Company law 1) Who are the directors of a company? How are they appointed? 2) Explain the rules regarding the number of directors and directorships. 3) Discuss the legal position of directors. 4) What restrictions have been imposed by the Companies Act in respect of appointment of directors? 5)Explain the qualifications and disqualification for the office of a director. 6) What is meant by qualification shares? Is it necessary to be a shareholder or to acquire qualification shares before acting as a director? 7) What are the circumstances when the office of a director shall become vacant'? 8) How can a director be removed from office before the expiry of their term of office? 9) Discuss the powers and duties of directors. 10) Explain the liability of directors towards the company and third parties. Can a director be held liable for criminal liability? 11) Write an explanatory note on meetings of directors. 12) Explain the procedure of allotment of shares. 13) What is an irregular allotment? What are its consequences? 14) What is meant by return of allotment? 15) Under what circumstances can a company issue shares at a discount? 16) When shares can be issued at a premium? For what purposes the premium amount can be utilised? 17) What is a shareccrtificate? When must it be issued? Can a company issue a duplicate share certificate, if so when? 18) What is share warrant? Distinguish between a share certificate and a share warrant. 19) What is meant by 'call'? What are the requisites of a valid cell? 20) Explain the procedure of forfeitingthe shares. What is theeffect of forfeiture'? How forfeiture is different from surrender of shares? 21 "Company is an artificial person created by law with a perpetual succession and is different from the personality of the member constituting it'. Comment. 22 Discuss the concept of corporate veil. Under what circumstances can this veil be lifted?
COMPANY CASES SOLVED/UNSOLVED 1.Reliance Limited wants to provide financial assistance to its employees, to enable them to subscribe for certain number of fully paid shares. Considering the provision of the Companies Act, 1956, what advice would you give to the reliance company in this regard? 2. Punj llyod company limited has only seven shareholders, all the shares being fully paidup. All the shares of one such shareholder are sold by the court in an auction and purchased by another shareholder. The company continues to carry on business thereafter. Discuss the liabilities of the shareholders of the company under the Companies Act, 1956. 3. Amir khan applies for share on the basis of a prospectus which contains mis statement. The shares are allotted to him, who afterwards transfers them to amitabh . Can amitabh bring an action for a rescission on the ground of mis-statement? Decide under the provisions of the Companies Act, 1956. 4. The Memorandum of Association of a company was presented to the Registrar of Companies for registration and the Registrar issued the certificate of incorporation. After complying with all the legal formalities a company started a business according to the object clause, which was clearly an illegal business. The company contends that the nature of the business cannot be gone into as thecertificate of incorporation is conclusive. Answer the question whether Coal India ltd contention is correct or not. 5. Start tv was started with the object of building A mall with shops. The building was destroyed by fire and the company wanted to alter the objects clause in the memorandum by substituting the words A mall with shops with the words Shops, Residential buildings and Warehouses for letting purposes. Will this alteration of the memorandum for the purpose be permissible? Decide referring to the provisions of the companies Act, 1956. 6. Jai corp ltd, who is a resident of New Delhi, sent a transfer deed, for registration of transfer of shares to the company at the address of its Registered Office in Mumbai. He did not receive the shares certificates even after the expiry of four months from the date of dispatch of transfer deed. He lodged a criminal complaint in the Court at New Delhi. Decide, under the provisions of the Companies Act, 1956, whether the Court at New Delhi is competent to take action in the said matter?
ICSI BUSINESS LAW Question Bank part 1 1.(a) State, with reasons in brief, whether the following statements are correct or incorrect. (i) A company cannot sue and be sued in its own name. (ii) A bill which is drawn and accepted without consideration is called accommodation bill (iii) A person who does not invest or participate in the management of the firm but only gives his name to the firm, is called a nominal partner. (iv) Consideration is not necessary in a contract of agency. (v) A contract of sale for future goods is a valid contract. (vi) The liability of the surety is coextensive with that of the principal debtor. (b) Attempt any two of the following : (i) "Sharing of profit is not the conclusive test of partnership." Comment. (ii) Ajit is indebted to Balram for Rs.5 lakh. Ajit sells his property to Chinky for Rs.6 lakh. Chinky, the purchaser of Ajits property, promises to pay off the debt to Balram. Later, Chinky fails to pay the debt amount to Balram. Can Balram sue Chinky for the debt amount of Rs.5 lakh ? Give reasons. (iii)Manjeet, a minor falsely represented himself to Nakul that he was a major and requested to lend him Rs.10,000. Nakul believed and acted upon Manjeets statement and lent him Rs.10,000. Later, Manjeet failed to repay the loan amount to Nakul who filed a suit against Manjeet in the court of law. Manjeet pleads his minority. Decide giving reasons 2. (a) State, with reasons in brief, whether the following statements are true or false: (i) A contract for the sale of