricing of equity shares in a preferential issue? [12+4=16 marks]

Question 7 (a) What are the advantages of debenture trust deed? (b) State the particulars that are to be given in a register of debenture holders. (c) Is a register and index of beneficial owners of debentures maintained by a depository deemed to be a register and index of debenture holders? (d) Is a company required to file a return of allotment for re-issue of forfeited shares? [6+6+2+2= 16 marks]

Question 8 (a) You are the company secretary of Paragon Ltd. The Chairman of the company seeks your views on the following. State your views with reasons: Company XYZ Ltd. is subsidiary of your company in which the holding of your company is 8,50,000 equity shares of Rs.10 each fully paid, which constitutes 85% of its paid up capital. XYZ Ltd. desires to issue further 8,00,000 equity shares of Rs. 10 each on which initially a sum of Rs.3 will be paid to ABC Ltd., to meet its long term capital requirements. On such an issue of further capital by XYZ Ltd., will XYZ Ltd. continue to be the subsidiary of your company? (b) State the conditions for issue of shares at a discount. (c) A company proposes to issue shares at a discount. Would the company’s prospectus require to disclose the amount of discount on shares issued earlier and not yet written off? [8+6+2 = 16 marks].

COMPANY SECRETARY - Intermediate Examination

Group II - Dec. 2001 - Company Law & Practice- Paper II

Answer 6 questions including question No.1, which is compulsory.

Question 1 Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required for: (i) Appointment of a whole-time company secretary. (ii) Increase in the authorized share capital of the company. (iii) Appointment of cost auditors pursuant to the order of the central government. (iv) Approval of the location of the registered office of the company incorporated recently. (v) Allotment of 1,00,000 equity shares to ABC Ltd. on preferential basis. [4 marks each].

Question 2 Explain the legal position and suggested action in the following circumstances: (i) First auditors were not appointed in time by the Board of directors in a public company. (ii) The managing director of a public company wants to purchase furniture of the company’s guest house at book value. (iii) The draft directors’ report of a company does not contain any clarification on the qualification made in the statutory auditors’ report on annual accounts. (iv) Dividends were recommended by the Board of directors on the basis of the paid-up capital amount. One shareholder objects to this and says that it should be on the basis of number of shares held and not on the basis of paid-up capital. [4 marks each].

Question 3 (a) State whether a company secretary can have the following powers: (i) To convene a Board meeting. (ii) To transfer shares. (iii) To hire vehicles for company’s business. (iv) To sign the annual accounts. (v) To borrow money for the business of the company. (b) What are the areas of practice of a company secretary? [10+6 = 16 marks]

Question 4 (a) Draft an agenda of a Board meeting including an item of business to convene an annual general meeting among other matters. (b) State whether there is oppression or mismanagement in the following cases: (i) A company is running on losses consecutively for the last 5 years. (ii) The Board of directors of a company took decision to finalise a joint venture abroad involving investment of Rs. 50 crore without passing any resolution in the shareholders’ meeting. (iii) A shareholder was not allowed inspection of members’ register and the books of account. The company did not declare dividend for the last 10 years. (iv) A public company fails to repay public deposits on the date of maturity; the company as well failed to pay some of its creditors who were also shareholders. [8+8 = 16 marks]

Question 5 (a) State in brief the rights of the concerned parties with regard to the following: (i) Right of a member of public to inspect the register of members. (ii) Right of a director to get copy of the minutes of Board meetings. (iii) Right of a corporate member to be represented at a general meeting. (iv) Right of a member to obtain copy of the annual return. (b) State briefly the essential contents which should be given in the directors’ report of a listed company. [8+8 = 16 marks]

Question 6 State the conditions and procedure for holding an extra-ordinary general meeting on requisition. [16 marks]

Question 7 (a) What is meant by ‘managerial personnel and ‘managerial remuneration’? Is there any prohibition on a company to simultaneously appoint different categories of managerial personnel ? Does the law prescribe any limit on payment of remuneration to such personnel? (b) Azad, the managing director of a company, fails to attend three Board meetings in the year. Should he vacate his office? (c) Richie, the managing director of Prosperous Ltd., wants to get sitting fees for attending Board meetings over and above his salary. Is this legally permissible? (d) In a Board meeting, two directors left the meeting after one hour but the remaining directors transacted certain business listed in the agenda even in the absence of such two directors. Is there any irregularity? [8+2+3+3 = 16 marks].

