REVISION TEST PAPER

RTP SEP-25
INTERMEDIATE EXAMINATION

[Enforcement Date: 9th September, 2024]

PAPER – 2:
For (i) Pg 11.6
CORPORATE AND OTHER
Form, procedure and time for making application and submission of
LAWS prescribed documents: According to the Companies (Registration of
Foreign Companies) Rules, 2014, the above information shall be filed with

PART – I: AMENDMENTS FOR SEPTEMBER 2025 EXAMINATIONS the Registrar within 30 days of the establishment of its place of business in
India, in Form FC-1 along with prescribed fees and documents required to
The Study Material (July 2024 edition) is applicable for September 2025
be furnished as provided in section 380(1). The application shall also be
examinations. This study material is updated for all amendments till 30th June,
2024. supported with an attested copy of approval from the Reserve Bank of India
under the Foreign Exchange Management Act or Regulations, and also from
All relevant amendments/ circulars/ notifications etc. in the Company law part
other regulators, if any, approval is required by such foreign company to
for the period 1st July, 2024 to 28th February, 2025 are mentioned below:
establish a place of business in India or a declaration from the authorised
THE COMPANIES ACT, 2013
representative of such foreign company that no such approval is required.
Chapter 11: Companies Incorporated Outside India
For (ii) Pg 11.7
Notification G.S.R 491(E) dated 12th August, 2024
Proviso to rule 8(1) is newly inserted.
The Central Government has amended the Companies (Registration of Foreign
Companies) Rules, 2014, through the Companies (Registration of Foreign
Companies) Amendment Rules, 2024.
Amendment:
In the Companies (Registration of Foreign Companies) Rules, 2014,-
(i) in rule 3, in sub-rule (3), for the word, “registrar”, the words, “Registrar,
Central Registration Centre” shall be substituted.
(ii) in rule 8, in sub-rule (1), the following proviso shall be inserted, namely:-
“Provided that the documents for registration by a foreign company referred
to in sub-rule (3) of rule (3) shall be delivered in Form FC-1 to the Registrar,
Central Registration Centre.”.

2 SEPTEMBER 2025 EXAMINATION

REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

PART – II: QUESTION AND ANSWERS realizing the shares had unpaid amounts, he sent an objection email on
24th July, 2024. However, the company went ahead with the transfer on
QUESTIONS 27th July, 2024, saying his objection came too late. According to the
company’s rules, the Board can approve the transfer of partly paid shares if
they believe the buyer can pay the remaining amount in the future.
DIVISION A: MULTIPLE CHOICE QUESTIONS In another case, Mr. Varun, one of the shareholders of Kapoor Limited, is the
Case Scenario 1 legal representatives of a deceased shareholder, Mr. Kartik. He had written an
application to the company, to transfer the shares (of Mr. Kartik) in his name.
Kapoor Limited is a mid-sized listed manufacturing company incorporated in
But Mr. Varun did not receive any reply from the company. Mr. Varun went to
the year 2010 by R.D. Kapoor. Mr. Kapoor has two son, Mr. Vineet and
the company office to inquire about the same. The company refused to
Mr. Aditya. Both Mr. Aditya and Mr. Vineet are working as directors in Kapoor
transfer the shares in his name, as he is not the registered member of the
Limited.
company.
Kapoor Limited had some compliance issues in the past. In 2016–17, the
For your information, the company’s financial position as of 31st March, 2024
company issued redeemable preference shares but later failed to pay
is as follows:
dividends on them for some time. In September 2018, the company fixed this
by clearing all its loans and paying the pending dividends to the preference x Paid-up equity share capital: ` 200 crore (20 crore shares of ` 10 each)
shareholders. After resolving these issues, the company proposed to issue new x Free reserves: ` 600 crore
equity shares with differential rights for the financial year 2019–20.
x Securities premium: `150 crore
As part of its broader capital raising strategy, the board of directors decided
to issue three different securities: x Secured loans: ` 400 crore

