2

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5jan - LOS & GCA--8 am
G Jan e Scenariomco-6 : 30 ph
-
Question
Examine the following situations in the light of the Companies
Act, 2013:
(i) Mr. Prem, a Chartered Accountant, has been appointed as
an auditor of OA Limited in the Annual General Meeting of the
company held in September 2023, in which he accepted the
assignment. Subsequently, in January 2024 he joined as a
IIis also working as a Finance Executive of-
partner
Mr. Ajay
in the consultancy firm where G
Mr. Ajay is also a partner.
A Limited.
Employee.
(ii) Mr. Tom, a practicing Chartered Accountant, holds
securities in B Limited with a face value of ` 1,00,000.
Considering this, can Mr. Tom be appointed as the auditor of B
Limited, or does his holding disqualify him from the role? (5
Marks) (MTP Nov 24)
Solution
• (b) C (i) Section 141(3)(c) of the Companies Act, 2013 prescribes that any person who is
a partner or in employment of an officer or employee of the company will be
disqualified to act as an auditor of a company. Section 141(4) provides where a person
appointed as an auditor of a company incurs any of the disqualifications mentioned in
section 141(3) after his appointment, he shall vacate his office as such auditor and such
vacation shall be deemed to be a casual vacancy in the office of the auditor.S
Conclusion
CIn the present case, Mr. Prem, an auditor of A Limited, joined as partner with consultancy
firm where Mr. Ajay has become a partner and Mr. Ajay is also the Finance executive of A
Limited. Hence, Mr. Prem has attracted clause (3)(c) of section 141 and, therefore, he shall
be deemed to have vacated office of the auditor of A Limited.S
Law !
(ii)C
As per section 141(3)(d)(i), an auditor is disqualified to be appointed as an auditor if
he, or his relative or partner holdsC
- any security of or interest in the company or its
subsidiary, or of its holding or associate company or a subsidiary of such holding company.
Conclusion
S
• In the present case, Mr. Tom is holding security of ` 1,00,000 in the B Limited, therefore,
he is not eligible for appointment as an auditor of B Limited.
g
Question
Verma Limited has Equity Share Capital of 20,000 shares
@ `10 each. The Company has received a requisition from
Mr. Jai and Mr. Narayan each holding 3,000 equity shares
to call an Extraordinary General Meeting to remove
Managing Director of the company who has been found
to be involved in some malpractices. The company failed
to call the said meeting. The requisitionists desires to call
the meeting by themselves to pass the resolution to
remove the Managing Director. Explain the validity of such
resolution passed in the said meeting referring the
provisions of the Companies Act, 2013.(5 Marks) (MTP
Nov 24)
Solution
Law
CF
As per section 100(2) of the Companies Act, 2013, read with Rule 17 of the Companies (Management and
Administration) Rules, 2014, the Board shall on the requisition of, in the case of company having a share capital, such
number of members who hold, on the date of receipt of requisition, at least 1/10th of such paid-up capital of the
company as on that date carries the right of voting, shall call for the meeting.
The requisition made under sub-section (2) shall set out the matters for the consideration of which the meeting is to be
called and shall be signed by the requisitionists and sent to the registered office of the company.
The Board must, within 21 days from the date of receipt of a valid requisition, proceed to call a meeting on a day not
later than 45 days from the date of receipt of such requisition.
If the Board does not, within 21 days from the date of receipt of a valid requisition in regard to any matter, proceed to
call a meeting for the consideration of that matter on a day not later than 45 days from the date of receipt of such
requisition, the meeting may be called and held by the requisitionists themselves within a period of three months from
the date of the requisition. [Sub-Section 4].
Sub-section (5) of Section 100 provides that the requisitionists shall call and hold the meeting in the same manner in
which the meeting is called and held by the Board.
Sub-section (6) of Section 100 any reasonable expenses incurred by the requisitionists in calling a meeting under sub-
section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any
S
fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.
conclusion
[In the given case, meeting called by requisitionists to pass the resolution to remove the Managing Director in the said
meeting can be said to be valid as the requisition moved from Mr. Jai and Mr. Narayan holding
` 60,000 (each holding ` 30,000) equity share capital (1/10th of 1,00,000) is in compliance with the legal requirement
and will be binding on the company, its officers and members provided if all the conditions for a valid meeting are
I
satisfied.
Question
Anoj Limited declared a final dividend to its shareholders at the
Annual General Meeting on 1st August, 2024. As per the
decision, the dividend payment was to be made within the
stipulated 30-day period. However, due to internal financial
constraints, the company failed to pay the declared dividend
and did not dispatch the dividend warrants to the shareholders
within the required timeframe. The default continued until
15th October, 2024, leading to shareholder complaints.
In light of this scenario, what specific punishments and
liabilities could the company and the directors face due to this
failure to pay the declared dividend within the 30-day period?
Give your answer as per the provisions of the Companies Act,
2013.(5 Marks)
Solution dividend
for failure
unishment pay to .

