CA Foundation Sep 2026 – CWTS – APARAJIT LIVE Batch CA Foundation SEP 2026 Business Law – The Companies Act 2013 Aparajit LIVE Batch Designed by – CTC Classes IMPORTANT :- 1. Subscribe – ( CTC Classes ) for CA Foundation Complete Course & REVISION. 2. Application – ( CTC Classes ) Search on Playstore 3. Join US on TELEGRAM – Search on Telegram – CTC Classes - For Free NOTES & Update Time Allotted – 75 Minutes MARK’S - 40 Question 1 The Articles of Association of Bright Future Limited authorized the Managing Director (MD) to borrow money on behalf of the company only up to Rs. 20 lakh. Any borrowing beyond this limit required prior approval of the Board of Directors through a resolution. Mr. Raj, the Managing Director, approached Secure Finance Ltd. and obtained a loan of Rs. 2 crore in the name of the company. The lender neither asked for a copy of the Board Resolution nor made any inquiry regarding the authority of the MD. The loan agreement was signed solely by the MD. Later, when Secure Finance Ltd. demanded repayment, the company refused to pay, stating that the MD had acted beyond his authority and that no Board Resolution had been passed approving such borrowing. Secure Finance Ltd. argued that it was entitled to rely upon the Doctrine of Indoor Management and that the company was bound by the transaction. Discuss whether Secure Finance Ltd. can enforce the loan against Bright Future Limited. 5 Marks Question 2 Green Energy Limited was incorporated with the main object of manufacturing and selling solar panels. Its Memorandum of Association clearly stated that the company could engage only in activities related to renewable energy. The Articles of Association provided that any borrowing exceeding Rs. 50 lakh required the approval of shareholders through a Special Resolution, which was duly passed and registered with the Registrar. Mr. Sharma entered into a contract with Green Energy Limited under which the company agreed to invest Rs. 5 crore in a luxury hotel project owned by him. The agreement was signed by the Managing Director on behalf of the company. Before entering into the contract, Mr. Sharma did not inspect the Memorandum, Articles, or any registered documents of the company. CA Foundation Sep 2026 – CWTS – APARAJIT LIVE Batch Subsequently, the company refused to perform the contract, arguing that investment in a luxury hotel project was beyond the objects stated in its Memorandum and therefore void. Mr. Sharma contended that he was unaware of the restrictions contained in the Memorandum and that the company should be bound by the agreement. Discuss the legal position with reference to the Doctrine of Constructive Notice. 5 Marks Question 3 Seven persons decided to incorporate Future Vision Technologies Private Limited. Among them was Rohan, a 16-year-old minor. Since Rohan was interested in becoming a shareholder, his father signed the Memorandum of Association on his behalf as his guardian. The Memorandum contained all the compulsory clauses such as Name Clause, Registered Office Clause, Object Clause, Liability Clause, Capital Clause, and Subscription Clause. After incorporation, a dispute arose regarding the validity of the company’s incorporation. One of the creditors argued that the company was not properly incorporated because a minor had subscribed to the Memorandum. Rohan’s father c laimed that he had signed only as a guardian and should not be treated as a subscriber or member of the company. Examine the validity of the incorporation and determine the legal position of Rohan and his father under the Companies Act, 2013. 5 Marks Question 4 Seven friends — Aman, Bharat, Chirag, Deepak, Esha, Farhan, and Gauri — decided to incorporate Bright Future Private Limited with an authorized share capital of Rs. 10 lakh divided into 1,00,000 equity shares of Rs. 10 each. While preparing the Memorandum of Association, all seven persons signed the document expressing their desire to form the company. However, Bharat did not mention the number of shares taken by him against his name. Further, Esha signed the Memorandum but did not agree to take any shares in the company. The Registrar of Companies noticed these irregularities during the incorporation process. Aman argued that since all subscribers had signed the Memorandum, the company should be registered without any objection. Discuss the legal position regarding the validity of the Memorandum and the requirements relating to subscribers. 5 Marks Question 5 Sunrise Technologies Limited, a public company, had an equity share capital consisting of 10,00,000 equity shares of Rs. 10 each. To raise additional funds without substantially affecting the control of existing promoters, the Board proposed to issue 1,00,000 equity shares carrying higher dividend rights but lower voting rights than ordinary equity shares. The shareholders approved the proposal in a general meeting. Mr. Arvind, an existing shareholder, objected to the issue and contended that all equity shareholders must have identical rights regarding dividend and voting. He argued that the proposed issue was illegal and contrary to the CA Foundation Sep 2026 – CWTS – APARAJIT LIVE Batch Companies Act, 2013. The company, however, maintained that the Act permits the issue of shares with differential rights subject to compliance with prescribed rules. Examine whether the company can legally issue such shares and discuss the rights of shareholders in this regard. 6 Marks Question 6 The Central Government incorporated National Infrastructure Development Limited (NIDL) under the Companies Act, 2013. The entire share capital of the company was contributed by the Central Government, and all the shares were held by the President of India and certain government officers on behalf of the Government. NIDL entered into a contract with ABC Constructions Pvt. Ltd. for the construction of highways. Due to financial difficulties, NIDL failed to make payment of ₹ 50 crore to ABC Constructions. ABC Constructions filed a suit against NIDL and simultaneously claimed that since the entire share capital of NIDL belonged to the Central Government, the Central Government itself was liable to pay the outstanding amount. The company further argued that NIDL was merely an agent of the Central Government and therefore the Government should be treated as the real contracting party. The Central Government denied liability and contended that NIDL was a separate legal entity distinct from the Government. Discuss the legal position and decide whether ABC Constructions can recover the amount directly from the Central Government. 7 Marks Question 7 Global Marine Exports Ltd. was incorporated in India under the Companies Act, 2013. Its registered office was situated in Mumbai, and it carried on the business of exporting marine products worldwide. During an international conflict, Country X was declared an enemy country by India. Although Global Marine Exports Ltd. was incorporated in India, 90% of its shares were held by citizens of Country X. Further, all important decisions of the company were taken by directors residing in Country X. The Board of Directors, which effectively controlled the company’s affairs, operated from Country X and regularly issued instructions regarding the management of the company. The Government of India prohibited Indian companies from entering into commercial transactions with enemy companies. Despite this, ABC Traders, an Indian company, entered into a supply contract with Global Marine Exports Ltd. Subsequently, a dispute arose regarding payment under the contract. ABC Traders argued that Global Marine Exports Ltd. was an Indian company and therefore not an enemy company. On the other hand, the Government contended that the company should be treated as an enemy company because its affairs were controlled by persons belonging to an enemy country. Discuss the legal position and determine whether Global Marine Exports Ltd. can be regarded as an enemy company. 7 Marks Imp. 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