Question 8 (a) The validity of a resolution passed at a meeting depends on the proper constitution and conduct of the meeting. Explain. (b) List out eight industries covered by the Cost Accounting Records Rules. (c) Explain the Registrar’s power to seize documents. [6+4+6 = 16 marks].

COMPANY SECRETARY - Intermediate Examination

Group II - June 2001 - Company Law & Practice- Paper I

Answer 6 questions including question No.1, which is compulsory.

Question 1 Comment on the following statements: (i) The fundamental attribute of a corporate personality is that the company is a legal entity distinct from its members. (ii) A person holding secured or unsecured debentures have remedies for enforcing his rights. (iii) ‘Issued share capital’ and ‘subscribed share capital’ of a company are one and the same. (iv) The non-registration of a charge ( requiring registration under section 125) adversely affects both the chargeholder and the company concerned. [5 marks each]

Question 2 (a) Define ‘foreign company’. State the provisions of the Companies Act, 1956 applicable to a foreign company with regard to establishment of a ‘place of business’ in India. (b) The following information is available from the audited balance sheet as at 31^st March, 2001 of Towering Heights Ltd. which is an unlisted company:

The company seeks to implement buy-back of its shares in May, 2001. Compute the maximum limit upto which buy-back is permitted in the financial year 2001-2002. [8+8 = 16 marks]

Question 3 (a) What are the rights of a transferee of shares under section 206A of the Companies Act, 1956? (b) As a company secretary of a closely held company, enumerate the advantages of listing of shares to the company, investors and the public. [6+10= 16 marks]

Question 4 (a) Your company, which is listed on several stock exchanges, proposes to raise capital amounting to Rs. 5 crore by issue of rights shares to its shareholders. Prepare a note giving the procedure for issue of rights shares. (b) The name of Akhil is found entered in the register of members of a company. But Akhil contends that he is not a member of the company. The company maintain that Akhil has orally agreed to become a member and, hence, his name was entered in the register. Is the contention of Akhil valid? [12+4= 16 marks]

Question 5 How does ‘doctrine of indoor management’ operate as an exception to the ‘doctrine of constructive notice’? Are there any exceptions to the doctrine of indoor management? Answer with reference to relevant case laws. [16 marks]

Question 6 (a) Specify the conditions subject to which the following are treated as exempt deposits: (i) Unsecured loans from promoters. (ii) Debentures secured by mortgage of property. (iii) Deposits from directors of a public company. (b) What are the circumstances under which approval of members is not required in respect of inter-corporate loans and investments? [6+2+2+6= 16 marks]

Question 7 (a) Explain the provisions relating to maintenance of register of debenture-holders. (b) Mohan was holding 2,000 equity shares in a company on 20^th August, 2000 when the shareholders approved the proposal to issue bonus shares in the ratio of one equity share for every two shares held on a date to be determined by the Board. The Board determined the date of entitlement as 31^st October, 2000. Mohan sold his holdings in the company on 27^th August, 2000 and claimed bonus shares from the company. Is Mohan’s claim legally tenable? (c) Ajoy buys 200 shares in a company from Bijoy on the faith of a share certificate issued by the company. Ajoy tenders to the company a transfer deed, duly executed, along with Bijoy’s share certificate for transferring the shares in his name. The company discovers that the certificate in the name of Bijoy has been fraudulently obtained and refuses to register the transfer. Advise Ajoy. Is Ajoy entitled to get the shares transferred in his name? [4+6+6 = 16 marks]

Question 8 (a) What are the disclosures required to be made in a prospectus in respect of ‘promoter’ and ‘promoter group’? (b) What are the modes of reduction of share capital? Specify the cases of diminution of share capital which are not regarded as reduction of share capital. (c) Explain the provisions relating to ‘issue of shares at a discount’. [5+5+6 = 16 marks]

COMPANY SECRETARY - Intermediate Examination

Group II - June 2001 - Company Law & Practice- Paper II

Answer 6 questions including question No.1, which is compulsory.