According to section 127 of the Companies Act, 2013, in case a company fails
to pay declared dividends or fails to post dividend warrants within 30 days of
declaration, following punishments are applicable:
fraud
(i) Every director of the company shall be punishable with imprisonment
of up to two years, if he is knowingly a party to the default. And, he shall also
be liable to pay minimum fine of ` 1,000 for every day during which such
default continues.
(ii) The company shall be liable to pay simple interest at the rate of 18%
p.a. during the period for which such default continues.
Question
The auditor of ABC Limited (not a government
company) has resigned on 31st December, 2023,
while the Financial year of the company ends on 31st
March, 2024. Explain how such an auditor shall be
appointed, as per the provisions of the Companies
Act, 2013.(5 Marks) (MTP Nov 24)
 Solution of usual i

auditor vacancy
in case
of

pointment
new

The situation as stated in the question relates to the creation of a casual

vacancy in the office of an auditor due to resignation of the auditor before
the Annual General Meeting (AGM), in case of a company other government
-Under section 139 (8)(i) any casual vacancy in the office of an ①
company.
auditor arising as a result of his resignation, such vacancy can be filled by the
-

Board of Directors within 30 days thereof and in addition the appointment of

G by the company at a general meeting
the new auditor shall also be approved
convened within three months of the recommendation of the Board&and he
-
-

shall hold the office till the conclusion of the next annual general meeting.
Dii Also of
write-in resignation
case give APT-3 to

① Co Di Roc Di GaltlosCAG (u0(2].

. .

.
① Punishment for above-121)
Question
Examine the validity of the following decision of the
Board of Directors with reference to the provisions of
the Companies Act, 2013:
In an Annual General Meeting of a company having
share capital, 80 members present in person or by
proxy holding more than 1/10th of the total voting
power, demanded for poll. The chairman of the
meeting rejected the request on the ground that only
the members present in person can demand for
poll.(5 Marks) (MTP Nov 24)
Solution
Lao
C
W
Section 109 of the Companies Act, 2013 provides for the demand of poll before or on the
declaration of the result of the voting on any resolution on show of hands. Accordingly,
law says that:- demand law
E
Before or on the declaration of the result of the voting on any resolution on show of
hands, a poll may be ordered to be taken by the Chairman of the meeting on his own
motion, and shall be ordered to be taken by him on a demand made in that behalf:-
(i) In the case a company having a share capital, by the members present in person or
by proxy, where allowed, and having not less than one-tenth of the total voting power or
holding shares on which an aggregate sum of not less than five lakh rupees or such higher
amount as may be prescribed has been paid-up; and
(ii) in the case of any other company, by any member or members present in person or
by proxy, where allowed, and having not less than one tenth of the total voting

[
power.
Conclusion
In the given question, 80 members present in person or by proxy holding more than
1/10th of the total voting power, demanded for poll. Hence, the contention of the
I because even proxy can demand poll.
Chairman is not valid.
Question Special
- -
business material fact

X
(a) ABC Limited served a notice of- General Meeting
upon its members. The notice stated that a resolution
to increase the share capital of the company would
-

be considered at such meeting. Raj, a shareholder of

the company complained that the amount of the
proposed increase was not specified in the notice. Is
the notice valid?(5 Marks) (MTP Nov 24)

↑
Solution
⑨ Law
Under section 102(2)(b) of the Companies Act, 2013, in the case of any general meeting other
business.
-
En
than an Annual General Meeting, all business transacted thereat shall be deemed to be special
Explanatory statement >

Further under section 102(1), a1statement setting out the following material facts concerning each
item of special business to be transacted at a general meeting, shall be annexed to the notice
calling such meeting, namely:
(1) the nature of concern or interest, financial or otherwise, if any, in respect of each items,
of:
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);
(2) any other information and facts that may enable members to understand the meaning,
scope and implications of the items of business and to take decision thereon.
conclusion

111112
Thus, the objection of the shareholder is valid since the details of the item to be considered at the
general meeting are not fully disclosed. The information about the amount is a material fact with
reference to the proposed increase of share capital. The notice is, therefore, not a valid notice
considering the provisions of section 102 of the Companies Act, 2013.
is a special
In
present case , since item increase in shi capital
Since this
business
,
amt of metal increase is a material fact
 fact is not disclosed , explanatory statement is

Question invalid leading to notice is invalid.

Nath Private Limited is a start-up company. Mr. P has

been appointed as Accounts Manager of Nath Private
Limited. The Board meeting for approval of accounts
is to held be on 01.08.2024. For this he has to prepare
S
theCfinancial statements for approval by the Board.
Referring to section 2(40) of the Companies Act,
2013, advise Mr. P about the statements that are
required to be prepared. (5 Marks) (MTP Dec 24)
Solution
Law
-
As per section 2(40) of the Companies Act, 2013, Financial Statement in relation to
-

a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any
activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred
to in sub-clause (i) to sub-clause (iv)
Exemption: As per the proviso to section 2(40), the financial statement, with
respect to one person company, small company, dormant company and private
company (if such private company is a start-up) may not include the cash flow
statement. Cousion
In the instant case, Mr. P has to prepare the prescribed financial statements Oexcept
Cash Flow Statement; since Nath Private Limited is a start-up private company.
- -
Question
Mr. Ramchandra is a partner and in- charge (and certifies
financial statements) of A & Associates. The firm is
appointed as an auditor firm of Badri Limited (listed
company). Mr. Ramchandra retires from A & Associates
and after some time join Gupta & Gupta firm as a partner,
on 20/05/24. In the general meeting of Badri Limited held
on 15/06/24, the company appointed Gupta & Gupta firm
as next auditor of the company. Advise Badri Limited,
whether the company has adhered to the provision of the
Company Act, 2013, by appointing Gupta & Gupta as
auditor for the company?(5 Marks) (MTP Dec 24)
 individual I term
applicabili mas
-

rotation se

t
tencret 2 terms
Rotation rules .

