CA INTER CORPORATE AND OTHER LAWS – JAN 2026 

Total No. of questions: 6

Maximum Marks – 70

GENERAL INSTRUCTIONS TO CANDIDATES

1. The question paper comprises two parts, Part I and Part II.

2. Part I comprises Multiple Choice Questions (MCQs).

3. Part II comprises questions which require descriptive answers.

4. Ensure that you receive the question paper relating to both the parts. If you have not received both, bring it to the notice of the invigilator.

5. Answers to MCQs in Part I are to be marked on the OMR answer sheet as given on the cover page of descriptive answer book only. Answers to questions in Part II are to be written in the same descriptive answer book. Answers to MCQs, if written inside the descriptive answer book will not be evaluated.

6. OMR answer sheet given on the cover page of descriptive answer book will be in English only for all candidates, including for Hindi medium candidates.

7. The bar coded sticker provided in the attendance register, is to be affixed only on the descriptive answer book.

8. You will be allowed to leave the examination hall only after the conclusion of the exam. If you have completed the paper before time, remain in your seat till the conclusion of the exam.

9. Duration of the examination is 3 hours. You will be required to submit the descriptive answer book with OMR cover page to the invigilator before leaving the exam hall, after the conclusion of the exam.

10. The invigilator will give you acknowledgement on Page 2 of the admit card, upon receipt of the descriptive answer book.

11. Candidate found copying or receiving or giving any help or defying instructions of the invigilators or having / using mobile phone or smart watch or any other electronic gadget will be expelled from the examination and will also be liable for further punitive action.

PART-II

Question paper comprises 6 questions. Answer Question No. 1 which is compulsory and any 4 out of the remaining 5 questions.

Working notes should form part of the answer.

Answers to the questions are to be given only in English except in the case of candidates who have opted for Hindi Medium. If a candidate has not opted for Hindi Medium, his/her answers in Hindi will not be evaluated.

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Q1) (a) ABC Ltd., a listed company in the Indian manufacturing sector, has concluded its financial year ended 31st March 2025. The company is now considering declaring a final dividend of 3 per equity share, with a face value of 10 per share. Before proceeding, the Board of Directors seeks to ensure that the proposed dividend complies with all relevant provisions of the Companies Act, 2013, particularly those related to the permissible sources and conditions for dividend distribution. The summarized financial position of the company for FY 2024-25 is as follows:

• Revenue from operations amounts to 10,000 lakhs, and Other income contributes an additional 1,000 lakhs, bringing the total income to 11,000 lakhs.
• The company has incurred expenses (excluding depreciation) of 8,000 lakhs, and Provided for depreciation of 1,200 lakhs, as per Schedule II of the Companies Act.
• The resulting profit before tax (PBT) stands at 1,800 lakhs, with a tax provision of 450 lakhs, leading to a net profit after tax (PAT) of 1,350 lakhs.
• In addition to current year earnings, ABC Ltd. has accumulated retained earnings of 2,000 lakhs from previous financial years and holds free reserves (excluding any revaluation reserves) of 500 lakhs.
• The company has 100 lakh equity shares and the total proposed dividend pay- out amounts to₹300 lakhs (i.e., 3 per share).

Based on the above information, analyse whether ABC Ltd. is eligible to declare dividends under the following scenarios in compliance with the Companies Act, 2013:

(1) Out of the current year’s profits.

(2) Out of the accumulated profits of previous years only.

Support your answer with appropriate provisions and calculations under the Companies Act, 2013.  (5)

(b) MNP Tech Ltd., a fast-growing start-up in Bangalore, recently issued 5 equity shares at a premium of 200 per share, raising a Securities Premium balance of 10 crore. The CFO proposes the following uses of the Securities Premium Account to manage the company’s financial commitments and investor expectations:

(1) To write off advertisement expenses of 50 lakhs incurred during the product launch.

(2) To issue fully paid bonus shares worth 2 crore to the existing shareholders, as a gesture of goodwill.