Question 1 Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution with the majority required for; (i) Change of name of the company. (ii) Appointment of relative of a director to office or place of profit. (iii) Constitution of Share Transfer Committee. (iv) Convening of an annual general meeting and approval of the draft notice for the same. [5 marks each]

Question 2 (a) A public limited company has 10 directors as under: Non-retiring directors – 2, Directors liable to retire by rotation – 4, Additional directors – 4. State the number of directors retiring by rotation at the next annual general meeting and the number of directors vacating office. (b) The articles of a private limited company provide that a director should make a fixed deposit of Rs. 5,000 for being qualified to be a director. Examine. (c) Smart, a director, verbally resigned from his office at the Board meeting. His resignation was accepted although the articles provided for resignation in writing. Is the resignation valid? (d) For a special resolution in a company’s general meeting, 9 voted in favour, 2 against and 4 abstained. The chairman declared the resolution as passed. Is it a valid resolution? [4 marks each]

Question 3 (a) Examine the position of directors of a company as its trustee, agent and employee. According to you, what is the true relationship between the company and its directors? (b) Cosmos Ltd. has 11 directors out of which 4 were abroad. One of such directors had left his foreign address for all communications. In regard to an urgent matter, which could not wait till the next meeting, it circulated a resolution for approval of the directors. 4 out of 7 directors in India approved the resolution. Cosmos Ltd. claimed that the resolution was passed. Examine. [10+6 = 16 marks]

Question 4 (a) In the light of the provisions of the Companies Act, 1956, examine the following: (i) Order of special audit of a company. (ii) A company having its registered office in New Delhi wants to maintain its books of account at its factory in Kolkata. (iii) Contents of directors’ report as regards – (a) conservation of energy; and (b) employees. (b) An audit firm, comprising of two partners, holds office as auditor of 41 private companies out of which paid up capital of 20 companies exceeds Rs. 50 lakh. Decide whether this is in consonance with the applicable law. [12+4 = 16 marks]

Question 5 (a) Define the term ‘proxy’. How is a proxy appointed? What are his rights and limitations? State other provisions of the Companies Act, 1956 with regard to proxy. (b) State the matters which require special notice to be issued to the company and explain the action to be taken by the company in this regard. [10+6 = 16 marks]

Question 6 (a) Explain the provisions relating to appointment of chairman of a general meeting. (b) State the matters of ordinary business to be transacted at an annual general meeting. (c) What are the requirements in respect of the minutes of a general meeting? [6+4+6 = 16 marks]

Question 7 With reference to relevant provisions of the Companies Act, 1956, advise on the following matters: (i) Prem was appointed as an additional director of a company in the Board meeting held on 15^th January, 2000 and was to hold office as such upto the next annual general meeting scheduled to be held on or before 30^th September, 2000. The annual general meeting could not be held before 30^th September, 2000 and the company also could not obtain extension of time from the Registrar of Companies. The Board of Directors, however, desired that Prem should continue to be on the Board even after 30^th September 2000. (ii) An auditor is appointed from the conclusion of one annual general meeting until the conclusion of the next annual general meeting. Is he deemed to have ceased to hold office on the date when the meeting ought to have been held? (iii) Shyam is a qualified chartered accountant as well as company secretary, but designated as financial controller. The management of the company does not object to his doing practice as a company secretary on part-time basis. (iv) Mohan, a director of XYZ Ltd., died in an air crash. It has been decided to appoint Murari in his place. Will the company be required to call extra-ordinary general meeting to approve the latter’s appointment as a director? When appointed, how long Murari would remain in office ? [4 marks each].

