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FINAL LAW
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1|Page BY CA Sanidhya Saraf

 Key pointers to solve MCQs
Sr.no. Topic Detailed Points
1. Section 218 PROTECTION OF Appeal: If the company, other body corporate
EMPLOYEES DURING or person concerned is dissatisfied with the
INVESTIGATION objection raised by the Tribunal, it may, within
a period of thirty days of the receipt of the
notice of the objection, prefer an appeal to the
Appellate Tribunal .

2. Section 206 POWER TO CALL Failure to furnish information: If a company

FOR INFORMATION, fails to furnish any information or explanation
INSPECT BOOKS AND or produce any document required under this
CONDUCT INQUIRIES section, the company and every officer of the
company, who is in default shall be punishable
with a fine which may extend to 1 lakh
rupees and in the case of a continuing failure,
with an additional fine which may extend to
500 rupees for every day after the first during
which the failure continues [Section 206 (7)].

3. Section 218 Protection of The Registrar may, by issuing a written

employees during investigation notice, call the ex-directors for seeking the
requisite information.

4. Section 212 Investigation into SFIO will proceed with its investigation while
affairs of Company by Serious Income-tax authorities shall keep on hold its
Fraud Investigation Office investigation.

5. Section 3 SARFAESI Conditions : The ARC has not incurred losses

Registration of ARC in any of the 3 preceding financial years

6. IBC 2016 An Adjudicating Authority order the

liquidation of a corporate debtor even after
approving the resolution plan:
Yes, if the resolution plan is contravened.

7. Section 288 Submission of The periodicity of submission of report by

periodical reports to Tribunal company liquidator with respect to the progress
Winding up of winding up of the company to the Tribunal-
Quarterly.

8. FEMA (Limit on bringing Indian INR 25,000

currency notes at the time of
return to India.)
9. IBC 2016 Section 13(9) Joint In the case of financing of a financial asset by
financing more than one secured creditors, there secured
creditor shall be entitled to exercise any of the
rights conferred on him is agreed upon by the

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 secured creditors representing Not less than
60% in value of the amount outstanding as
on a record date in order to make such an
action binding on all the secured creditors.

10. Section 272 Petition for winding Eligibility to file petition for winding up -
up holding shares for 6 months or more prior to
presenting such petition for winding up

11. Section 285 Settlement of list of In the case of a company limited by shares ,
contributories and application of no contribution shall be required from any
assets person, who is or has been a member exceeding
the amount, if any, unpaid on the shares in
respect of which he is liable as such member;

A person who has been a member shall not be

liable to contribute in respect of any debt or
liability of the company contracted after he
ceased to be a member;
12. Section 332 Effect of floating Where a company is being wound up, a
charge floating charge on the undertaking or property
of the company created within the twelve
months immediately preceding the
commencement of the winding up, shall,
unless it is proved that the company
immediately after the creation of the charge
was solvent, be invalid, except for the amount
of any cash paid to the company at the time
of, or subsequent to the creation of, and in
consideration for, the charge, together with
interest on that amount at the rate of five
per cent. per annum or such other rate as
may be notified by the Central Government
in this behalf.

13. Section 6 SCRA It is the duty of RSE to furnish the details of

delisted securities during the previous 3
months, to SEBI.

14. Section 21A and 23L SCRA Time limit for appeal (15 days and 45 days
respectively)

15. Section 230 Power to Notice to creditors,members,debentureholders

compromise or make shall provide that the persons to whom the
arrangements with creditors and notice is sent may vote in the meeting either
members themselves or through proxies or by postal
ballot to the adoption of the compromise or
arrangement within one month from the date
of receipt of such notice.

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 Provided that any objection to the compromise
or arrangement shall be made only by persons
holding not less than ten per cent. of the
shareholding or having outstanding debt
amounting to not less than five per cent. of
the total outstanding debt as per the latest
audited financial statement .
16. Section 14 FEMA Enforcement State the time limit before which the person at
of orders of AA fault should pay the penalty, assuming he does
not prefer an appeal to the Appellate Authority:
Within 90 days from the date of the Order
imposing the penalty

17. Rule 4 Nidhi Company Maximum amount of rental income that could
have been earned by Nidhi Company- Not
exceeding 20 % of gross income

18. Section 15 IBC Public announcement – IRP should do

announcement immediately.(here immediately
means not later than three days from the
date of his appointment)

19. ECB guidelines under FEMA A Startup is permitted to raise ECB under the
automatic route with the minimum average
maturity period of 3 years.