fir -

-who
dis

in real E ① same fi
hirm with common

partner
common
network

Since Badn' Itd is a listed Co ,

so
Conclusion :
from gupta
&

Therefore new
-

to it
-

rotation applies -

to be
& Gupta asociates is disqualified with
common partner
auditor ofCo as it has
associates
Vebring fir A 2A
Solution To Rotation-applicability

-
-

According to section 139(2) of the Companies Act, 2013, no listed company or a company belonging to such
class or classes of companies as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive years; and
(b) an audit firm as auditor for more than two terms of five consecutive years.
Provided that –
(i) an individual auditor who has completed his term under clause (a) shall not be eligible for re-
appointment as auditor in the same company for five years from the completion of his term;
(ii) an audit firm which has completed its term under clause (b), shall not be eligible for re-appointment
as auditor in the same company for five years from the completion of such term.
Provided further that as on the date of appointment no audit firm having a common partner or partners to the
other audit firm, whose tenure has expired in a company immediately preceding the financial year, shall be
appointed as auditor of the same company for a period of five years.

-
As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors) Rules, 2014, if a partner, who is in
charge of an audit firm and also certifies the financial statements of the company, retires from the said firm
and joins another firm of chartered accountants, such other firm shall also be ineligible to be appointed for a
period of five years.
Here, Mr. Ramchandra has retired from A & Associates and joined Gupta & Gupta Firm. Mr. Ramchandra was a
partner, in- charge Associates (and certifies the financial statement of the company) in A & Associates. He
retires from A & Associates and joins Gupta & Gupta firm.
As per the facts of the question and provisions of law, Gupta & Gupta Firm will also be ineligible, to be
appointed as auditor of Badri Limited (listed company) for a period of 5 years. because common packe
-

-eving firm and a new firm

.
Question
A General Meeting of ABC Private Ltd was scheduled to be held on
15thApril, 2024 at 3.00 P.M. As per the notice, the members who will
be unable to attend the meeting in person can appoint a proxy and
the proxy forms duly filled should be sent to the company, so that
company can receive it within time. Mr. X, a member of the company
appoints Mr. Y as his proxy and the proxy form dated 10-04-2024 was
deposited by Mr. Y with the company at its registered office on 11-04-
2024. Similarly, another member Mr. W also gives two separate
proxies to two individuals named Mr. M and Mr. N. In the case of Mr.
M, the proxy dated 12-04-2024 was deposited with the company on
the same day and the proxy form in favour of Mr. N was deposited on
- All the proxies viz., Y, M and N were present before the
14-04-2024.
meeting. XX. is pot
According to the provisions of the Companies Act, 2013, who would
be the persons allowed to represent as proxies for members X and W
respectively?(5 Marks) (MTP Dec 24)
Solution

,
A Proxy is an instrument in writing executed by a shareholder authorizing another
person to attend a meeting and to vote thereat on his behalf and in his absence. As
per the provisions of section 105 of the Companies Act, 2013, every shareholder
who is entitled to attend and vote has a statutory right to appoint another person

Ca
as his proxy. Section 105(4) provides that a proxy received 48 hours before the
meeting will be valid. Further, any provision in the articles of association of the
company requiring instrument of proxy to be lodged with the company more than
48 hours before ause
meeting shall have effect as if 48 hours had been specified
therein.
R
Thus, in case of member X, the proxy Y will be permitted to represent as proxy on
his behalf as form for appointing proxy was submitted within the permitted time.
However, in the case of member W, the proxy M will be permitted to represent as
the proxy. Whereas submission of form authorizing N to represent as proxy was
deposited in less than 48 hours before the meeting, so N will not be allowed to
represent W
Question
State the persons responsible for complying with the
provisions regarding maintenance of Books of
Accounts of a company. Support with the help of
relevant provisions of the Companies Act, 2013.(5
Marks) (MTP Dec 24)
16 .
Solution
Persons responsible to maintain books:
-

As per section 128 (6) of the Companies Act, 2013, the person responsible to
take all reasonable steps to secure compliance by the company with the
requirement of maintenance of books of account etc. shall be:
(a) Managing Director,
(b) Whole-Time Director, in charge of finance
(c) Chief Financial Officer
(d) Any other person of a company charged by the Board with duty of
complying with provisions of section 128.
Question
Kedar Limited, an unlisted company, registered in the state of
Haryana with 100 shareholders want to organize the Annual
General Meeting of the company for the financial year 2023-
2024 as under:
(i) The meeting shall be held on 28th September 2024 which
happens to be Rakshanda, a declared as holiday by the Haryana
Government.
(ii) The venue for the meeting shall be Lonavala, a hill resort
in Maharashtra. Out of 100 shareholders, 98 have given their
consent in writing for conducting the meeting in Lonavala.
Advise the company on the feasibility of the above with
reference to the provisions of the Companies Act, 2013.(5
Marks) (MTP Dec 24)
Solution
Law
Section 96(2) of the Companies Act, 2013 states that every Annual General Meeting
(AGM) shall be called on any day that is not a National Holiday and shall be held either at
the registered office of the company or at some other place within the city, town, or
village in which the registered office of the company is situated.
However, AGM of an unlisted company may be held at any place in India if consent is
given in writing or by electronic mode by all the members in advance.
Explanation—For the purposes of this sub-section, "National Holiday" means and includes
a day declared as National Holiday by the Central Government.
conclusi
In the instant case,
(i) Kedar Limited, an unlisted company, can hold its AGM on 28th September, 2024
which happens to be a holiday declared by Haryana Government because this is not a
national holiday.
(ii) Kedar Limited cannot hold its AGM in Lonavala, a hill resort in Maharashtra
because consent for this has to be given by all the members in advance and here only 98
members out of 100 have given their consent for conducting the meeting in Lonavala
Question
Form Limited is engaged in the business of manufacturing
shoes for kids. It is required to hold its Annual General
Meeting (AGM) for the financial year ending 31st March
2024 by 30th September 2024. However, due to internal
disputes among the directors, the company was unable to
convene the AGM by the due date.
Explain the relevant provisions of the Companies Act,
2013, with respect to the filing of the financial statements
with the Registrar in this case.(5 Marks) (MTP Dec 24)
Solution movies
.