Question 8 (a) “No compensation for loss of office is payable to a director. Are there any exceptions to this? Comment quoting relevant provisions of the Companies Act, 1956. (b) State the provisions relating to the signing of following types of documents; (i) Annual return. (ii) Minutes of Board meeting. (iii) Balance sheet and profit and loss account. [10+6 = 16 marks]

COMPANY SECRETARY - Intermediate Examination

Group II - December 2000 - Company Law & Practice- Paper I

Answer 6 questions including question No.1, which is compulsory.

Question 1 Comment on the following statements: (i) Confirmation of the Company Law Board is no longer necessary for amendment of ‘object clause’. (ii) Foreign companies having a place of business in India are also governed by the Companies Act, 1956. (iii) As compared to other unsecured creditors, a fixed deposit holder has certain additional remedies to compel repayment of a fixed deposit. (iv) A preliminary or pre-incorporation contract cannot be ratified, but a company can enter into a fresh contract after incorporation for this purpose. [5 marks each]

Question 2 (a) What are the requirements under the listing agreement relating to publication of unaudited quarterly results? (b) Draft the special resolution and the requisite explanatory statement for shifting of registered office from the State of Gujarat to the State of Maharashtra. [8 marks each]

Question 3 (a) When is a sole selling agent said to have substantial interest in a company? (b) Discuss the provisions relating to commencement of new business by an existing company. [6+10 = 16 marks]

Question 4 (a) What are ‘sweat equity shares’? Explain the provisions relating to issue of sweat equity shares. (b) The articles of association of a public limited company provides that dividend can be declared at an extra-ordinary general meeting. Examine the validity of such a provision in the articles. (c) Directors of a public limited company accepted a bill of exchange on behalf of a company. But the word ‘limited’ was omitted from the name of the company at the time of acceptance. Who can be held liable for the payment of the bill? [6+5+5 = 16 marks]

Question 5 (a) Define the term ‘member’. Explain whether a subsidiary company can be a member of its holding company. (b) (i) Explain the meaning of term ‘bodies corporate’ for the purpose of determination of ‘deemed public company?’ (ii) Mention the provisions applicable to a public company which specifically are not applicable to a ‘deemed public company’. [8+2+6 = 16 marks]

Question 6 (a) During the secretarial audit, you find that a charge in favour of a financial institution is not registered with the Registrar of Companies even within the extended time of thirty days. Explain the steps that you would recommend to the Company to rectify this mistake. (b) What are the provisions of the Companies (Acceptance of Deposits) Rules 1975 for premature repayment of deposits? (c) A company increased its authorized capital from Rs. 7 crore to Rs. 32 crore by passing appropriate resolutions at general body meeting. But it did not file the notice in Form 5 before the Registrar of Companies and also did not pay the requisite filling fee within the stipulated period or thereafter. Two years later, the earlier resolution was rescinded and share capital brought back to Rs. 7 crore as it originally stood. Is the company absolved from liability for failure to follow the procedure? [8+4+4 = 16 marks]

Question 7 (a) What is ‘illegal association’? (b) What are the consequences of carrying on business by an illegal association (c) Define ‘promoter’ (d) What are the remedies available to the company against the promoter who makes a secret profit in connection with promotion of the company and does not disclose the same? [3+5+2+6 = 16 marks]

Question 8 (a) How can a holding company lend money to its subsidiary company to meet the later’s urgent needs? (b) “A company does not have unlimited powers to alter its articles of association”. Comment. (c) Enumerate the exceptions to the ‘doctrine of indoor management’. [5+5+6 = 16 marks]

COMPANY SECRETARY - Intermediate Examination

Group II - December 2000 - Company Law & Practice- Paper II

Answer 6 questions including question No. 1 which is compulsory.

