- Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth Rs.1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to the due date and met Mr. C, an employee at the billing counter, who convinced the former that the payment can be made to him as the billing -cashier is on leave.
Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due date, Mr. R received a recovery notice from the company for the payment of Rs.1,50,000/-.Mr. R informed the company that he has already paid the above amount and being an outsider had genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt.The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and the liability of Mr. R towards company as on current date in consonance with the provision of the Companies Act 2013? Would your answer be different if a receipt und er the company seal was not issued by Mr. C after receiving payment?[2022 December – 4 Marks]
- (i) Mr. Anil formed a One Person Company (OPC) on 16 April, 2018 for manufacturing electric cars. The turnover of the OPC for the financial year ended 31 March, 2019 was about ` 2.25 crores. His friend Sunil wanted to invest in his One Person Company (OPC), so they decided to convert it voluntarily into a private limited company. Can Anil do so, as per the provisions of the Companies Act, 2013?
[2022 December – 4 Marks]
(ii) Explain listed company and unlisted company as per the provisions of the Companies Act, 2013. (2 Marks)
[2022 December – 2 Marks]
- Mike LLC incorporated in Singapore having an office in Pune, India. Analyse whether Mike LLC would be called as a foreign company as per the provisions of the Companies Act, 2013? Also explain the meaning of foreign company.
[2022 December – 3 Marks]
- The Articles of Association of Aarna Limited empowers its managing agents to borrow loans on behalf of the company. Ms. Anika, the director of the company, borrowed ` 18 Lakhs in name of the company from Quick Finance Limited, a non-banking finance company. Later on, Aarna Limited refused to repay the money borrowed on the pretext that no resolution authorizing such loan have been actually passed by the company and therefore the company is not liable to pay such loan.
Decide whether the contention of Aarna Limited is correct in accordance with the provisions of the Companies Act, 2013? (4 Marks)[2022 May – 4 Marks]
Answer :
Doctrine of Indoor Management
According to this doctrine, persons dealing with the company need not inquire whether internal proceedings relating to the contract are followed correctly, once they are satisfied that the transaction is in accordance with the memorandum and articles of association.
Stakeholders need not enquire whether the necessary meeting was convened and held properly or whether necessary resolution was passed properly. They are entitled to take it for granted that the company had gone through all these proceedings in a regular manner.
The doctrine helps to protect the external members from the company and states that the people are entitled to presume that internal proceedings are as per documents submitted with the Registrar of Companies.
Thus,
1. What happens internal to a company is not a matter of public knowledge. An outsider can only presume the intentions of a company, but do not know the information he/she is not privy to.
2. If not for the doctrine, the company could escape creditors by denying the authorit y of officials to act on its behalf.
In the given question, Quick Finance Limited being external to the company, need not enquire whether the necessary resolution was passed properly. Even if Aarna Limited claims that no resolution authorizing the loan was passed, Aarna Limited is bound to repay the loan to Quick Finance Limited. - Explain the ‘Doctrine of ultra vires under the Companies Act, 2013. What are the consequences of ‘ultra vires’ acts of the company?
[2022 May – 6 Marks]
- Mr. R is an Indian citizen, and his stay in India during the immediately preceding financial year is for 130 days. He appoints Mr. S, a foreign citizen, as his nominee, who has stayed in India for 125 days during the immediately preceding financial year. Is Mr. R eligible to be incorporated as a One-Person Company (OPC)? If yes, can he give the name of Mr. S in the Memorandum of Association as his nominee? Justify your answers with relevant provisions of the Companies Act, 2013.
[2022 May – 3 Marks]
- AK Private Limited has borrowed ` 36 crores from BK Finance Limited. However, as per memorandum of AK Private Limited the maximum borrowing power of the company is Rs.30 crores. Examine, whether AK Private Limited is liable to pay this debt? State the remedy, if any available to BK Finance Limited.
[2021 December – 4 Marks]
- What do you mean by the term Capital? Describe its classification in the domain of Company Law.
[2021 December – (1 + 5 = 6 Marks)]
- BC Private Limited and its subsidiary KL Private Limited are holding 90,000 and 70,000 shares respectively in PQ Private Limited. The paid-up share capital of PQ Private Limited isRs. 30 Lakhs (3 Lakhs equity shares of Rs. 10 each fully paid). Analyse with reference to provisions of the Companies Act, 2013 whether PQ Private Limited is a subsidiary of BC Private Limited. What would be your answer if KL Private Limited is holding 1,60,000 shares in PQ Private Limited and no shares are held by BC Private Limited in PQ Private Limited? (3 Marks)
[2021 December – 3 Marks]
- Y incorporated a “One Person Company (OPC)” making his sister Z as nominee. Z is leaving India permanently due to her marriage abroad. Due to this fact, she is withdrawing her consent of nomination in the said OPC. Taking into considerations the provisions of the Companies Act, 2013 answer the questions given below:
(i) Is it mandatory for Z to withdraw her nomination in the said OPC, if she is leaving India permanently?
(ii) Can Z continue her nomination in the said OPC, if she maintained the status of Resident of India after her marriage?[2021 July – 4 Marks]
- Explain the classification of the companies on the basis of control as per the Companies Act, 2013.
[2021 July – 6 Marks]
- What is the main difference between a Guarantee Company and a Company having Share Capital?
[2021 July – 3 Marks]