8
As per section 137 of the Companies Act, 2013, where the Annual General
Meeting of a company for any year has not been held, the financial
statements along with the documents required to be attached, duly signed
along with the statement of facts and reasons for not holding the AGM shall
be filed with the Registrar within 30 days of the last date before which the
AGM should have been held and in such manner, with such fees or additional
fees as may be prescribed. (provisional FS).
f S with ROL
Once
O held file final
.

when Aam

within so days of holding Aam .

~
Question Attention !!!!! (Eifaut)
Mr. H acquired a property from PQR Limited which
was mortgaged to ABC Bank. He settled the dues to
ABC Bank in full and the same was registered with the
sub-registrar who noted that the mortgage had been
settled. But neither the company nor ABC Bank filed
particulars of satisfaction of charge with the
jurisdictional Registrar of Companies. Can Mr. H
approach the Registrar and seek any relief in this
regard? Discuss this matter in the light of provisions
of the Companies Act, 2013.(5 Marks) (MTP Dec 24)
⑨
Solution
!
Section 83 of the Companies Act, 2013 empowers the Registrar to make entries
with respect to the satisfaction and release of charge even if no intimation has
been received by him from the company. Accordingly, with respect to any
registered charge if an evidence is shown to the satisfaction of Registrar that the
debt secured by charge has been paid or satisfied in whole or in part or that the
part of the property or undertaking charged has been released from the charge or
has ceased to form part of the company’s property or undertaking, then he may
enter in the register of charges a memorandum of satisfaction that:

X•
•
the debt has been satisfied in whole or in part; or
the part of the property or undertaking has been released from the charge
or has ceased to form part of the company’s property or undertaking.
CThis power can be exercised by the Registrar despite the fact that no intimation has
been received by him from the company. S
The Registrar shall inform the affected parties within 30 days of making the entry in
the Register of Charges. Co or
Conclusion' Even if
·

chargeholder do not inform sabsfaction

To ,
it can record satisfaction himself if comes to know
to about satisfaction from sub-resisten
Question
Mr. Prakash purchased a commercial property in
Mumbai belonging to PQR Limited after entering into
an agreement with the company. At the time of
registration, Mr. Prakash came to know that the title
deed of the company was not free and the company
expressed its inability to get the title deed transferred
in Prakash’s name contending that he ought to have
the knowledge of charge created on the property of
the company. In line with the provisions of the
Companies Act, 2013, advise whether the contention
of PQR Limited is correct?(5 Marks) (MTP Dec 24)
 notice
Solution beembe
.

C
According to section 80 of the Companies Act, 2013, where any charge on
any property or assets of a company or any of its undertakings is registered
under section 77 of the Companies Act, 2013, any person acquiring such
property, assets, undertakings or part thereof or any share or interest therein
shall be deemed to have notice of the charge from the date of such
registration.
law
Thus, section 80 clarifies that if any person acquires a property, assets or
undertaking in respect of which a charge is already registered, it would be
deemed that he has complete knowledge of charge from the date of its

3
registration. Mr. Prakash, therefore, ought to have been careful while
purchasing property and should have verified beforehand that PQR Limited
had already created a charge on the property.

Prakash
J
In view of above, the contention of PQR Limited is correct Therefore
have not course of action .
conclusion
·
Question
Sunday Ltd. is a listed entity engaged in the business of providing engineering solutions to clients
across the country. The company followed consistent growth over the years. Rate of Declaration
of dividend in immediately preceding three financial years were 15%, 20%, and 25%.
Unfortunately, due to obsolescence of a special part of machinery, company incurred losses in
current financial year.
Even though, during the financial year 2023-24, the company declared interim dividend of 10% on
the equity shares

⑧
The Board of Directors of the company approved the financial result for the financial year 2023-24
in its meeting held on 5th August, 2024, and recommended a final dividend of @15% in this board
meeting.
The general meeting of the shareholders was convened on 31st August, 2024. The shareholders of
the company demanded that since interim dividend @10% was declared by the company, so the
final dividend should- not be less than 20%. It was also submitted that rate of declaration of
dividend in immediately preceding three years were- 15%, 20% and 25%, but the Company
Secretary emphasised that final dividend cannot be increased. 20 %
Advise whether the decision of Company Secretary is correct? What should be correct rate of final
dividend?Justify your answer with reference to provisions of the Companies Act, 2013.(5 Marks)
(MTP july 24)
 Solution
·
Interim dividend: As per section 123(3) of the Companies Act, 2013, the Board of Directors of a company may declare
interim dividend during any financial year or at any time during the period from closure of financial year till holding of the
annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year in which such
interim dividend is sought to be declared.
①Provided that in case the company has incurred loss during the current financial year up to the end of the quarter
immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate
higher than the average dividends declared by the company during the immediately preceding three financial years.
Final dividend: The company in general meeting may declare dividends, but no dividend shall exceed the amount
recommended by the Board. [Clause 80 of Table F in Schedule I]
conclusion
① According to the given facts, Sunday Ltd. incurred losses in current financial year 2023-24. It is also provided that, in the
immediately preceding three financial years, the company declared dividend at the rate of 15%, 20% and 25% respectively.
Accordingly, the rate of dividend declared shall not exceed 20%, the average of the rates (15+20+25=60/3) at which dividend
was declared by it during the immediately preceding three financial years. interi divided-valid
DiBoard of Directors of Sunday Ltd. recommended a final dividend @15% for financial year 2023-24 in the meeting held on 5th
August 2024. It was approved in the general meeting. However, shareholders demanded that since Interim dividend was at
the rate of 10%, so final dividend should not be less than 20%. The general meeting cannot declare the dividend at a rate
higher than the rate of dividend recommended by the Board.
Yes, the decision of Company Secretary that final dividend cannot be increased beyond the rate of 15% as recommended in
the Board Meeting, is correct.
 convect
Question floating chase - fried change

&
Explain the meaning of
Crystallization of a Floating
Charge. (5 Marks) (MTP july
24) mention
cases
-
F
Solution
means
When the creditor enforces the security due to the breach of terms and
conditions of floating charge or the company goes into liquidation, the
-
floating charge will become a fixed charge on all the assets available on that
date. This is called crystallization of a floating charge.
⑲ effect
A floating charge remains dormant until it becomes fixed or crystallizes. On
crystallization of charge, the security (i.e. raw material, stock-in- trade, etc.)
becomes fixed and is available for realization by the lender so that borrowed
es
money is repaid. Crystallization of floating charge may occur when the terms
and conditions of floating charge are violated or the company ceases to
continue its business or the company goes into liquidation or the creditors
enforce the security covered by the floating charge
D effect Di Cases Isituations
① meaning
Question

Define the term ‘Book of

account’ as per the
Companies Act, 2013.(5
Marks) (MTP july 24)
Solution MASC .
Books
-
of Accounts- -

(b) According to section 2(13) of the Companies Act, 2013, ‘Books of

account’ includes records maintained in respect of:
(i) m all sums of money received and expended by a company and matters
in relation to which the receipts and expenditure take place;
(ii) S all sales and purchases of goods and services by the company;
A
(iii) the assets and liabilities of the company; and
(iv) the items of cost as may be prescribed under section 148 in the case of a
C company which belongs to any class of companies specified under that
section
Question
Assess the eligibility of the

-
following individuals for
appointment as Auditors in
accordance with the regulations
outlined in the Companies Act,
2013
Solution

-
As per section 141(3)(d)(i) of the Companies Act, 2013, an auditor is
disqualified to be appointed as an auditor if he, or his relative or partner
holding any security of or interest in the company or its subsidiary, or of its
holding or associate company or a subsidiary of such holding company.
Further the proviso provides that, the relative of the auditor may hold the
securities or interest in the company of face value not exceeding of `
1,00,000.
In the present case, Chitralekha (spouse of Chintamani, the auditor), is having
securities of Nagmani Limited having face value of ` 80,000, which is within
the prescribed limits under the proviso to section 141(3)(d)(i). Therefore,
Chintamani will be eligible to be appointed as an auditor of Nagmani Limited.
Question
Vishal Ltd., an unlisted company, has been directed by
the Central Government to prepare periodical
financial results and undergo a limited review of
these results. The Board of Directors is objecting,
arguing that, as an unlisted entity, they are not
required to prepare periodical financial results.
Analyze this situation with reference to the relevant
provisions of the Companies Act, 2013.(5 Marks)
(MTP july 24)
Solution
Law
Periodical Financial Results [Section 129A of the Companies Act, 2013]
-
The Central Government may, require such class or classes of unlisted companies,
as may be prescribed,:
(a) to prepare the financial results of the company on periodical basis and in
prescribed form
(b) to obtain approval of the Board of Directors and complete audit or limited
review of such periodical financial results in the prescribed manner; and
(c) file a copy with the Registrar within a period of thirty days of completion of the
relevant period with such fees as may be prescribed
Concuria
Therefore, the objection of the Board of Directors on the ground that as Vishal Ltd.
is an unlisted company, periodical financial results need not be prepared, is not
correct. Section 129A clearly specifies that the prescribed class(es) of unlisted
companies has to prepare Periodical Financial Results.
Question
Enumerate the persons who are
entitled to receive the Notice of
the General Meeting, as per the
provisions of the Companies
Act, 2013.(5 Marks) (MTP july
24)
Solution
Persons entitled to receive the Notice of the General
-

Meeting
According to section 101(3) of the Companies Act, 2013, the
notice of every meeting of the company shall be given to:
(1) every member of the company, legal representative of
any deceased member or the assignee of insolvent
member;
(2) the auditor or auditors of the company;
(3) every director of the company
Question
(a) Enumerate the provisions of the Companies Act,
2013 in respect to the following:
(i) Time limit for filing of annual return when Annual
General Meeting is held. days
(ii) Time limit for filing of annual return when Annual
General Meeting is not held.(5 Marks) (MTP july 24)
Am last dave-days
Solution
Time limit for Filing of Annual Return
(i) A copy of annual return shall be filed with the Registrar
of Companies (RoC) within 60 days from the date on which
the Annual General Meeting (‘AGM’) is held.
(ii) Where no annual general meeting is held in any year, it
shall be filed with the Registrar of Companies (RoC) within
60 days from the date on which the annual general meeting
should have been held, along with the reasons for not
holding the AGM. ↓ holding
of
last day AGM
:

X
Question
The GovernmentEof India is holding 51% of the paid-up equity share
capital of Surya Ltd. The Audited financial statements of Surya Ltd. for
the financial year 2023-24 were placed at its annual general meeting
held on 1st August, 2024. However, pending the comments of the
Comptroller and Auditor General of India (CAG) on the said accounts
the meeting was adjourned without adoption of the accounts. On
receipt of CAG comments on the accounts, the adjourned annual
general meeting was held on 29th September, 2024 whereat the
accounts were adopted. Thereafter, Surya Ltd. filed its financial
statements relevant to the financial year 2023-24 with the Registrar
of Companies on 20th October, 2024. Examine, with reference to the
applicable provisions of the Companies Act, 2013, whether Surya Ltd.
has complied with the statutory requirement regarding filing of
cand adopted) with the Registrar?(5 Marks)
accounts (unadopted
ES not
(MTP Aug 24) provisioned
pled
Solution
O
According to first proviso to section 137(1) of the Companies Act, 2013, where the
financial statements are not adopted at annual general meeting or adjourned
annual general meeting, such unadopted financial statements along with the
required documents shall be filed with the Registrar within thirty days of the date
of annual general meeting and the Registrar shall take them in his records as
provisional till the financial statements are filed with him after their adoption in
the adjourned annual general meeting for that purpose.
According to second proviso to section 137(1) of the Companies Act, 2013,
financial statements adopted in the adjourned AGM shall be filed with the
Registrar within thirty days of the date of such adjourned AGM with such fees or
such additional fees as may be prescribed.
In the instant case, the accounts of Surya Ltd. were adopted at the adjourned AGM
held on 29th September, 2024 and filing of financial statements with Registrar was
done on 20th October, 2024 i.e. within 30 days of the date of adjourned AGM.
Hence, Surya Ltd. has not complied with the statutory requirement regarding filing
of unadopted accounts with the Registrar, but has certainly complied with the
provisions by filing of adopted accounts within the due date with the Registrar
Question
What are the powers of Registrar to make entries of
satisfaction and release of charges in the absence of
any intimation from the company. Discuss this matter
in the light of provisions of the Companies Act,
2013.(5 Marks) (MTP Aug 24) &
Solution (Secus) .
registrar
por satisfaction
to
to record

O
Section 83 of the Companies Act, 2013 empowers the Registrar
-
release of charges even if no intimation has been received
-
to make entries with
by him from the company. - respect to the satisfaction and

This situation would arise where the property subject to a charge is sold to a third-party and neither the company nor
the charge-holder has intimated the Registrar regarding satisfaction of the earlier charge.
Accordingly, with respect to any registered charge if evidence is shown to the satisfaction of Registrar that the debt
secured by charge has been paid or satisfied wholly or in part or that the part of the property or undertaking charged
has been released from the charge or has ceased to form part of the company’s property or undertaking, then he may
enter in the register of charges a memorandum of satisfaction that:
•
·

• D the debt has been satisfied in whole or in part; or

part of the property or undertaking has been released from the charge or has ceased to form part of the
company’s property or undertaking.
This power can be exercised by the Registrar despite the fact that no intimation has been received by him from the
company.
According to section 82 (4), section 82 shall not be deemed to affect the powers of the Registrar to make an entry in the
register of charges under section 83 or otherwise than on receipt of an intimation from the company i.e. even if no
intimation is received by him from the company.
Information to affected parties: According to section 83 (2), the Registrar shall inform the affected parties within 30 days
of making the entry in the register of charges.
Issue of Certificate: As per Rule 8 (2) of the Companies (Registration of Charges) Rules, 2014, in case the Registrar enters
a memorandum of satisfaction of charge in full, he shall issue a certificate of registration of satisfaction of charge
Question -upho 1000 membe -
5

(b) KMN Ltd. scheduled its annual general meeting to be held on 11th March,
2024 at 11:00 A.M. The company has 900 members. On 11th March, 2024 following
O
persons were present by 11:30 A.M.
3
(1) P1, P2 & P3 shareholders - >

unrew
(2) P4 representing ABC Ltd. - > I
(3) P5 representing DEF Ltd. - A

P6 & P7 as proxies of the shareholders O

-
>
-
(4)
(i)
whether quorum was present in the meeting.
(ii)
after
-
-
Ge
J
Examine with reference to relevant provisions of the Companies Act, 2013,

What will be your answer if P4 representing ABC Ltd., reached in the meeting
11:30 A.M.? No Quaum
=
(iii) In case lack of Quorum, discuss the provisions as applicable for an adjourned
meeting in terms of date, time & place.
(iv)
(5 Marks) (MTP Aug 24) I
What happens if there is no Quorum in the Adjourned meeting?
Answe conclusion
Law :
F
① Quorm required
⑲ counting of Quamm