Question 1 Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed and the type of resolution required for: (i) Invitation of public deposits. (ii) Listing of shares. (iii) Appointment of ‘body corporate’ to office or place of profit under the company. (iv) Creation of charge relating to debentures. [5 marks each]

Question 2 (a) What are the provisions of the Companies Act, 1956 with regard to holding of an annual general meeting? (b) Outline the duties and responsibilities of a company secretary before, during and after the holding of an annual general meeting by a listed public limited company. [8 marks each]

Question 3 Explain the legal position and the suggested action in the following circumstances: (i) No auditors could be appointed in the annual general meeting of a public limited company. (ii) The wife of the managing director, who was a chartered accountant and the financial advisor in the company, was given a salary advance of Rs. 10,000. (iii) The annual general meeting of a company was adjourned sine die and a retiring director, who was otherwise eligible for reappointment, could not be appointed before adjournment. (iv) PQR Ltd., having paid-up capital of Rs. 50 lakh, entered into a contract with company XYZ Ltd., in which director D was holding 20% shares. The director did not disclose his interest at the time of approval of the contract by Board. [4 marks each]

Question 4 (a) What are the remedial measures for prevention of oppression and mismanagement under the Companies Act, 1956? Explain the procedure for applying to the central government to prevent oppression and mismanagement. Who can make such application? (b) Briefly state the ‘rule of majority’ and its exceptions. [10+6 = 16 marks]

Question 5 (a) Draft the directors’ report of a public limited company with assumed facts and figures. (b) What are the provisions relating to payment of sitting fees to the director for attending Board meetings? [12+4 = 16 marks]

Question 6 (a) What are the provisions relating to circulation of members’ resolution? Can members themselves circulate resolution to be proposed and moved at the annual general meeting? (b) “Interest can be paid out of capital”. Elucidate. (c) X was appointed as an additional director in the Board meeting held on 15^th January, 1999 of ABC Ltd. and was to hold office until the next annual general meeting of the said company. The next annual general meeting, which should have been held by 30^th September, 1999 could not be held due to circumstances beyond control. The Board desires that X should continue on the Board after 30^th September, 1999. Advise the Board. [8+4+4 = 16 marks]

Question 7 (a) A company whishes to induct a person as an additional director and appoint him as managing director. State the procedure involved. (b) Under what circumstances can one person form a valid quorum? (c) “Certain decisions can only be taken by the Board of directors by a unanimous vote at the meeting”. Discuss. [8+4+4 = 16 marks]

Question 8 Advise the management on the following matters stating the legal provisions and procedures therefor: (i) Political contributions by a company. (ii) Dismissal of a company secretary. [8 marks each]

COMPANY SECRETARY - Intermediate Examination

Group II - Dec. 1998 - Company Law & Practice- Paper I

Answer 6 questions including question No.1, which is compulsory.

Question 1 Comment on the following statements:

(i) No member can claim himself to be the owner of the company’s property during its existence or in its winding-up. (ii) A certificate of incorporation is the conclusive evidence that all the objects for which the company has been registered have been accepted as valid in law. (iii) The benefit of ‘doctrine of indoor management’ is not available under certain circumstances. (iv) A charge becomes void against the liquidator & the creditors if the particulars thereof are not filed for registration.

Question 2 (a) B S & Co. Ltd. is registered as a public Ltd company. The share holding pattern of the company is under:

The BOD of the company proposes to convert it into a private company. Advice the BOD about the steps to be taken for its conversion into a private ltd company including reduction in the number of members, if necessary.

Question 2 (b) State the circumstances under which the Central Govt may prohibit appointment of sole selling agents.

Question 3 (a) (i) What is ‘prospectus’ under the Companies Act 1956 ? (ii) State the consequences of false & misleading statements in a prospectus. (b) What do you mean by expression ‘pari passu’? Can a company issue debentures with pari passu clause?

Question 4 (a) Explain the consequences of failure to get the shares listed in one or more recognised stock exchange(s) named in the prospectus. (b) State the provisions of the Companies Act 1956 relating to service of documents. (c) To what extent the validity of share transfer deed for a private company & a public company - listed & unlisted - differs?

