FEMA_Practicla Problems_9

State whether the following statements are ‘True ‘ or ‘False’.

1. FEMA is a civil law.


2. A person resident in India can carry Indian currency notes of any denomination while traveling to Nepal.


3. ‘X’ who went to Switzerland in December, 2003 and drew US $ 10,000 desires to go to USA in January 2004, he can again draw US $ 10,000.


4. Foreign exchange payable for import of goods is a capital account transaction.


5. ‘X’, a citizen of USA but of Indian origin, comes to India for doing business and with the intention of setting in India, he becomes person resident in India on his arrival in India.


6. ‘A’ a citizen of India, goes to London to attend to his sick father and intends to stay in England till his father recovers, he becomes a non-resident from the date he leaves India.


7. ‘Security’ under FEMA includes a bill of exchange and promissory notes.


8. A person resident in India can purchase British lottery tickets through Internet using his International credit card.


9. A foreigner who is a non-whole time director of an Indian company can be paid ‘to’ and ‘fro’ fare for attending Board meetings in India.


10. An Indian sole proprietorship concern can accept deposits from non-residents on repatriation basis.


11. Export proceeds under FEMA must be realized within one month of shipment.


12. A non-resident can purchase immovable property in India only for his own residential use.


13. A person can buy foreign exchange up to US $ 1,00,000 for studies abroad per academic year.


14. A public limited company incorporated in India can accept deposits from non-residents only on non-repatriation basis.


15. A non-resident Indian who sells his immovable property in India can repatriate outside India only an amount equivalent to foreign exchange brought in.

FEMA_Practicla Problems_7

Mr. Z had resided in India during the financial year 1999-2000 for more than 182 days. He left India on August 1, 2000 for United States for pursuing higher studies for 3 years. What would be his residential status during financial year 2000-01 and during 2001-02 ?

FEMA_Practicla Problems_6

Mr. X had resided in India during the financial year 1999-2000 for less than 183 days. He had come to India on April 1,2000 for business. He intends to leave the business on April 30, 2001 and leave India on June 30,2001. What would be his residential status during the financial year 2000-01 and during the financial year 2001-02 up to the date of his departure ?

FEMA_Practical Problems_5

Mr.A had resided in India during the financial year 1999-2000 (1st April, 1999 to 31st March, 2000) for less than 183 days. He has come to India on April 1, 2000 for employment. What would be his residential status during the financial year 2000-01 (1-4-2000 to 31-3-2001) ?

Companies Act_Practical problems_25

The paid up capital of Needy Private Limited is Rs. 5 lakhs. Liberal Finance Ltd. has agreed to grant a loan or Rs. 2 crores to Needy Private Limited on the condition that Liberal Finance Ltd. shall have a right to nominate Mr. Successful, Mr. Achiever and Mr. Reliable as directors on the Board of Needy Private Limited. The articles of Needy Private Limited require every director to hold qualification shares of a nominal value of Rs. 20,000. Answer the following in view of the provisions of the Companies Act, 1956:

(i) Whether appointments of the three directors by Liberal Finance Ltd. can be made in accordance with the Loan Agreement entered into by Liberal Finance Ltd. and Needy Private Limited?

(ii) Whether the three directors nominated by Liberal Finance Ltd. shall have to obtain the qualification shares. If yes, what will be the value of the qualification shares?

(ii) Assuming that all legal requirements for appointment of the three directors are complied with, and the three directors hold requisite qualification shares, if any, whether these directors are required to disclose their interest in an agreement put for consideration in the Board meeting of Liberal Finance Ltd., and can they vote thereat?

Companies Act_Practical problems_24

Director’s Responsibility Statement is required to be made only when a company has not made compliances with the provisions of the Companies Act, 1956. The contents of the Director’s Responsibility Statement shall be such as deem fit by the directors. Comment.

Companies Act_Practical problems_23

The directors of a company have to travel very often for the company’s business. The company makes some advances to them for this purpose which sometimes exceed the actual requirements. Comment.