x a rights issue of equity shares to existing shareholders, x Unsecured loans: `300 crore

x a new class of preference shares offered exclusively to current equity The Board of Directors approved a buy-back proposal on 15th September,
shareholders, and 2024, to purchase 3 crore equity shares at ` 60 per share. The company had
previously conducted a buy-back of 1 crore shares (` 10 crore) in August 2023
x a public issue of convertible debentures. during the financial year 2023-24. The new buy-back is planned for October
So, for the rights issue, it prepares a simplified document omitting several 2024, which falls in financial year 2024-25. The Chief Financial Officer has
disclosures required under section 26(1) and for the new preference shares, confirmed that post-buy-back, the debt-to-capital ratio would remain within
they created a detailed prospectus but excluded certain financial reporting. prescribed limits, and the shares are fully paid-up.
But for the convertible debentures, they prepare a complete prospectus with In the light of the stated facts and figures, answer the following Multiple
all section 26(1) requirements. Choice Questions, as per the provisions of the Companies Act, 2013:
Further, Ms. Roshni, a shareholder, owned 1,500 partly paid equity shares in 1. Since the default was made good in FY 2018-2019, the company
the company (` 8 paid out of ` 10). On 5th July 2024, she applied to transfer considered to issue new equity share with differential rights. According
500 of these shares to Mr. Bakshi, who didn’t know about it. The company to the provisions of the Companies Act, do you think the company is
sent him a notice on 10th July, 2024, which he received on 12th July, 2024. eligible to issue the shares for the financial year 2019-2020?
Since Mr. Bakshi was abroad, he saw the notice only on 20th July, 2024. After

3 SEPTEMBER 2025 EXAMINATION

4 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

(a) Yes, the company is immediately eligible to issue new shares as it 4. Based on the buy-back limitations under the provision of the Companies
has cleared all the dues and loan by September 2018. Act, do you think the proposed buy-back is valid?
(b) No, the company is ineligible to issue the shares as the company (a) Yes, the buy-back is valid as the total amount (` 180 crore) is
needs to wait three years till March 31, 2022. within 25% of the aggregate paid-up capital and free reserves
(c) Yes, the company is eligible to issue new shares in the next (` 800 crore), and the buy-back in the new financial year is not
financial year, as the default was made good in the previous affected by the previous year's buy-back.
FY year 2018-2019. (b) Yes, the buy-back is valid as the number of shares (3 crore) is
(d) No, the company is ineligible to issue the new shares as the within the 25% of the total paid-up equity capital (5 crore shares).
company needs to wait for five years till March 31, 2024. (c) Yes, the buy-back is valid as the value of shares being bought back
2. According to the provision of the Companies Act, do you consider the (` 180 crore) represents only 22.5% of the aggregate paid-up
company's action of affecting the transfer of partly paid shares to capital and free reserves (` 800 crore).
Mr. Bakshi is valid? (d) No, the buy-back is invalid as the total amount (` 180 crore)
(a) Yes, because the company waited for more than 7 days from the combined with the premium being paid (` 150 crore above face
date of dispatch of notice before registering the transfer. value) exceeds 25% of the aggregate paid-up capital and free
reserves.
(b) No, because the transferee did not give his explicit consent before
the transfer of partly paid shares. 5. The company had earlier made buy-back of 1 crore shares in August
2023. Can it legally conduct another buy-back in October 2024?
(c) No, because Mr. Bakshi made objection within 2 weeks from the
date of receipt of notice. (a) Yes, as both of the gap between the buy backs is more than 1 year

(d) Yes, because the Board has assessed Mr. Bakshi’s financial (b) No, as only one buy-back is allowed in the company’s lifetime
capability before approving the transfer. (c) No, only listed companies can do multiple buy-backs
3. According to the provision of the Companies Act, can the company deny (d) Yes, but only if Tribunal gives specific permission
transferring shares in Mr. Varun’s name and what is the company’s
obligation? 6. Suppose, if Kapoor Limited’s post-buy-back debt-to-equity ratio would
have exceeded 2:1, which of the following is correct?
(a) Yes, the company can refuse the transfer if he is not a registered
shareholder. (a) Buy-back is still valid if Board approves

