UGC NET Commerce Legal Aspects of Business Flashcards

24 sample cards from the Legal Aspects of Business deck

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

1. Classify companies on the basis of liability of members.

   (1) Company limited by shares, (2) company limited by guarantee, and (3) unlimited company. (On incorporation basis: chartered, statutory, registered; on members: private, public, one-person company.)

2. Differentiate between a private company and a public company under the Companies Act, 2013.

   A private company restricts share transfer, has a minimum of 2 and maximum of 200 members, and cannot invite the public to subscribe. A public company has a minimum of 7 members (no maximum) and can freely invite public subscription and transfer shares.

3. What are the main documents/stages required for the formation of a company?

   Promotion, incorporation (filing Memorandum of Association, Articles of Association, and obtaining Certificate of Incorporation), and (for public companies raising capital) commencement of business via declaration. SPICe+ form is used for registration.

4. Distinguish between the Memorandum of Association and the Articles of Association.

   The Memorandum (MoA) is the charter defining the company's scope/powers and its relation with outsiders (object, name, capital, liability clauses). The Articles (AoA) are internal rules/regulations for management. The AoA is subordinate to the MoA.

5. What is the doctrine of 'ultra vires' in company law?

   Any act done by a company beyond the powers/objects stated in its Memorandum is ultra vires (beyond powers) and is void; it cannot be ratified even by all shareholders. It protects creditors and investors.

6. What are the main types of company meetings?

   Annual General Meeting (AGM), Extraordinary General Meeting (EGM), Board meetings, and class meetings. Key concepts: quorum, proxy, ordinary resolution (simple majority) and special resolution (3/4 majority).

7. What are the modes of winding up a company under the Companies Act / IBC?

   Winding up may be (1) by the Tribunal (compulsory, e.g., for inability to pay debts or just-and-equitable grounds) and (2) voluntary winding up. A liquidator realises assets, pays creditors, and distributes any surplus to members.

8. What is a Limited Liability Partnership (LLP) and its key features?

   An LLP (LLP Act, 2008) is a body corporate combining features of a partnership and a company: separate legal entity, perpetual succession, limited liability of partners, and no partner is liable for another partner's misconduct. Minimum 2 partners, no maximum limit.

9. State the procedure for formation of an LLP in India.

   Obtain Digital Signature Certificate (DSC) and DIN/DPIN for designated partners, reserve name (RUN-LLP/FiLLiP), file incorporation form FiLLiP with the Registrar, obtain the Certificate of Incorporation, and file the LLP Agreement (Form 3) within 30 days.

10. What are the main objectives and provisions of the Consumer Protection Act, 2019?

    To protect consumer interests through six rights (safety, information, choice, to be heard, redressal, consumer education). It establishes the CCPA, a three-tier redressal system (District, State, National Commissions), and provisions on product liability, unfair trade practices, and e-commerce/misleading ads.

11. What is the objective and key feature of the Competition Act, 2002?

    To prevent practices having an adverse effect on competition, promote and sustain competition, protect consumer interests, and ensure freedom of trade. It prohibits anti-competitive agreements and abuse of dominant position, and regulates combinations (mergers) through the Competition Commission of India (CCI).

12. What are the main objectives of the Information Technology Act, 2000?

    To give legal recognition to electronic records and digital signatures, facilitate e-commerce and e-governance, and provide a framework to prevent cyber crimes and adjudicate cyber offences.

13. Give examples of cyber crimes and penalties under the IT Act, 2000.

    Tampering with computer source documents (Sec 65), hacking/identity theft (Sec 66, 66C), publishing obscene material (Sec 67), and cyber terrorism (Sec 66F). Penalties range from fines to imprisonment (up to life imprisonment for cyber terrorism).

14. What is a digital signature under the IT Act and what does it ensure?

    A digital signature is an electronic authentication of a record using asymmetric cryptosystem and hash function. It ensures authenticity, integrity, and non-repudiation of electronic documents and is legally recognised (Sec 3).

15. What is intellectual property and what are its main forms in India?

    Intellectual property refers to creations of the mind protected by law. Main forms: patents, trademarks, copyrights, designs, geographical indications, and trade secrets.

16. Differentiate between a patent, a trademark, and a copyright.

    A patent protects new inventions (term 20 years). A trademark protects brand identifiers like logos/names (renewable every 10 years). A copyright protects original literary, artistic, musical, and software works (generally author's life + 60 years in India).

17. What is the term of protection and governing law for patents in India?

    Patents are governed by the Patents Act, 1970, and protected for 20 years from the date of filing, subject to payment of renewal fees. After expiry, the invention falls into the public domain.

18. Name some emerging issues in intellectual property rights.

    Protection of software and AI-generated works, patenting of biotechnology/genes, digital piracy and copyright in the internet age, traditional knowledge and biopiracy, domain name disputes, and balancing IP rights with public health (compulsory licensing of medicines).

19. What are the main objectives and provisions of the Right to Information (RTI) Act, 2005?

    To promote transparency and accountability in public authorities by empowering citizens to seek information. It provides for Public Information Officers, time-bound responses (generally 30 days), and Information Commissions (Central and State) as appellate bodies.

20. What is the Goods and Services Tax (GST) and when was it implemented in India?

    GST is a comprehensive, destination-based, multi-stage indirect tax levied on the supply of goods and services, with credit of taxes paid at previous stages (input tax credit). It was implemented in India on 1 July 2017.

21. What are the main benefits of GST?

    Removal of cascading effect (tax on tax), one nation-one tax-one market, simplified compliance, seamless input tax credit, wider tax base, reduced logistics/transit costs, boost to GDP and exports (zero-rated), and increased transparency.

22. Explain the dual GST model adopted in India.

    India follows a dual GST where both the Centre and States levy tax on a common base. On intra-state supply, CGST (Central) and SGST/UTGST (State/UT) are levied simultaneously; on inter-state supply, IGST (Integrated GST) is levied by the Centre and shared with states.

23. How is the input tax credit (ITC) set-off mechanism applied under GST?

    IGST credit is used first against IGST, then CGST, then SGST. CGST credit is used against CGST and then IGST (not against SGST). SGST credit is used against SGST and then IGST (not against CGST). CGST and SGST credits cannot be cross-utilised.

24. What is the role of the GST Council in the implementation of GST?

    The GST Council (Article 279A) is the apex body chaired by the Union Finance Minister with state finance ministers as members. It recommends tax rates, exemptions, threshold limits, model GST laws, and resolves implementation issues to ensure uniformity.

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