Companies Act_Practical problems_22

As a secretary of ST Ltd. advise the Board of directors regarding appointment of an alternate director, an additional director, and a director filling a casual vacancy. The articles of ST Ltd. does not contain any provision regarding appointment of any directors

Companies Act_Practical problems_21

A company failed to file annual accounts and annual return for two consecutive financial years (although such documents were ready for filing). The annual accounts and annual return for third financial year are not ready as on last date of filing annual return. Suggest the course of action to be adopted by the company and consequences if default is made in third year also.

Companies Act_Practical problems_20

Give your views in the following cases:

(i) Mr. A, a whole time director of the company is appointed as a secretary at a remuneration of Rs. 5,600 per month. No approval of shareholders is obtained in the first general meeting. Mr. B, another director of the company contends that Mr. A shall cease to be a director as from the date of first general meeting. Comment.

(ii) Mr. X is already a director in 15 companies. He has been appointed as a director in RT Ltd. on 23.4.2004 and in ST Ltd. on 30.4. 2004. Mr. X resigns from one of his earlier directorships on 13.5.2004. On the same date, he intends to accept the directorship in RT Ltd. and ST Ltd. Comment.

Companies Act_Practical problems_19

The balance sheet of M/s. Hush Hush Ltd., as at 31.3.1999 filed with registrar of companies, Mumbai disclosed that the liabilities amounted to Rs. 2.75 crores as against the assets of Rs. 1.25 crores. On the basis of the scrutiny of the Balance Sheet, the registrar filed a winding up petition against the company stating that it is commercially insolvent and that the company is unable to pay its debts on the ground that the value of liabilities far exceeded the value of assets. Examine whether the company has any case to defend against the winding up petition filed by the registrar.

Companies Act_Practical problems_18

The directors of a company held more than 75% shares in the company. The company was carrying on business of construction of projects. The directors acquired certain contracts in their own name in breach of trust and made profits for themselves. In the annual general meeting, they passed a resolution that the company had no interest in the contract. The minority shareholders filed a case against directors asking them to account for the profits. Discuss.

Companies Act_Practical problems_17

Where the appointment of a sole selling agent is made without a condition that the appointment is subject to approval of members but later on members’ approval is obtained, the appointment of sole selling agent is validated. Comment.

Companies Act_Practical problems_16

Examine whether the quorum is present in the following cases:

(i) In a Board meeting, only 3 directors were present out of the total of 11 directors. None of the 3 directors was interested in any of the items of the agenda.

(ii) In a meeting of the Board, out of the total of 11 directors, 7 directors were present of which only 2 directors were not interested in one of the transactions.

(iii) The articles of association of a company fixed 3 as the quorum for a meeting of the Board. At a meeting of the Board, all the 5 directors were present. They allotted the shares of the company to 3 of the directors. Is the allotment valid?

Unsolved_Practical Problems_14

Mr. A, Director of Arihant Institute demand inspection of books of account at his residence. Company deny the inspection. Comment on the action of company. Would your answer be differnt if Director is handicaped and unable to visit the office of company ?

Unsolved_Practical Problems_13

The managing Director of Arihant Ltd has paid remuneration of Rs. 25,00,000 during the year. Co has availed the loan from finanial institute, the agreement of which provide that company is required to pay 11% profit to it in lieu of interest of loan. Accordingly company has paid interest. State with reason whether in your opinion, BOD is require to disclose fact under the head "Particulars relating to employess" under section 217 (2A) in its Board report ? if not, why ? Would your answer be different if financial institue has appointed nominee director on the board of Arihant Ltd ?

Unsolved_Practical Problems_12

Arihant Institute company registered under Sec. 25 of Comapnies Act wants to destroy its books of account for the financial year 2000. When they can do so ?

Unsolved_Practical Problems_11

Arihant Ltd wants to destroy its books of account for the year 1999. After which date it can destroy ? Show your calculation alongwith Provision of Act.

Unsolved_Practical Problems_10

Board of directors of Arihant Institute Ltd wants to keep its books of account at Nagpur. Company’s registered office is situated at Ahmedabad. What procedure should be followed by board ? Would your answer be different, if board of director wants to keep its books of account to its New York branch ?

Unsolved_Practical Problems_9

Arihant Ltd wants to write its books of account in pencil. Advise company