(b) No, the legal representative has the right to transfer even if they (b) Buy-back will be invalid unless a higher ratio is prescribed by the
are not registered shareholder. Central Government (through Notification) for the company

(c) No, the company can deny if the legal representative’s name is not (c) The ratio rule applies only to private companies
registered with the company. (d) Buy-back is still valid as the Companies Act, 2013, does not
(d) Yes, the company needs the approval from the Tribunal before prescribe any limit on debt-to-equity ratio.
transferring the shares.

5 SEPTEMBER 2025 EXAMINATION

6 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

Independent MCQs 9. Ms. Smriti, an Indian national, recently won ` 41 lakh in an international
7. Samyak Solutions Limited held its Annual General Meeting (AGM) on online lottery. She now wishes to remit an equivalent of US $50,000
20th September, 2024 to adopt the financial statements for the financial abroad to a foreign account using her lottery winnings. She approached
year ending 31st March, 2024. However, due to lack of quorum, the her authorized dealer bank to request foreign exchange for this purpose.
meeting was adjourned and was finally held on 27th September, 2024. As per the provisions of the Foreign Exchange Management Act, 1999
What is the last date for filing the Annual Return with the Registrar of and the relevant Rules, what is the correct position regarding
Companies under the Companies Act, 2013. Ms. Smriti’s request to remit foreign exchange out of her lottery
winnings?
(a) 60 days from 31st March, 2024
(a) The remittance is allowed under the Liberalised Remittance
(b) 60 days from 20th September, 2024
Scheme (LRS) without any approval.
(c) 60 days from 27th September, 2024
(b) The remittance is allowed only with prior approval of the Reserve
(d) 60 days from 30th September, 2024 Bank of India.
8. Blue Leaf Limited, an Indian company with a total paid-up share capital (c) The remittance is allowed only with prior approval of the Central
of ` 50 crore, has a wide base of shareholders, including a large number Government.
residing in the Middle East. Out of its total capital, ` 15 crore worth of
(d) The remittance is prohibited, as it falls under the First Schedule to
shares are held by members residing in Kuwait.
the FEM (Current Account Transactions) Rules, 2000.
To facilitate better maintenance of records and communication with its
10. What among the following could be considered in the term ‘Immovable
overseas shareholders, the company decides to open a foreign register
Property’ as per the General Clauses Act, 1897?
in Kuwait containing the names and particulars of those members and
other security holders residing there. The foreign register is formally (i) The soil for making bricks
opened on November 1, 2024. (ii) Right to catch fish
Which of the following actions is Blue Leaf Limited required to take in (iii) Right to drain water
this context?
(iv) Doors and Windows of the house
(a) File a resolution passed by the Board approving the foreign
register with the Registrar of Companies within 60 days from (a) Only (i) and (iv)
November 1, 2024. (b) Only (i), (ii) and (iv)
(b) Send an intimation to the Ministry of External Affairs within 15 (c) Only (i) and (ii)
days of opening the foreign register.
(d) Only (ii), (iii) and (iv).
(c) File with the Registrar of Companies a notice of the situation of
Descriptive Questions
the Kuwait office within 30 days from November 1, 2024, along
with the prescribed fee. 11. On 30th June 2023, Sunrise Infratech Limited, raised secured deposits
amounting to ` 160 crore from the public at an interest rate of 12% per
(d) Apply to the Reserve Bank of India for approval to maintain a
annum, repayable after a period of 30 months. The company created
foreign register outside India.

