Preliminary
1.1 - Definitions
Q.1 X Industries Ltd. is a company in which 25% of shareholding is held by Central Government; 10% shareholding is held by Government of Maharashtra and 15% shareholding is held by Central Government and Government of Rajasthan jointly. Examine whether, X Industries Ltd. is a government company.
Ans.: Government Company:
Q.2 The statutory auditors of a company were required to issue a certificate on the net worth of the company as per the requirement of the management as of 30 September 202 4 computed as per the provision of section 2(57) of the Companies Act, 2013.
The company had fair valued its property, plant and equipment in the current year which was mistakenly taken into retained earnings of the company in its books of account. Please advise whether this fair valuation would be covered in the net worth of the company as per the legal requirements.
Ans.: Computation of Net Worth:
Conclusion:
Q.3 Flora Fauna Limited was registered as a Public Company. There are 230 members in the company as noted below:
(Shares were allotted when they were employees)
The board of directors of the company propose to convert it into a private company. Also, advice whether reduction in the number of members is necessary.
Ans.: Conversion from public company to private company:
Q.4 A Pvt. Ltd. is wholly owned subsidiary of AB Ltd., a public company incorporated under the Companies Act, 2013. A Pvt. Ltd. wanted to avail exemptions as provided to private companies. Examine whether A Pvt. Ltd. can do so.
Ans.: Status of wholly owned private subsidiary company:
Chapter 1
Q.5 Examine the below mentioned situation and answer whether the entities are related parties for the purpose of Sec. 188:
(i) XYZ Pvt. Ltd. has two subsidiary companies, Y Pvt. Ltd. and Z Pvt. Ltd.
(ii) XYZ Ltd. a public company, has two subsidiary companies, Y Pvt. Ltd and Z Pvt. Ltd.
Ans.: Related Parties:
Q.6 The paid-up share capital of Saras Private Limited is ₹ 1 crore, consisting of 8 lacs Equity Shares of ₹ 10 each, fully paid -up and 2 lacs Cumulative Preference Shares of ₹ 10 each, fully paid -up. Jeevan (JVN) Private Limited and Sudhir Private Limited are holding 3 lacs Equity Shares and 50,000 Equity Shares respectively in Saras Private Limited. Jeevan Private Limited and Sudhir Private Limited are the subsidiaries of Piyush Private Limited. With reference to the provisions of the Companies Act, 2013 ex amine whether Saras Private Limited is a subsidiary of Piyush Private Limited? Would your answer be different if Piyush Private Limited has 8 out of 9 Directors on the Board of Saras Private Limited? [RTP-May 18, May 19]
Ans.: Status of Subsidiary company:
Q.7 MNP Private Ltd. is a company registered under the Companies Act, 2013 with a, Paid Up Share Capital of ₹ 2 crores and turnover of ₹ 60 crores. Explain the meaning of the “Small Company” and examine the following in accordance with the provisions of the Companies Act, 2013:
(i) Whether the MNP Private Ltd. can avail the status of small company?
(ii) What will be your answer if the turnover of the company is ₹ 30 crores?
[May 18 (6 Marks), MTP-Oct. 20]
Ans.: Determination of Status of Small Company:
Q.8 What does the term Financial Statements include in relation to a company under the Companies Act, 2013? Which companies need not prepare a cash flow statement? [Nov. 18 (4 Marks)]
Ans.: Financial Statements:
Companies Not requiring to prepare cash flow statement
Q.9 SKP Limited (Registered in India), a wholly owned subsidiary company of Herry Limited decided to follow different financial year for consolidation of its accounts outside India. State the procedure to be followed in this regard assuming that Herry Limited is a foreign company. [Nov. 19 (2 Marks)]
Ans.: Financial year in case of a foreign company
Q.10 The information extracted from the audited Financial Statement of Smart Solutions Private Limited as at 31st March, 202 4 is as below:
(1) Paid-up equity share capital ₹ 50,00,000 divided into 5,00,000 equity shares (carrying voting rights) of ₹ 10 each. There is no change in the paid -up share capital thereafter.
(2) The turnover is ₹ 2,00,00,000.
It is further understood that Nice Software Limited, which is a public limited company, is holding 2,00,000 equity shares, fully paid -up, of Smart Solutions Private Limited. Smart Solutions Private Limited has filed its Financial Statement for the said year with the Registrar of Companies (ROC) excluding the Cash Flow Statement within the prescribed time line during the financial year 202 425. The ROC has issued a notice to Smart Solutions Private Limited as it has failed to file the cash flow statement along with the Balance Sheet and Profit and Loss Account. You are to advise on the following points explaining the provisions of the Companies Act, 2013:
(i) Whether Smart Solutions Private Limited shall be deemed to be a small company whose significant equity shares are held by a public company?
(ii) Whether Smart Solutions Private Limited has defaulted in filing its financial statement? [July 21 (6 Marks); MTP-Oct. 23, March 24]
Ans.: Determination of Status of Small Company:
Conclusion
Default in filing the financial statements
Conclusion
Q.11 Johnson Limited goes for public issue of its shares. The issue was oversubscribed. A default was committed with respect to allotment of shares by the officers of the company. There were no Managing Director, Whole time Director or any other officer/person designated by the Board with the responsibility of complying with the provisions of the Act.
State, who are the persons considered as officers in default under the Companies Act, 2013. Examine who will be considered in default in the instant case ?
Ans.: Officer in Default:
[July 21 (5 Marks)]
Q.12 New Private Ltd. is a company registered under the Companies Act, 2013 with a paid -up share capital of ₹ 70 lakh and turnover of ₹ 42 crores. Explain the meaning of the “Small Company” and examine the following in accordance with the provisions of the Companies Act, 2013:
(i) Whether the New Private Ltd. can avail the status of small company?
(ii) What will be your answer if the turnover of the company is ₹ 30 crore and the capital is same as ₹ 70 lakh? [MTP-Oct. 21]
Ans.: Determination of Status of Small Company:
Q.13 Define “Small Company”. [Dec. 21 (2 Marks)]
Ans.: Small Company: Provided (i) (ii)
Q.14 Kapila Limited issued equity shares of ₹ 1,00,000 (10,000 shares of ₹ 10 each) on 01.04.202 4 which have been fully subscribed, whereby Kusha Limited holds 4000 shares and Prem Limited holds 2000 shares in Kapila Limited. Kapila Limited is also holding 20% equity shares of Red Limited before the date of issue of equity shares stated above. Red Limited controls the composition of Board of Directors of Kusha Limited and Prem Limited from 01.08.202 4.
Examine with relevant provisions of the Companies Act, 2013:
(i) Whether Kapila Limited is a subsidiary of Red Limited?
(ii) Whether Kapila Limited can hold shares of Red Limited? [MTP-March 22]
Ans.: Status of Subsidiary company:
Corporate & Other Laws (Law) | CRACKER
AUTHOR : PANKAJ GARG
PUBLISHER : TAXMANN
DATE OF PUBLICATION : FEBRUARY 2025
EDITION : 5TH EDITION
ISBN NO : 9789364551922
NO. OF PAGES : 648
BINDING TYPE : PAPERBACK
DESCRIPTION
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