20. IBC -Alteration of Claim by OC Shivdeep submitted his claim as an operational

after submission creditor to the liquidator of Chiranjeevi Food
Products Limited, a company under liquidation.
If Shivdeep wants to alter his claim, state the
time period within which he can do so after its
submission.- 14 days

21. Appointment of valuer A valuer in a company will be appointed by the

Audit committee or in its absence, by the
BOD of that company.
22. PMLA general ques. Money laundering transactions done via credit
card and online payments comes under the
Prevention of Money Act.

23. Section 12A IBC 2016 Withdrawal is possible by approval of 90% of

voting shares of the CoC.
24. Regulation 27(2) LODR The listed entity shall submit a quarterly
compliance report on corporate governance in
the format as specified by the Board from time
to time to the recognized stock exchange(s)
within fifteen days from the end of each
close of the quarter.
25. Regulation 24 LODR A listed entity shall not dispose of shares in its
material subsidiary resulting in reduction of its

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 shareholding (either on its own or together with
other subsidiaries) to less than or equal to
fifty percent or cease the exercise of control
over the subsidiary without passing a special
resolution in its General Meeting except in
cases where such divestment is made under a
scheme of arrangement duly approved by a
Court/Tribunal or under a resolution plan duly
approved under section 31 of the Insolvency
Code and such an event is disclosed to the
recognized stock exchanges within one day of
the resolution plan being approved.

26. Section 239 Preservation of Not be disposed of without prior permission of

books and papers of the Central Government
amalgamated companies

27. Section 454A Penalty for Where a company or an officer of a company

repeated default or any other person having already been
subjected to penalty for default under any
provisions of this Act, again commits such
default within a period of three years from
the date of order imposing such penalty
passed by the adjudicating officer or the
Regional Director, as the case may be, it or he
shall be liable for the second or subsequent
defaults for an amount equal to twice the
amount of penalty provided for such default
under the relevant provisions of this Act.
28. ECB Guidelines Minimum Average Maturity Period prescribed
for ECB raised for working capital purposes or
general corporate purposes under the ECB
framework is: 10 years.

29. Section 16 FCRA Every person who has been granted a

certificate under section 12 shall have such
certificate renewed within six months before
the expiry of the period of the certificate.

The Central Government shall renew the

certificate, ordinarily within ninety days from
the date of receipt of application for renewal
of certificate subject to such terms and
conditions as it may deem fit and grant a
certificate of renewal for a period of five years.
30. Section 29A Arbitration Act Under which circumstances the arbitration
process comes to an end as per the Arbitration
and Conciliation Act, 1996- When arbitrator
fails to pass the award within 12 months

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 31. Quorum of meeting of A meeting of committee of creditors shall
Committee of creditors quorate if members of the CoC representing at
least thirty three percent of the voting rights
are present either in person or by video/audio
means.
32. Section 9 Banking Regulation No banking company shall hold any
Act immovable property howsoever acquired
except for its own use, for period exceeding
seven years from the acquisition thereof.

33. Insurance Company Policy of life insurance shall be called in

question on any ground –within three years
from the date of issuance of the policy or the
date of commencement of risk or the date of
revival of the policy or the date of the rider to
the policy, whichever is later.

34. Section 7 Prohibition to accept No person who -

foreign contribution (a) is registered and granted a certificate or
FCRA has obtained prior permission under this Act;
and
(b) receives any foreign contribution,
shall transfer such foreign contribution to any
other person.

Earlier, foreign contribution accepted with the

permission of the Central Government could be
transferred to any other person who is
registered under FCRA, 2010 or has obtained
prior permission. It can be seen that the
legislature has placed a blanket prohibition on
transfer of foreign contribution received by any
person to any other person. The intention is to
prevent recipients of foreign contribution
acting as mere conduits or facilitating agents
for obtaining foreign contribution.

Important Note : The relevance of Rule 24 in

the light of the blanket prohibition is
debatable. Central Government may refuse to
grant permission citing section 7 as amended.
Nevertheless, an amendment to the rules or a
clarificatory circular would enable better
compliance on this matter.
35. Section 8 - Restriction to utilize Maximum Twenty per cent of such contribution,
foreign contribution for received in a financial year, to meet administrative
administrative purpose. expenses. Administrative expenses exceeding
FCRA twenty per cent of such contribution may be
defrayed with prior approval of the Central
Government.