7 SEPTEMBER 2025 EXAMINATION

8 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

charges within the prescribed time in favour of the trustees for during the proceedings, the Chairman exercised his discretion and
depositors, securing the deposits by creating charges over the following adjourned the meeting to 20th June, 2025. On that date, only three
assets: members (in person) attended the adjourned meeting. Would such
x Land and Building – ` 110 crore a meeting be valid in terms of quorum requirements?

x Plant and Machinery – ` 30 crore The company has approached you to analyse both scenarios with
reference to the provisions of the Companies Act, 2013.
x Factory Shed – ` 20 crore
13. Stridewalk Limited, a listed company engaged in the manufacturing and
x Trademark – ` 20 crore
export of premium shoes and accessories, has been undergoing financial
x Goodwill – ` 30 crore restructuring over the past few years. After several years of operational
You are required to examine the validity of the charges created, losses and sluggish growth, the Board recently appointed a new
particularly considering the nature of the assets offered as security, with Production Manager, Mr. Arjun Mehra, whose strategic improvements
reference to the applicable provisions of the Companies Act, 2013. have helped to revive the company's margins and production efficiency.

12. The company, Fateh Limited, engaged in the business of electronics In light of the improved performance and renewed investors’
manufacturing, has a paid-up share capital of ` 12.50 crore and a confidence, the Board of Directors, at its meeting held on 20th April,
shareholder base comprising 3,500 members. The company's equity 2025, resolved to recommend a final dividend of `50 lakh to its equity
shares are listed on a recognized stock exchange, and it has a history of shareholders — a notable development as this would be the first
strong shareholder participation in general meetings. dividend declaration in eight years.

On 10th May, 2025, the Board of Directors issued a notice convening the The financial data available is as follows:
Annual General Meeting (AGM) to be held on Saturday, 13th June, 2025 x Current year profit (after providing for depreciation and necessary
at 11:00 AM at the company’s registered office in Mangalore, for reserves): ` 16 lakh
considering ordinary and special business items, including approval of
x Accumulated profits /free reserves over the past eight years: ` 170
the financial statements and appointment of a new independent
lakh
director.
x Paid-up share capital of the company: ` 680 lakh
On the scheduled date, however, the required quorum, was not present.
Consequently, the meeting was adjourned to the same time and place x The proposed dividend of ` 50 lakh is intended to be funded partly
on the next Saturday, i.e., 20th June, 2025. from the current year’s profit and partly from the accumulated
profits of previous years.
In connection with the meeting and its adjournment, the company’s
compliance officer has raised the following queries for legal clarification: As the current year’s profits alone are not sufficient to meet the
proposed dividend payout, the company plans to draw from free
(i) If only two members (in person) are present at the adjourned
reserves as permitted under the Companies Act, 2013.
meeting on 20th June, 2025, will the meeting be validly held and its
business transacted? With reference to the provisions of the Companies Act, 2013 and the
Companies (Declaration and Payment of Dividend) Rules, 2014, examine
(ii) Assume that on 13th June, 2025, 16 members (in person) were
whether the proposed dividend declaration by Stridewalk Limited
present, but due to disorderly conduct by a few shareholders