(3) To provide 1.5 crore for the premium payable on redemption of preference shares.

(4) To distribute 1 crore as interim dividend since the company has not yet earned adequate profits.

As a legal advisor to the company, examine the validity of each proposed use with reference to the Companies Act, 2013. (5)

(c) (i) Skynex Ltd., incorporated in India in 2024, is engaged in the 2×2 manufacture of lithium batteries for two-wheeler. The company markets its products domestically and exports to Mexico. During the financial year 2025, the company engaged in the following transaction: (4)

• Commission paid to the agent in Mexico for the sale of the company’s commercial plot in India to the tune of USD 50,000 against the inward remittance of USD 9,50,000 from Exchange Earners Foreign Currency (EEFC) Account. Examine whether the above transaction is exempt from the approval of the RBI, with reference to the relevant provisions of FEMA, 1999.

(ii) Bob, a Director at Skynex Ltd., along with his wife, major son, and father, purchased a property in Mexico, holding equal shares in the property. They collectively remitted USD 1,000,000 during the financial year. Bob confirmed that all family members complied with the applicable terms and conditions, and the amount sent is within the limit prescribed for remitting funds to Mexico.

Examine whether Bob and his family members can remit USD 1,000,000 to Mexico in a single financial year without requiring any approval.

Q2) (a) Amrit Praksh Ltd. was incorporated in 1996 and its registered office is in Dehradun. For expanding the business in manufacturing Mobile equipment (including its Spare Parts) to mobile accessories also, it required capital and for this the Company issued 10,00,000 equity shares of 10 each at par to the public by issuing a prospectus. The prospectus discloses the minimum subscription amount of 50,00,000 required to be received on application of shares and share application money shall be payable at 5 per share. The prospectus further reveals that Amrit Praksh Ltd. has applied for listing of shares in recognized stock exchanges of which application has been rejected. The issue was fully subscribed and Amrit Praksh Ltd. received an amount of 50,00,000 on share application. Amrit Praksh Ltd., then proceeded for allotment of shares. Examine the disclosures in the above case study which are the deciding factors in an allotment of shares and the consequences for violation, if any under the provisions of the Companies Act, 2013. (5)

(b) PRT Ltd. is an eligible public company. The following details are available from its audited balance sheet as on 31st March 2024:

• Paid-up Share Capital: Rs. 20 crore
• Free Reserves: Rs. 8 crore
• Securities Premium Account: Rs. 2 crore
• Existing deposits from members: Rs. 2 crore
• Existing deposits from public (excluding members): Rs. 5 crore

The company now proposes to accept further deposits during the year 2024-25:

(1) 3 crore from its members; and

(2) 2 crore from persons other than members (general public).

You are required to examine, with reference to the relevant provisions of the Companies Act, 2013, whether the above proposal is valid. If not, calculate the maximum permissible deposits in each category. (5)

(c) ABC Ltd. is in the business of manufacturing life-saving drugs. The 4 company has its plant in Kerala. The turnover for the last financial year crossed 52 crore. During the first quarter of the current financial year (2024-2025), the company’s turnover has already reached 50 crore. ABC Ltd. is expecting its turnover to reach 200 crore for the financial year 2024-25. The company held its Board meeting on August 1, 2024, and decided to appoint a cost auditor for the financial year 2024-25.

(1) According to the General Clauses Act, 1897, by what date must ABC Ltd. file the cost auditor appointment, and how is this timeline calculated?

(2) ABC Limited’s failure to appoint a cost auditor, where it is statutorily required, constitutes an offence under Section 148 of the Companies Act, 2013. What is meant by “offence” under the General Clauses Act, 1897? (4)

Q3 (a) A group of five professionals decided to start a private limited company 1 $1+2$ in the anti-drone solutions sector under the name Ddrone Pvt. Ltd. $in^{+2=5}$ April 2025. The company wants to have its registered office in Mumbai.