Conclusia :
-
D
D

i
Solution
law
-

·
(b) According to section 103 of the Companies Act, 2013, unless the articles of the company provide for a larger
number, the quorum for the meeting of a Public Limited Company shall be 5 members personally present, if number of
members is not more than 1000.
(i) (1) P1, P2 and P3 will be counted as three members.
(2) If a company is a member of another company, it may authorize a person by resolution to act as its representative
at a meeting of the latter company, then such a person shall be deemed to be a member present in person and counted for
the purpose of quorum. Hence, P4 and P5 representing ABC Ltd. and DEF Ltd. respectively will be counted as two members.
(3) Only members present in person and not by proxy are to be counted. Hence, proxies whether they are members or
not will have to be excluded for the purposes of quorum. Thus, P6 and P7 shall not be counted in quorum.
In the light of the provision of the Act and the facts of the question, it can be concluded that the quorum for Annual General
Meeting of KMN Ltd. is 5 members personally present. Total 5 members (P1, P2, P3, P4 and P5) were present. Hence, the
requirement of quorum is fulfilled.
(ii) The section further states that, if the required quorum is not present within half an hour, the meeting shall stand
adjourned for the next week at the same time and place or such other time and place as decided by the Board of Directors.
Since, P4 is an essential part for meeting the quorum requirement, and he reaches after 11:30 AM (i.e. half an hour after the
starting of the meeting), the meeting will be adjourned as provided above.
(iii) In case of lack of quorum, the meeting will be adjourned as provided in section 103.
In case of the adjourned meeting or change of day, time or place of meeting, the company shall give not less than 3 days'
notice to the members either individually or by publishing an advertisement in the newspaper.
(iv) Where quorum is not present in the adjourned meeting also within half an hour, then the members present shall
form the quorum
 -

Question
The Board of Directors of Avni Ltd. requested its
Statutory Auditor to accept the assignment of
designing and implementation of suitable financial
information system to strengthen the internal control
mechanism of the Company. How will you approach
to this proposal, as a Statutory Auditor of Avni Ltd.,

Pancance
taking into account the consequences, if any, of
accepting this proposal?(5 Marks) (MTP Aug 24)
 44 attract
Law D:
141(3) -
disquality if Sec 1

44-cases

i
side audited should
Conclusion : statutory he accepts
reject offer by Co. because if
resulting into casual
he will be disqualited
vacancy
Solution
⑧
According to section 144 of the Companies Act, 2013, an auditor appointed
under this Act shall provide to the company only such other services as are
approved by the Board of Directors or the audit committee, as the case may
be. But such services shall not include designing and implementation of any
financial information system.
In the said instance, the Board of directors of Avni Ltd. requested its
Statutory Auditor to accept the assignment of designing and implementation
of suitable financial information system to strengthen the internal control
mechanism of the company. As per the above provision said service is strictly
prohibited.
In case the Statutory Auditor accepts the assignment, he will attract the
penal provisions as specified in Section 147 of the Companies Act, 2013.
In the light of the above provisions, we shall advise the Statutory Auditor not
to take up the above stated assignment
Question
CA. Mudit is a partner in SM & Company (Chartered
Accountants) and ML & Company (Chartered
Accountants). SM & Company are statutory auditors
of Liberal Ltd. (a listed company) for past ten years as
on 31st March, 2027. Advice under relevant
provisions of the Companies Act, 2013, whether ML &
Company be appointed as statutory auditor of Liberal
Ltd. during cooling off period (after 31st March, 2027)
for SM & Company?(5 Marks) (MTP Aug 24)
Solution applicably rotationles
Rotation
① -
(b) Section 139(2) of the Companies Act, 2013, provides that no listed company
or a company belonging to prescribed classes of companies, shall appoint or re-
appoint an audit firm as auditor for more than two terms of five consecutive years.
The proviso to section 139(2) provides that an audit firm which has completed its
terms, shall not be eligible for re-appointment as auditor in the same company for
five years from the completion of such term
Further, it provides that as on the date of appointment no audit firm having a
common partner or partners of the other audit firm, whose tenure has expired in a
company immediately preceding the financial year, shall be appointed as auditor of
the same company for a period of five years.
In the given question, SM & Company has also completed its two terms of 5 years
(i.e. 10 years in total).Thus, ML & Co. cannot be appointed as statutory auditor of
Liberal Ltd. during cooling period because CA. Mudit was the common partner in
both the Audit firms. This prohibition is only for 5 years i.e. upto year 2032. After 5
years, Liberal Ltd. is free to appoint ML & Co. as its statutory auditors
Question landsch

⑨
The Board of Directors of ABC Ltd. called an extra-
ordinary general meeting upon the requisition of
O
members. However, the meeting was adjourned on
the ground that the quorum was not present at the
meeting. In the light of the provisions of the
Companies Act, 2013, the Board of directors on the
decision to adjournment of the meeting.(5 Marks)
(MTP Aug 24)
Solution