9 SEPTEMBER 2025 EXAMINATION

10 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

complies with the legal conditions applicable in the case of inadequate

Share Premium 1
profits.
General Reserve 3.52
14. New Sales Pvt. Limited, a company engaged in the business of trading
Profit & Loss Account 1.58
heavy-duty paper tapes used in industrial packaging, has seen
consistent growth over the past five years. The company’s turnover for The company decided to issue 30% of its equity share capital as sweat
the financial year 2024–25 crossed ` 130 crore, with a net profit of ` 9.2
equity shares to a class of directors and permanent employees with the
crore.
objective of motivating them and making them partners in the
During the same financial year, the company’s long-serving Chief
company's growth. The proposed sweat equity shares will be subject to
Financial Officer (CFO), Mr. Ram, retired in December 2024 due to
a lock-in period of five years.
prolonged health issues. Following his retirement, Mr. Shyam, a qualified
Chartered Accountant with two decades of experience in financial Accordingly, the company passed a resolution in its general meeting
reporting, was appointed as the new CFO in March 2025. authorizing the issuance of 15 lakh sweat equity shares at a current
Upon assuming his duties and reviewing the company’s past financial market price of ` 25 per share, to be issued for a consideration of ` 5
records and statutory filings, Mr. Shyam noted certain material per share to the identified class of directors and employees.
classification errors and omissions in the audited financial statements for
the year 2021–22. In light of the above facts and in accordance with the provisions of the
Companies Act, 2013, examine the following:
Concerned about the potential implications of these discrepancies,
Mr. Shyam advised the Board of Directors of New Sales Pvt. Limited to (i) Whether size of issue of sweat equity shares was appropriate?
revise the financial statements for FY 2021–22, even though the financial
statements had already been adopted by the shareholders and filed with (ii) Whether lock-in period was justifiable?
the Registrar of Companies (RoC). 16. Shubham Limited is the holding company of Vaibhav Pvt. Limited. As per
With reference to the relevant provisions of the Companies Act, 2013, the financial statements of Vaibhav Pvt. Limited for the financial year
examine and advise whether New Sales Pvt. Limited is permitted to ending 31st March 2025, its turnover was `1.80 crore and its paid-up
revise its financial statements for the financial year 2021–22. share capital was ` 80 lakh. The Board of Directors of Vaibhav Pvt.
15. Pride Pvt. Limited, a start-up by a few qualified professionals, was Limited intends to avail the status of a small company under the
incorporated in 2018. The company is booming and favouring the younger Companies Act, 2013.
generation to work. The Capital Structure of the company is as follows:
However, the Company Secretary advised the Board that Vaibhav Pvt.
Particulars INR (Crore)
Limited cannot be classified as a small company.
Authorised Share Capital
In light of the above facts, examine the correctness of the advice given
1,00,00,000 Equity Shares of ` 10 each 10
by the Company Secretary with reference to the relevant provisions of
Issued, Subscribed and Paid-up Share Capital
the Companies Act, 2013.
50,00,000 Equity Shares of ` 10 each 5

11 SEPTEMBER 2025 EXAMINATION

12 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

The Limited Liability Partnership Act, 2008

17. Ravi and Neha, two entrepreneurs, plan to start a new Limited Liability SUGGESTED ANSWERS
Partnership (LLP) focused on AI-based software development. They
decide to name their LLP as “NextGen AI Innovations LLP.” Before Multiple Choice Questions
proceeding with the incorporation, they want to ensure that their chosen MCQ No. Most Appropriate Answer
name is available and reserved. They apply to the Registrar through the
1. (d)
prescribed web-based platform and pay the required fee for name
reservation. 2. (c)

Describe the legal requirements as to the reservation of a name as per 3. (b)

relevant provisions under the Limited Liability Partnership Act, 2008. 4. (b)
The General Clauses Act, 1897 5. (a)
18. “No person shall be prosecuted and punished for the same offence more 6. (b)
than once." Explain in the light of provisions of the General Clauses Act,
7. (c)
1897.
8. (c)
Interpretation of Statutes
9. (d)
19. What is meant by beneficial construction in statutory interpretation?
Under what circumstances the rule of beneficial construction is 10. (b)
generally applied? Descriptive Questions
The Foreign Exchange Management Act, 1999 11. As per second proviso to section 76(1) of the Companies Act, 2013,
every company which accepts secured deposits from the public shall
20. Ms. Pearl was an Indian citizen who got a job in a software company in
within 30 days of such acceptance, create a charge on its assets. The
USA. She went to USA and stayed there for 15 years. During her stay, she
amount of charge shall not be less than the amount of deposits
purchased a house in USA for her residence. Then due to some personal accepted. The charge shall be created in favour of the deposit holders in
issues she moved back to India and joined a software company in India. accordance with the prescribed rules.
As she had moved back to India, she let out her house in USA and
In respect of creation of security, Rule 6 of the Companies (Acceptance
deposited the obtained rent in her account in USA. of Deposit) Rule, 2014, states that the company accepting secured
Advise whether Ms. Pearl can purchase another house in USA from her deposits shall create security by way of charge on its tangible assets
only.
account in USA? Give you answer referring to the provisions of the
Foreign Exchange Management Act, 1999. The other notable points are:
x The company cannot create charge on intangible assets (i.e.
goodwill, trade-marks, etc.).