Question 5 (a) ABC (pvt) Ltd was incorporated on 10th June, 1996. A similar company with identical name & same objects was also incorporated on 10th June 1997. ABC (Pvt) Ltd came to know about this & filed a petition on 10th January, 1998. Explain he remedies available to the first company. (b) Explain the concept of ‘corporate entity’ & specify three circumstances under which corporate veil can be lifted.

Question 6 Outline the provisions of the Companies Act 1956, regarding - (i) Inter-company investments; & (ii) Inter-company loans.

Question 7 (a) Defines a Govt Company & state the provisions of the Companies Act 1956 relating to government companies. State four exemptions granted to such companies. (b) Sushil, a share holder, holding 100 shares in XYZ Ltd. applied to the company for issuing of a duplicate shares certificate. As a company secretary, advice the company with particular reference to the circumstances & conditions subject to which duplicate share certificates can be issued.

Question 8 (a) Explain the circumstances under which register of members may be rectified & state the procedure therefor. (b) Explain any two of the following: (i) Underwriting (ii) Publication of name. (iii) Liquidity maintenance requirements under the Companies (Acceptance of Deposits) Rules, 1975.

COMPANY SECRETARY - Intermediate Examination

Group II - Dec. 1998 - Company Law & Practice- Paper II

Answer 6 questions including question No.1, which is compulsory.

Question 1 Draft specimen resolutions for transacting the following items of business indicating the kind of meeting at which each resolution is to be passed & the type of resolution required to ---

(i) Change in name of company. (ii) Constitute The committee of directors to approve transfer of securities (iii) Commence new business mentioned under other objects in the memorandum of association. (iv) To reduce the share capital.

Question 2 (a) What are the areas of practice specified for a company secretary in practice? (b) What constitutes professional misconduct for a company secretary in practice under the Company Secretaries Act, 1980? Give three illustrations. (c) S, a practising company secretary, accepts the position of the company secretary in practice in a company previously held by C, another company secretary in practice. S did not communicate with C in writing. Examine the position.

Question 3 (a) What are the contents of the director’s report under the Companies Act 1956 ? Explain the provisions relating to signing of director’s report. (b) Explain the law relating to authentication of annual accounts. (c) ABC Ltd. was registered as a public limited company on 5th May, 1998. The first auditor was not appointed within the stipulated time. Advice the company on the steps to be taken mentioning the relevant provisions of the Companies Act, 1956.

Question 4 (a) Define the term ‘company secretary’. Explain the provisions relating to appointment of company secretary in various companies with a particular reference to qualification requirements. (b) State the duties & liabilities of a company secretary under the Companies Act, 1956.

Question 5 Examine the following statements under the provisions of the Companies Act 1956: (i) A single member does not constitute quorum for a meeting. (ii) A company may remove a director before expiry of his term, but there are certain exceptions. (iii) The Companies Act, 1956 prescribes certain disqualifications for appointment as an auditor of a company. (iv) Minutes of the proceedings of meetings can be maintained in the loose leaf form.

Question 6 Advice the MD of XYZ Ltd. in each of the following cases:- (i) He wants his brother’s son to be appointed as assistant secretary in company at a monthly remuneration of Rs. 15000. (ii) He wants to borrow Rs. 5000 from the company. (iii) He wants to resign from the position of MD of the company. (iv) His appointment has been made at a Board meeting where majority of the directors present were interested.

Question 7 (a) A company declared a dividend in the AGM held on 31st May 1998. Due to financial stringencies, it could not pay the dividend within the stipulated time. Explain the consequences that follow. (b) The BOD of a company intends to pay interim dividend. Advice the board on the provisions & procedure to be followed in this regard specifying the time frame, etc. (c) A share holder who was abroad for seven years claims that he has not received the dividend declared by the company during his absence from the country. Advice the steps to be taken by the share holder for recovery of the dividend not so received.

Question 8 Write short notes on any four of the following: (i) Signing & filing of annual return. (ii) Return as to allotment: