CA Intermediate PAPER 2: CORPORATE AND OTHER LAWS Syllabus

PAPER 2: CORPORATE AND OTHER LAWS syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for PAPER 2: CORPORATE AND OTHER LAWS in CA Intermediate, not a summary of it.

1. 1

   Company Law and Limited Liability Partnership Law

   2 topics

   • The Companies Act, 2013
     • Incorporation of Company and Matters Incidental thereto
     • Prospectus and Allotment of Securities
     • Share Capital and Debentures
     • Acceptance of Deposits by Companies
     • Registration of Charges
     • Management and Administration
     • Declaration and Payment of Dividend
     • Accounts of Companies
     • Audit and Auditors
     • Companies Incorporated Outside India
   • The Limited Liability Partnership Act, 2008
     • Including important Rules
2. 2

   Other Laws

   3 topics

   • The General Clauses Act, 1897
     • Important Definitions
     • Extent and Applicability
     • General Rules of Construction
     • Powers and Functionaries
     • Provisions as to Orders, Rules, etc. made under Enactments and Miscellaneous provisions
   • Interpretation of Statutes
     • Rules of Interpretation of Statutes
     • Aids to Interpretation
     • Rules of Interpretation/Construction of Deeds and Documents
   • The Foreign Exchange Management Act, 1999
     • Significant definitions and concepts of Current and Capital Account Transactions

PAPER 2: CORPORATE AND OTHER LAWS flashcards for CA Intermediate

25 of 50 cards from the PAPER 2: CORPORATE AND OTHER LAWS deck — real questions with worked answers.

1. Under the Companies Act, 2013, what is the maximum number of members a private company can have (excluding past/present employee-members)?

   200 members. (One Person Company is a separate type with only one member.)

2. What is the minimum number of directors required for a public company, private company, and One Person Company (OPC) under the Companies Act, 2013?

   Public company: 3; Private company: 2; OPC: 1. Maximum directors for any company: 15 (more allowed by special resolution).

3. Define a 'small company' under Section 2(85) of the Companies Act, 2013 (current thresholds).

   A company (other than a public company) with paid-up capital not exceeding Rs. 4 crore and turnover not exceeding Rs. 40 crore as per last profit and loss account. Holding/subsidiary companies, Section 8 companies, and companies governed by special Acts are excluded.

4. What is a One Person Company (OPC) and who is eligible to incorporate one?

   A company with only one person as a member. Only a natural person who is an Indian citizen (resident or otherwise) can incorporate an OPC and be its nominee. A nominee must be named in the memorandum.

5. Distinguish between a 'company limited by shares' and a 'company limited by guarantee'.

   Limited by shares: members' liability is limited to the unpaid amount on shares held. Limited by guarantee: members' liability is limited to the amount each undertakes to contribute to assets in the event of winding up.

6. What is the doctrine of 'lifting/piercing the corporate veil'?

   Disregarding the separate legal personality of a company to hold members or directors personally liable, applied in cases such as fraud, improper conduct, tax evasion, or where the company is a sham/facade.

7. What is the difference between the Memorandum of Association (MOA) and Articles of Association (AOA)?

   MOA is the charter defining the company's scope/powers and its relation with outsiders; AOA contains internal rules/regulations for management. MOA is supreme; AOA is subordinate to the MOA and the Act.

8. State the doctrine of 'ultra vires' in company law.

   Acts done by a company beyond the powers conferred by its Memorandum (objects clause) are ultra vires and void; they cannot be ratified even by all shareholders.

9. What is the doctrine of 'constructive notice' under the Companies Act?

   Persons dealing with a company are deemed to have notice of the contents of its public documents (MOA and AOA) filed with the Registrar, whether or not they actually read them.

10. What is the doctrine of 'indoor management' (Turquand's Rule)?

    Outsiders dealing with a company in good faith may assume that internal procedures/requirements have been complied with; they are not bound to inquire into the regularity of internal proceedings.

