CA Intermediate PAPER 2: CORPORATE AND OTHER LAWS Flashcards

24 sample cards from the PAPER 2: CORPORATE AND OTHER LAWS deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is the Limited Liability Partnership (LLP) and what are its two key features under the LLP Act, 2008?

   An LLP is a body corporate with perpetual succession and a separate legal entity from its partners. Key features: (1) limited liability of partners, and (2) flexibility of a partnership in internal management.

2. What is the minimum number of partners and designated partners required for an LLP?

   Minimum 2 partners (no upper limit). At least 2 designated partners, and at least one of them must be a resident in India.

3. Distinguish an LLP from a traditional partnership firm.

   LLP is a body corporate with separate legal personality and perpetual succession; partners have limited liability; registration is compulsory. A partnership firm has no separate legal entity, partners have unlimited liability, and registration is optional.

4. Distinguish an LLP from a company under the Companies Act, 2013.

   LLP is governed by the LLP Act with an LLP Agreement and fewer compliance requirements; managed by partners. A company is governed by the Companies Act, has shareholders and directors, holds board/general meetings, and faces stricter compliance.

5. What document governs the mutual rights and duties of partners in an LLP, and what applies if it is silent?

   The LLP Agreement governs mutual rights and duties. If there is no agreement on any matter, the provisions of the First Schedule to the LLP Act, 2008 apply.

6. Who can be a designated partner in an LLP and what is their key responsibility?

   Any individual partner (and a nominee of a body corporate partner) can be a designated partner; each must obtain a DPIN. They are responsible for compliance with the Act, including filing of returns and documents.

7. What is the extent of a partner's liability for the LLP's obligations under the LLP Act, 2008?

   An LLP's obligations are solely those of the LLP; a partner is not personally liable merely for being a partner. However, a partner remains personally liable for their own wrongful acts or omissions (fraud).

8. What annual filings must an LLP make under the LLP Act, 2008?

   Annual Return in Form 11 (within 60 days of close of financial year) and Statement of Account and Solvency in Form 8 (within 30 days from the end of 6 months of the financial year, i.e., by 30th October).

9. What is the main object of the General Clauses Act, 1897?

   To provide general definitions and rules of interpretation applicable to all Central Acts and Regulations, to shorten language, ensure uniformity of expression, and avoid repetition of definitions.

10. Under the General Clauses Act, 1897, how is the time/period of commencement and expiry of an enactment computed (Section 9 'from' and 'to')?

    When 'from' a day is used to define a period, the first day is excluded; when 'to' a day is used, the last day is included (i.e., first excluded, last included).

11. Under the General Clauses Act, 1897, what is the rule regarding gender and number in interpreting statutes (Section 13)?

    Words importing the masculine gender include females, and words in the singular include the plural and vice versa, unless the context otherwise requires.

12. What does Section 6 of the General Clauses Act, 1897 provide regarding the effect of repeal?

    Repeal of an enactment does not revive anything not in force, affect previous operation, affect rights/liabilities/penalties already accrued, or affect ongoing legal proceedings, unless a different intention appears in the repealing Act.

13. Under the General Clauses Act, 1897, when does a Central Act come into operation if no specific date is mentioned?

    It comes into force on the day it receives the assent of the President (Section 5).

14. Under the General Clauses Act, 1897, how is 'service by post' deemed to be effected (Section 27)?

    Where a document is required to be served by post, service is deemed effected by properly addressing, prepaying, and posting it by registered post, and is deemed to be effected at the time the letter would be delivered in the ordinary course of post.

15. What is the 'Literal Rule' (Grammatical Rule) of interpretation of statutes?

    Words of a statute are given their ordinary, natural, grammatical meaning. If the language is plain and unambiguous, the court must apply it as it is, regardless of consequences.

16. What is the 'Mischief Rule' (Heydon's Case) of statutory interpretation?

    The court considers four points: (1) the law before the Act, (2) the mischief/defect not addressed, (3) the remedy provided, and (4) the reason for the remedy. The statute is interpreted to suppress the mischief and advance the remedy.

17. What is the 'Golden Rule' of interpretation of statutes?

    A modification of the literal rule: words are given their ordinary meaning unless this leads to absurdity, inconsistency, or repugnance, in which case the meaning may be modified to avoid such an outcome.

18. Explain the rules of 'Noscitur a sociis' and 'Ejusdem generis'.

    Noscitur a sociis: a word's meaning is known from the accompanying words. Ejusdem generis: where general words follow specific words of the same class, the general words are limited to that class/genus.

19. What is the difference between the internal aids and external aids to interpretation of statutes?

    Internal aids are within the statute itself (title, preamble, definitions, headings, marginal notes, provisos, illustrations). External aids are outside it (parliamentary history, dictionaries, earlier/later statutes, foreign decisions).

20. What is the objective of the Foreign Exchange Management Act (FEMA), 1999?

    To facilitate external trade and payments and to promote the orderly development and maintenance of the foreign exchange market in India (a facilitating, civil-law approach, unlike the regulatory FERA it replaced).

21. Under FEMA, 1999, what is the difference between a 'capital account transaction' and a 'current account transaction'?

    Capital account transaction: alters assets/liabilities outside India of residents or in India of non-residents (e.g., investment, borrowing). Current account transaction: any transaction other than capital account, such as trade payments, interest, travel, and education expenses.

22. Under FEMA, 1999, how is a 'person resident in India' determined (Section 2(v))?

    A person residing in India for more than 182 days during the preceding financial year, with exceptions (e.g., persons who go abroad for employment/business/uncertain stay are not residents; those who come to India for employment/business/uncertain stay are residents). It also covers bodies/offices in India.

23. Under FEMA, 1999, who is the regulatory authority and what is an 'Authorised Person'?

    The Reserve Bank of India (RBI) is the regulatory authority. An Authorised Person is an authorised dealer, money changer, off-shore banking unit, or any other person authorised by the RBI to deal in foreign exchange or foreign securities.

24. Under FEMA, 1999, what are the consequences of contravention, and how does the penalty differ from FERA?

    Contraventions attract a penalty up to thrice the sum involved (where quantifiable) or up to Rs. 2 lakh where not quantifiable, plus Rs. 5,000 per day for continuing contravention. FEMA treats violations as civil offences (compoundable), unlike FERA where they were criminal offences.

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