13 SEPTEMBER 2025 EXAMINATION

14 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

x Total value of security should not be less than the amount of In the given question, the quorum for the given company having 3500
deposits accepted and interest payable thereon. members shall be 15 members personally present.
In the given question, (i) Where quorum is not present in the adjourned meeting (i.e. 20th
Particulars Amount (in `) June, 2025) also within half an hour, then the two members
present shall form the quorum. In this case, the meeting held with
Total value of security (value 110+30+20 [Land and Building, Plant
2 members shall be deemed to be validly held and the business
of assets on which charge can & machinery and Factory Shed]
transacted thereat shall also be deemed to be validly done.
be created) = 160 crore
(ii) The meeting held on 13th June, 2025 had 16 members present.
Total deposits accepted and 160+ [(160*12%)*3 years]
Hence, the quorum was present. However, the meeting was
interest payable thereon = 217.6 crore adjourned due to unruly behaviour of some members and not for
Since, the total value of security is less than the amount of deposits want of quorum. In the meeting held on 20th June, 2025, only 3
accepted and interest payable thereon, hence the charge is not validly members in person were present. In such a case, these 3 members
created. shall not constitute the quorum and hence, shall stand further
adjourned.
12. According to section 103 of the Companies Act, 2013, in case of a public
company, unless the articles of the company provide for a larger 13. According to second proviso to section 123, where in any year there are
number, if the number of members is more than 1000 but upto 5000, no adequate profits for declaring dividend, the company may declare
then the quorum shall be 15 members personally present. dividend out of the accumulated profits earned by it in previous years
If the quorum is not present within half-an-hour from the time and transferred by it to the free reserves only in accordance with the
appointed for holding a meeting of the company: procedure laid down in Rule 3 of the Companies (Declaration and
Payment of Dividend) Rules, 2014.
(a) the meeting shall stand adjourned to the same day in the next
week at the same time and place, or to such other date and such Free Reserves means such reserves which, as per the latest audited
other time and place as the Board may determine; or balance sheet of a company, are available for distribution as dividend.
(b) the meeting, if called by requisitionists under section 100, shall Under Rule 3 such declaration shall be subject to the following
stand cancelled: conditions:
Provided that in case of an adjourned meeting or of a change of day, CONDITION I
time or place of meeting under clause (a), the company shall give not
less than three days’ notice to the members either individually or by The rate of dividend declared shall not exceed the average of the rates
publishing an advertisement in the newspapers (one in English and one at which dividend was declared by the company in the immediately
in vernacular language) which is in circulation at the place where the preceding three years.
registered office of the company is situated.
However, this condition shall not apply if the company has not declared
Quorum not present at the adjourned meeting also: Where quorum is any dividend in each of the three preceding financial year.
not present in the adjourned meeting also within half an hour, then the
members present shall form the quorum.

15 SEPTEMBER 2025 EXAMINATION

16 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

CONDITION II
10% of (C) 85 lakh
The total amount to be drawn from such accumulated profits shall not Amount to be withdrawn
exceed 10% of its paid-up share capital and free reserves as appearing accumulated profits i.e. 34 lakhs
in the latest audited financial statement. is less than (C)
CONDITION III III The company has since made Met
profit in the financial year in
The amount so drawn shall first be utilised to set off the losses incurred
which dividend is declared.
in the financial year in which dividend is declared and only thereafter,
any dividend in respect of equity shares shall be declared. IV Free Reserves (D) 170 lakh Met
Amount drawn for payment of 34 lakh
CONDITION IV dividend (E)
The balance of reserves after such withdrawal shall not fall below 15% of Balance of reserves after such 136 lakh
its paid- up share capital as appearing in the latest audited financial withdrawal (F) =(D)- (E)
statement. 15% of its paid up share capital 102 lakh
In the given question, since Stridewalk Limited current year profits of (G)
` 16 lakh are insufficient to meet the dividend requirement of ` 50 lakh, (F) more than (G)
hence the company has to fulfil the conditions as prescribed under Rule
In the given question, since all the conditions are met, hence Stridewalk
3 (mentioned above).
Limited has validly declared dividend.
Particulars Amount (in `) 14. Voluntary Revision of Financial Statements or Board’s Report on the
Amount of dividend declared (A) 50 lakh Approval of the Tribunal
Current year profits (B) 16 lakh As per section 131 of the Companies Act, 2013, if it appears to the
Amount to be withdrawn accumulated profits [(A)- (B)] 34 lakh directors of a company that:
Accumulated profits during the past 8 years 170 lakh a. the financial statement of the company does not comply with the
paid up share capital of the company 680 lakh provisions of section 129; or
b. the report of the Board does not comply with the provisions of
Fulfilment of Conditions mentioned in Rule 3
section 134
Conditions Calculation Met/
they may prepare revised financial statement or board’s report in
Not Met
respect of any of the 3 preceding financial years after obtaining the
I This condition is not applicable the company has - approval of the Tribunal on an application made by the company within
not declared any dividend in each of the three fourteen days of the decision taken by the Board.
preceding financial year.
A certified copy of the order of the Tribunal shall be filed with the
II Paid-up share capital and free 680+ 170 Met
Registrar of Companies within 30 days of the date of receipt of the
reserves
certified copy.
= 850 lakh (C)

17 SEPTEMBER 2025 EXAMINATION

18 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

In the given question, Mr. Shyam has advised the Board of New Sales class of directors and employees was within the prescribed limit of
Pvt. Limited to revise the financial statements for the year 2021-22. The 50% (in case of startup company). Resolution containing 15 lakh
Board of Directors can do so as the said financial statements are sweat equity shares was also within the limit of 25 lakh sweat
pertaining to not later than three preceding financial years (from 2024- equity shares (i.e.,50% of paid-up capital) with the details as to the
2025) and by obtaining the approval of the Tribunal within fourteen days current market price and with the consideration to be issued.
of the decision taken by the Board.
(ii) No, as per law, lock-in period will be of three years from the date
15. Issue of Sweat Equity Shares: As per section 53, a company shall not of allotment. Here, it states five years which is against the law.
issue shares at a discount, except as provided in section 54.
16. As per section 2(85) of the Companies Act, 2013, Small company means
Section 54 of the Companies Act, 2013 states that sweat equity shares a company, other than a public company, —
are issued to keep the employees of a company motivated by making
them partner in the growth of the company. (i) paid-up share capital of which does not exceed four crore rupees,
and
Section 54 mentions the provisions which need to be adhered to by a
company if it desires to issue sweat equity shares. (ii) turnover of which as per profit and loss account for the
immediately preceding financial year does not exceed forty crore
Conditions: According to section 54(1), a company may issue sweat rupees:
equity shares of a class of shares already issued, if the following
conditions are fulfilled, namely— Provided that nothing in this clause shall apply to—