On April 2, 2025, it applied for name reservation through RUN (Reserve Unique Name) and received approval on April 6, 2025. On May 15, 2025, due to a delay in documentation, the SPICe+ (Simplified Proforma for Incorporating Company Electronically) Plus (INC-32) form for incorporation was filed after 39 days from the date of name reservation.

The company proposed two directors, one Indian resident, one foreign national residing in the U.S. The foreign director did not have a DIN, and his passport was notarized but not apostiled. The company’s registered office address was not finalized at the time of filing INC-32.

Memorandum of Association and Articles of Association (MoA and AoA) were signed electronically, but one subscriber used a digital signature of a third party (his consultant), with verbal consent.

Based on the above facts and applicable provisions of the Companies Act, 2013, answer the following questions:

(i) Was the name Ddrone Pvt. Ltd. still valid when INC-32 was filed on May 15, 2025 ?

(ii) Is it mandatory to provide the company’s registered office address at the time of incorporation? What is the time limit to furnish it otherwise ?

(iii) What are the consequences if the company fails to file the declaration for commencement of business within the prescribed time, and fails to carry on any business  operations?  (5)

(b) LMN Ltd. created a charge on one of its plant and machinery in favour of 5 a financial institution. The company secretary was on leave when the charge was created. To avoid delay, an accounts officer of the company entered the particulars of the charge in the Register of Charges without any authorisation of the Board. Later, a dispute arose between two creditors regarding priority of charges. One creditor challenged the validity of the Register entries, claiming that the entries were unauthorised and not duly authenticated as per law. Based on the Companies (Registration of Charges) Rules, 2014, examine whether the entry made in the Register of Charges, by the accounts officer is legally valid and what consequences may follow in case of non-authentication? (5)

(c) Write any four differences between The Rule of Beneficial Construction 4 and Rule of Exceptional Construction.  (4)

Q4) (a) The Board of Directors of XYZ Petrochemicals Limited consists of Mr. R 5 (Managing Director), Mr. N (Director), Mr. P (Director), Mr. A (Chairperson), Mr. D (Chief Financial Officer, not a director) and Mr. C (Company Secretary). The Board as a policy does not authorize the chairperson of the company to sign the financial statements. The Profit and Loss Account and Balance Sheet of the company were signed by Mr. N, Mr. P and Mr. A. Examine whether the authentication of financial statements of the company was in accordance with the provisions of the Companies Act, 2013. What would be your answer in case the company is a One Person Company (OPC) and has only one Director, who has authenticated the Balance Sheet and Statement of Profit & Loss and the Board’s Report ?  (5)

(b) ABC LLP is engaged in the business of providing software consulting 5 services. Due to an economic slowdown, the LLP is unable to meet its obligations towards some creditors. The management of ABC LLP proposes a compromise arrangement with its creditors to restructure its outstanding debts by extending repayment periods and waiving a portion of interest. The LLP files an application before the National Company Law Tribunal (NCLT), seeking directions to convene a meeting of its creditors. At the meeting, creditors representing 80% of the total value of debts agree to the proposed arrangement. The Tribunal, after ensuring that all material facts including the LLP’s latest financial statements and the disclosure of pending tax investigations have been presented, sanctions the compromise. However, ABC LLP fails to file the Tribunal’s order with the Registrar within the prescribed period. Examine the validity of compromise or arrangement approved by the creditors and sanctioned by the Tribunal with reference to the Limited Liability Partnership Act, 2008. Also explain the effect of failure by ABC LLP to file the Tribunal’s order to the Registrar. (5) 

(c) Statutory interpretation becomes essential when the language of a statute is unclear or leads to ambiguity. Discuss the circumstances under which the interpretation, of statutes is applied. (4)

Q5) (a) Zen Tech Ltd., a company incorporated in Singapore, has a branch office 5 in Bengaluru, India. The financial year of the company ends on 31st March 2025. As per the provisions of the Companies Act, 2013, Zen Tech Ltd. is required to file certain documents with the Registrar of Companies (ROC) every year. However, due to internal audit delays in its Singapore headquarters, the company could not finalize its financial statements by the end of September 2025. The management seeks clarification on the following points:

(1) What documents need to be filed by Zen Tech Ltd. along with its financial statements, with the Registrar ?