future goods is always known as an agreement to sell. (ii) A partner can be expelled from a firm only with the consent of all the partners. (iii) A private company is required to file a statement in lieu of prospectus with the Registrar of Companies before allotting its shares. (iv) Revocation of offer does not take effect until it is actually communicated to the offere. (v) A promissory note is a threeparty instrument. (b) Write notes on any two of the following : (i) Subagent (ii) Statutory meeting (iii) Auction sales (iv) Forged endorsement 3. (a) State, with reasons in brief, whether the following statements are correct or incorrect. Attempt any six : (i) Besides minors and persons of unsound mind, there are others too who are disqualified from contracting by law. (ii) A contract to contract is not a contract (iii) A continuing guarantee can be revoked as to the past transaction by giving notice to the creditor . . (iv) An auctioneer can refuse to accept the highest bid. (v) A preference shareholder does not have a right to vote on every resolution of the company. (vi) The liability of a sleeping partner is limited. (vii) Order instrument can be negotiated by delivery only. (viii) A firm cannot be appointed as a director of a company. (b) Write short notes on any two of the following : (i) Certificate of incorporation (ii) Anticipatory breach of contract (iii) Irrevocable agency 4. (a) State, with reasons in brief, whether the following statements are correct or incorrect (i) A specific guarantee once given is irrevocable. (ii) Future goods can be the subject matter of a sale. (iii) Sharing of losses is an essential element of the existence of partnership. (iv) Cheques are always payable on demand. (v) A company is an incorporated individual having a separate legal entity. (b) Attempt any two of the following : (i) No seller can give to the buyer a better title to the goods than what he himself has. Comment. (ii) Explain the legal position of a minor under the Indian Contract Act, 1872 for necessaries supplied to him. iii) Anubhav, an author, enters into a contract with Balwant, a publisher, for writing a book for him. But, subsequently Anubhav refuses to write the book for Balwant. Now, Balwant files a suit against Anubhav for specific performance of the contract. Will Balwant succeed ? Give reasons. (iv) Amit promises to procure an employment for Bimal in a government department and Bimal promises to pay Rs.5,000 to Amit for the same. Amit gets the said job for Bimal. However, Bimal refuses to pay the promised money to Amit who files a suit in the court of law to recover Rs.5,000 from Bimal. Will Amit succeed ? Give reasons 5.(a) State, with reasons in brief, whether the following statements are correct or incorrect. (i) Specific offer can be accepted by any member of the general public. (ii) Drawer of a dishonoured cheque due to insufficiency of funds is liable to imprisonment for a maximum period of one year. (iii) In the case of an agreement to sell, ownership in the goods passes from seller to the buyer immediately. (iv) The partnership firm has no legal existence apart from its partners (v) A company cannot sue a third party in its own name. . (vi) Any promise made for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. (b) Write notes on any two of the following : (i) Continuing guarantee (ii) Association not for profit (iii) Contingent goods. 6. (a) State, with reasons in brief, whether the following statements are correct or incorrect. (i) Consideration may move from the promisee or any other person. (ii) Goods in return of goods is an acceptable mode of sale of goods. (iii) Not negotiable crossing means the cheque cannot be further transferred. (iv) A shareholder of a private company can easily transfer his shares to anyon (v) A partner can retire in accordance with the partnership deed. (vi) A surety must be an adult person. (b) Attempt any four of the following : (i) Customs and trade usages (ii) Inchoate or incomplete instrument. (iii) Exceptions to the doctrine of caveat emptor. (iv) Statutory duties of a Company Secretary.
ICSI BUSINESS LAW PART 2 1. (a) Distinguish between sale and hirepurchase agreement. (b) "Once an instrument passes through the hands of a holder in due course, it is purged of all defects." Explain. (c) Write a note on contract over the telephone 2. (a) Distinguish between dissolution of partnership and dissolution of partnership firm (b) Under what circumstances can an aggrieved party institute a suit for injunction and for specific performance of a contract? Explain with examples. (c) Ajeet, owner of an apple orchard, believes that all the apple trees in his orchard are fruitbearing trees. However, he has no sufficient ground for his belief. Even then, Ajeet states to Baljeet that his orchard has all fruitbearing trees. Induced by this statement, Baljeet purchases the orchard. Later on, it is found that only 50% trees are fruitbearing. Now, Baljeet files a suit for the repudiation of the contract. Will Baljeet succeed ? Give reasons. 3. (a) Distinguish between any two of the following (i) Condition and warranty. (ii) Partnership and Hindu Undivided Family (iii) Private company and public company. 4. (a) Distinguish between sale and an agreement to sell under the Sale of Goods Act, 1930. (b) Discuss briefly whether an agreement by way of wager is a voidable contract. (c) Define negotiable instrument. Distinguish between a bill of exchange and cheque. 5. Distinguish between void contract and voidable contract. 6. Distinguish between shareholders and members of a company 7.Distinguish between functional form of departmentation and product form of departmentation. Describe with the help of diagrams and illustrations 8. Distinguish between negotiation and assignment