C
According to section 100 (2) of the Companies Act 2013, the Board
of directors must convene a general meeting upon requisition
made by the stipulated minimum number of members.
As per section 103(2)(b) of the Companies Act, 2013, if the quorum
is not present within half an hour from the appointed time for
holding a meeting of the company, the meeting, if called on the
a
requisition of members, shall stand cancelled. Therefore, the
meeting stands cancelled and the stand taken by the Board of
Directors to adjourn it, is not proper and valid. Conarch
>
Question
(a) Zorab Garments Limited served a notice of
General Meeting upon its members. The notice stated
that a resolution to increase the share capital of the
company would be considered at such meeting.
Roshni, a shareholder of the company complained
that the amount of the proposed increase was not
specified in the notice. Is the notice valid?(5 Marks)
(MTP Aug 24)
Solution
(a) Under section 102(2)(b) of the Companies Act, 2013, in the case of any general meeting
other than an Annual General Meeting, all business transacted thereat shall be deemed to be
special business.
Further under section 102(1), a statement setting out the following material facts concerning each
item of special business to be transacted at a general meeting, shall be annexed to the notice
calling such meeting, namely:
(a) the nature of concern or interest, financial or otherwise, if any, in respect of each items, of
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);
(b) any other information and facts that may enable members to understand the meaning,
scope and implications of the items of business and to take decision thereon.
Thus, the objection of the shareholder is valid since the details of the item to be considered at the
general meeting are not fully disclosed. The information about the amount is a material fact with
reference to the proposed increase of share capital. The notice is, therefore, not a valid notice
considering the provisions of section 102 of the Companies Act, 2013.
Question
14. Vishal Limited is an unlisted public company, having five directors in its
board which includes two independent directors.
Sam (P) Limited, is subsidiary company of Vishal Limited, actively carrying on
its business, having paid up capital of ` 1.5 crore with 40 members and
turnover of ` 18 crore, respectively and the said company is not a start-up
company.
It is also provided that Sam (P) Limited is not a start up company.
In the context of aforesaid case-scenario, please answer to the following
question(s):-
Whether Sam (P) Limited is mandatorily required to prepare cash flow
statement for the financial year as a part of its financial statements?
Provide your answer by analyzing Sam (P) Limited into following category of
companies:-
(i) Small company, and
(ii) (ii) Dormant company, respectively. (RTP Jan 25)
Solution
14.
(i) Y ve
According to section 2(10) of the Companies Act, 2013, Financial statement in relation to a company, includes:
a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):
Provided that the financial statement, with respect to one person company, small company, dormant company and private company (if such
private company is a start-up) may not include the cash flow statement.
For considering the applicability of preparation of cash flow statement in case of Sam (P) Limited, it is required first to analyze that Sam (P)
Limited does not fall in the following categories:
(i) Small company – A company which is a subsidiary company cannot be categorized as a small company as per proviso to section
2(85). Thus, even though its paid up capital and turnover are within the
prescribed limits, as Sam (P) Limited is a subsidiary company of Vishal Limited, it cannot be considered as small company.
(ii) Dormant company – It is given that the company is actively carrying on its business, so it cannot be also categorized as a dormant
company based upon the facts given.
So, Sam (P) Limited shall be deemed to be a public company as it is subsidiary of Vishal Limited, an unlisted public company and so it will not fall
into this category of exemption as well.
Thus, it can be concluded that Sam (P) Limited is mandatorily required to prepare cash flow statement for the financial year as a part of its
financial statements as it does not fall in any of the categories of companies mentioned under proviso to section 2(10) of the Companies Act,
2013.
Question similar quetich
15. Pran Limited is an unlisted company, having its
registered office at Agartala. The company scheduled
its Annual General Meeting (AGM) on 31st July, 2024
in Goa. The meeting commenced at 3:00 PM and
concluded at 6:00 PM.
It is also provided that by 1st July, 2024, the company
had obtained written consent from all members via
email, agreeing to hold the AGM at this out-of-state
location. As per the Companies Act, 2013, evaluate
whether the AGM was validly conducted. (RTP Jan 25)
Solution
Law
-
① Holding of Arm a
unised
15. Section 96(2) of the Companies Act, 2013, states that every annual
general meeting shall be called during business hours, that is, between 9 AM
and 6 PM on any day that is not a National Holiday and shall be held either at
the registered office of the company or at some other place within the city,
town or village in which the registered office of the company is situated.
Provided that annual general meeting of an unlisted company may be held at
any place in India if consent is given in writing or by electronic mode by all
the members in advance.
In the given question, Pran Limited is an unlisted company and consent of all
members to conduct the AGM at Goa has been received in advance (by 1st
July, 2024). Also, the meeting was started well within the prescribed time i.e.
at 3.00 PM. Hence, the meeting was validly called
Question Attention /
16. HD Software Limited is engaged in the business
of providing software services. The company
appointed its statutory auditors (not the first auditor).
The Board of directors of the company informed the
auditor that the fees shall be fixed by the Board of
directors only.
But the auditor objected to the same. Now the
directors have approached you to advise them
whether they can solely fix the remuneration of the
auditor. (RTP Jan 25)
 Sec142
-
in hm .
members
Law !
-
① Eit by
authorise
However member
can

their remn.
Bod to fix
fic remh
BoD to
Conclusiv Contention of
is invalid they
on it's
- ,
own

can fix only if authorise by

Boy
Solution
16. Section 142 of the Companies Act, 2013, provides for remuneration of
auditors. According to this section the remuneration of the auditors of a company
shall be fixed by the company in general meeting or in such manner as the
company in general meeting may determine. However, the Board may fix
remuneration of the first auditor appointed by it.
The remuneration shall, in addition to the fee payable to an auditor, include the
expenses, if any, incurred by the auditor in connection with the audit of the
company and any facility extended to him but does not
include any remuneration paid to him for any other service rendered by him at the
request of the company.
As per the facts of the question and stated provision, remuneration of the
appointed statutory auditors of a company shall be fixed by the company in general
meeting or in such manner as the company in general meeting may determine as
they are not the first auditor.
Hence, the contention of the Board of directors that they can fix the remuneration
of the auditor on their own is not valid