(2) By what time should these documents normally be filed ?

Examine it as per the provisions of the Companies (Registration of Foreign Companies) Rules, 2014.  (5)

(b) Amit and Priya are partners in XYZ LLP, a consulting firm. Recently, 5 Priya moved to a new address but forgot to notify the LLP within the required period. A month later, Amit’s cousin, Ramesh, expressed interest in joining XYZ LLP as a partner, and after a few discussions, he was accepted as a new partner. However, XYZ LLP did not immediately update the Registrar of Companies (ROC) regarding Priya’s address change or Ramesh’s admission as a partner. After 45 days of joining Mr. Ramesh, the LLP filed a notice with the ROC about these changes. Advise the LLP about the default on part of LLP about the non-compliance in respect to not informing the ROC about :

(i) Whether Ms. Priya contravene any provision regarding address change?

(ii) Default on non-compliance in Mr. Ramesh’s admission as a partner.   (5)

(c) Under an enactment, an excise duty of ₹10 is levied on every 100 litres of a certain chemical produced in a factory. During inspection, it was found that Factory A had produced 350 litres of that chemical but had paid duty only for 300 litres, arguing that the Act only specifies duty per 100 litres and does not mention fractional quantities. With reference to the General Clauses Act, 1897, determine whether the factory is liable to pay excise duty on the remaining 50 litres. Support your answer with reasoning. (4)

Q6) (a) Monica solutions Private Limited is registered as a One Person Company (OPC) under the Companies Act, 2013. Mr Gautam Kumar is the sole member and director of the company. With the financial year ending on 31^st March 2025, the Company is preparing to comply with its annual filing and disclosure requirements. Gautam is uncertain, whether his company is required to hold an Annual General Meeting (AGM) or there are any other alternative procedures that his company and follow. As a financial advisor, please advise Mr Gautam Kumar on this matter. (3)

(ii) What is the difference between a motion and a resolution?  (2)

OR

(i) Saras Ventures Limited, a public Limited company, Inc. under the companies act, 2013, has a board comprising of seven directors. A group of shareholders holding 1.2% of the total booting power has expressed dissatisfaction with one of the directors, Mr. Ankur Chabra, and has proposed his removal under Section 169 of the companies act, 2013

The Company annual general meeting (AGM) is scheduled for 25 August 2025. On 1 August 2025, The Company received a special notice under section 115, proposing and ordinary resolution for the removal of Mr. Ankur Chabra at the upcoming AGM. However, The Company subsequently failed to notify its members of the special notice. With reference to the applicable provisions of the companies act, 2013, examine the validity of the special notice.   (3)

(ii) what are the consequences of failure to notify the members about the special notice? (2)

(b) RMP Private Limited is an unlisted company having:

Paid-up share capital of ₹60 crore and Annual Turnover of ₹90crore

The Company is not required to prepare its financial statements as per the companies (Indian accounting standards) Rules, 2015.

The company filed its financial statements for the financial year 2024-25 in Form AOC-4 (normal form) instead of Form AOC-4 XBRL

State the classes of companies required to file financial statements and documents in XBRL format under Section 137 of the Companies Act, 2013 and examine whether RMP Private Ltd. has complied with the applicable legal provisions.     (5)

(c) Examine the given situations in the light of the FEMA, 1999:

(1) Bhargav Ltd. Had total foreign exchange earnings of USD 12,000,000 in the last three financial years. What is the maximum amount the company can donate without RBI approval?

(2) Preeto Ltd. wants to make remittances of 6% of investment brought into India. Does it need RBI approval?   (4)