11. Define 'private placement' under Section 42 of the Companies Act, 2013.

    An offer or invitation to subscribe to securities made to a select group of identified persons (not exceeding 200 in a financial year per kind of security, excluding QIBs and ESOP employees) through a private placement offer-cum-application letter.

12. What is the difference between a 'prospectus' and a 'statement in lieu of prospectus'?

    A prospectus is a document inviting the public to subscribe for securities. (A statement in lieu of prospectus existed under the 1956 Act for companies not issuing to public; under the 2013 Act this concept is largely replaced by private placement provisions.)

13. What types of resolutions exist under the Companies Act, 2013 and what majority does each require?

    Ordinary resolution: votes cast in favour exceed votes against (simple majority). Special resolution: votes in favour are at least 3 times the votes against (75% majority), with 21 clear days' notice specifying the intention.

14. What is the minimum notice period for a general meeting and what is the quorum for a private company?

    Notice: 21 clear days (in writing or electronic mode); shorter notice allowed with consent of 95% members. Quorum for a private company: 2 members personally present.

15. State the quorum requirements for the general meeting of a public company under the Companies Act, 2013.

    Members up to 1000: 5 members present; more than 1000 up to 5000: 15 members; more than 5000: 30 members personally present.

16. What is a 'related party transaction' under Section 188 and when is board/shareholder approval needed?

    Contracts with related parties (e.g., sale/purchase of goods, property, leasing, appointment to office/place of profit). Requires Board approval; transactions above prescribed limits also need an ordinary resolution, with interested members not voting.

17. Define 'charge' under Section 2(16) of the Companies Act, 2013 and the time limit for registration.

    A charge is an interest or lien created on the property or assets of a company as security. It must be registered with the Registrar within 30 days of creation (extendable as prescribed, generally up to 120 days with additional fees).

18. What is the difference between a 'fixed charge' and a 'floating charge'?

    Fixed charge: attaches to specific, identifiable assets and restricts dealing in them. Floating charge: hovers over a class of changing assets (e.g., stock-in-trade) and crystallizes (becomes fixed) on default or winding up.

19. What is the maximum number of companies in which a person can be appointed as director under the Companies Act, 2013?

    20 companies in total, of which not more than 10 can be public companies. (For counting the limit of 10, directorships in dormant companies and Section 8 companies are excluded.)

20. What is the difference between a 'whole-time director', 'managing director', and 'independent director'?

    MD: director entrusted with substantial powers of management. Whole-time director: a director in whole-time employment of the company. Independent director: a non-executive director meeting independence criteria under Section 149(6), bringing objectivity.

21. Which companies must appoint at least one woman director under the Companies Act, 2013?

    Every listed company and every other public company with paid-up share capital of Rs. 100 crore or more, or turnover of Rs. 300 crore or more.

22. State the applicability threshold for Corporate Social Responsibility (CSR) under Section 135.

    A company having net worth of Rs. 500 crore or more, OR turnover of Rs. 1000 crore or more, OR net profit of Rs. 5 crore or more in the immediately preceding financial year must spend at least 2% of average net profits of the preceding 3 years on CSR.

23. What is the difference between 'transfer' and 'transmission' of shares?

    Transfer: voluntary act by act of parties using an instrument of transfer (Form SH-4). Transmission: passing of shares by operation of law (e.g., death, insolvency, lunacy) without an instrument of transfer.

24. Under the Companies Act, 2013, what is the maximum permissible managerial remuneration for a public company in a financial year?

    11% of net profits computed under Section 198. Exceeding this limit requires approval by special resolution (and, in certain inadequate-profit cases, compliance with Schedule V).

25. What is a 'dormant company' under Section 455 of the Companies Act, 2013?

    A company formed for a future project/holding an asset or intellectual property with no significant accounting transaction, or an inactive company, that obtains the status of dormant company from the Registrar.

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