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 36. Rule 16 of the Foreign Reporting by banks of receipt of foreign
Contribution (Regulation) contribution. *The bank shall report to the
Rules, 2011.(IMPORTANT) Central Government within forty-eight hours
any transaction in respect of receipt or
utilization of any foreign contribution by any
person whether or not such person is registered
or granted prior permission under the Act.

37. Applicability of IBC ,2016 on The Central Government in consultation with

NBFC the Reserve Bank of India notifies that the
insolvency resolution and liquidation
proceedings of the Non-banking finance
companies (which include housing finance
companies) with asset size of Rs.500 crore or
more, as per last audited balance sheet.

38. Section 277 Intimation to Company liquidator or provisional liquidator

Company Liquidator, provisional shall within three weeks from date of
liquidator and Registrar winding up order apply to tribunal for
formation of winding up committee.

39. FEMA R plan to visits USA. He can carry foreign

currency in cash for travel abroad: -USD 3000
per visit can be carried in cash (as foreign
currency notes/coins) for travel abroad.
40. Section 247 Registered Valuer As per sec 247 of Companies Act, 2013
registered valuer shall not undertake valuation
of any assets in which he has direct or indirect
interest or becomes so interested at any time
during a period of 3 years prior to his
appointment or 3 years after valuation of
asset was conducted by him.

41. Section 244 As per sec 244 of Companies Act, 2013

members eligible for applying to Tribunal for
relief in cases of oppression, etc. are: Company
having share capital, LOWEST of following: -
I) 100 members OR II) 1/10th of total
number of members OR
III) One or more members holding not less than
1/10th of issued share capital

42. Section 455 A company can make application to ROC to

obtain status of dormant company if it is an
inactive company. Inactive company means a
company which has not filed financial
statements and annual returns during last 2
FYs.

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 43. Section 209 Search and seizure Where registrar or inspector has reasonable
grounds to believe that books and papers of
company are likely to be destroyed, mutilated,
altered or falsified he may enter and search
place where books are kept & can seize only
after obtaining an order from special court.

44. FEMA On return from a foreign trip, travelers are

required to surrender unspent foreign exchange
in form of currency notes within 90 days and
travelers’ cheque within 180 days of return.
However, they are free to retain foreign
exchange up to USD 2000 in form of foreign
currency.

45. Section 73 of Companies Act. It Prohibition on acceptance of deposits from

is technically not a part of CA public-
Final Syllabus Maximum deposits companies can normally
accept from its members is 35 % of aggregate
of paid-up share capital, free reserves and
securities premium
46. Trade-Marks Act, 1999 It is technically not a part of CA Final Syllabus.
For your knowledge, as per Trade-Marks Act,
1999, time limit for making application to CG
against anomaly is 3 years from registration
of company.
47. Section 88 Register of Where company maintains register at a place
members, etc. outside India, it shall file form MGT-3 with
ROC in 30 days from date of opening any
foreign register as per sec 88 of Co Act, 2013

48. Notice requiring special meeting. As per sec 115 of Companies Act, 2013 Where,
by any provision contained in this Act or in the
articles of a company , special notice is
required of any resolution, notice of the
intention to move such resolution shall be
given to the company by such number of
member holding not less than one per cent of
total voting power or holding shares on which
such aggregate sum not exceeding five lakh
rupees, as may be prescribed, has been paid-up
and the company shall give its members notice
of the resolution in such manner as may be
prescribed.

Notice of Meeting As per sec 101 of Co Act if co has to convene

its AGM by shorter notice it must have consent
from not less than 95% of members entitled to
vote at such meeting.

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 49. Section 328 As per sec 328, a transaction is deemed to be
fraudulent preference if it relates to transfer of
property. It took place within 6 months
preceding date of winding up. It was a
voluntary act. In such case tribunal may make
such order as it thinks fit and declare such
transaction as invalid and restore
position. Official liquidator thus can recover
sale of assets as per sec 328.

50. ODI (FEMA) Real Estate sector & Banking are prohibited
sectors for overseas investment. {Real estate
business means buying and selling of real
estate or trading in transferable development
rights but does not include development of
township, construction or
residential/commercial premises, roads &
bridges.

***ALL THE BEST FOR EXAMINATIONS***

9|Page BY CA Sanidhya Saraf