(a) the issue is authorised by a special resolution passed by the (A) a holding company or a subsidiary company;
company; (B) a company registered under section 8; or
(b) the resolution specifies the number of shares, the current market (C) a company or body corporate governed by any special Act.
price, consideration, if any, and the class or classes of directors or
In the instant case, as per the last profit and loss account for the year
employees to whom such equity shares are to be issued.
ending 31st March, 2025 of Vaibhav Pvt. Limited, its turnover was to the
Limit on issue of Sweat Equity Shares: According to proviso to Rule 8 extent of ` 1.80 crore, and paid-up share capital was ` 80 lakh. Though
(4) of the Companies (Share Capital & Debentures) Rules 2014, w.r.t a Vaibhav Pvt. Limited, as per the turnover and paid-up share capital
start-up company, it may issue sweat equity shares not exceeding fifty norms, qualifies for the status of a ‘small company’ but it cannot be
percent of its paid-up capital up to ten years from the date of its categorized as a ‘small company’ because it is the subsidiary of another
incorporation or registration. company (Shubham Limited).
Lock-in Period: Rule 8(5) of the Companies (Share Capital & Hence, the advice of the Company Secretary is correct.
Debentures) Rules 2014, states that the sweat equity shares issued to
17. Under section 16 of the Limited Liability Partnership (LLP) Act, 2008, a
directors or employees shall be locked in/non-transferable for a period
person may apply to the Registrar for the reservation of a name in either
of three years from the date of allotment.
of the following circumstances:
Accordingly, in the given instance,
(a) As the name of a proposed LLP, or
(i) Size of issue of sweat equity shares was appropriate, as the
(b) As the name to which an existing LLP proposes to change its name.
decision of the company to issue 30% sweat equity shares to a

19 SEPTEMBER 2025 EXAMINATION

20 SEPTEMBER 2025 EXAMINATION
REVISION TEST PAPER REVISION TEST PAPER
RTP SEP-25
CORPORATE AND OTHER LAWS INTERMEDIATE EXAMINATION

The application must be made in the prescribed form and manner along the past. In such cases it is permissible to give an extended meaning to
with the prescribed fee. words or clauses in enactments. But this can only be done when two
Upon receiving such an application, the Registrar may, if satisfied that constructions are reasonably possible and not when the words in a
the name is not one liable to be rejected under section 15(2) of the LLP statute are quite unequivocal or clear. Thus, if the language of the
Act, reserve the name for a period of three months from the date of statute is clear and unambiguous, the courts must follow the plain
intimation by the Registrar. meaning and cannot stretch the language beyond its natural meaning.

As per section 15(2), no LLP shall be registered by a name which, in the 20. According to section 6(4) of the Foreign Exchange Management Act,
opinion of the Central Government is— 1999, (the Act) a person resident in India may hold, own, transfer or
invest in foreign currency, foreign security or any immovable property
(a) undesirable; or
situated outside India if such currency, security or property was
(b) identical or too nearly resembles to that of any other LLP or a acquired, held or owned by such person when he was resident outside
company or a registered trademark of any other person under the India or inherited from a person who was resident outside India.
Trade Marks Act, 1999.
As per the fact, Ms. Pearl during her stayed in USA purchased a house in
18. Provision as to offence punishable under two or more enactments USA.
As per section 26 of the General Clauses Act, 1897, where an act or As per the above provision and facts of the case, Ms. Pearl can purchase
omission constitutes an offence under two or more enactments, then the the new house in USA from her USA account.
offender shall be liable to be prosecuted and punished under either or
any of those enactments, but shall not be punished twice for the same
offence.
Article 20(2) of the Constitution of India states that no person shall be
prosecuted and punished for the same offence more than once.
Provisions of section 26 of the General Clauses Act, 1897 read with
Article 20(2) of the Constitution of India apply only when the two
offences which form the subject of prosecution is the same, i.e., the
ingredients which constitute the two offences are the same. If the
offences under the two enactments are distinct and not identical, none
of these provisions will apply.
19. Beneficial construction is not a strict rule of interpretation but rather a
method used to interpret a statute liberally in order to give effect to the
declared intention of the legislature, particularly when the statute is
enacted to benefit a specific class of people.
Beneficial construction will be applied to a statute, which brings into
effect provisions for improving the conditions of certain classes of
people who are under privileged or who have not been treated fairly in

21 SEPTEMBER 2025 EXAMINATION

22 SEPTEMBER 2025 EXAMINATION