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1 PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING SECTION A: BUSINESS LAWS PART I: RELEVANT AMENDMENTS APPLICABLE FOR NOVEMBER 2021 EXAMINATION For November 2021 examinations for Paper 2A: Business Laws, the significant amendments made in the respective subject upto 30th April, 2021 are relevant and applicable. Students are advised to refer study material of October 2020 edition with these applicable amendments. Relevant amendments: Here are given relevant amendments: Amendment in Companies Act, 2013 Earlier provision New provision Page No. Resident in India in One Person Company: Substituted by Companies (Incorporation) Second Amendment Rules, 2021, 1-4-2021.

2 Only a natural person who is an Indian citizen and resident in India (person who has stayed in India for a period of not less than 182 days during the immediately preceding financial year)- shall be eligible to incorporate a OPC; shall be a nominee for the sole member of a OPC. Only a natural person who is an Indian citizen whether resident in India or otherwise and has stayed in India for a period of not less than 120 days during the immediately preceding financial year)- shall be eligible to incorporate a OPC; shall be a nominee for the sole member of a OPC. Page No. Conversion of OPC to other company: Omitted by Companies (Incorporation) Second Amendment Rules, 2021, 1-4-2021.

3 ] OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation, except where the paid up share capital is increased beyond fifty lakh rupees or its average annual Omitted Page No. Downloaded From From FOUNDATION EXAMINATION: NOVEMBER, 2021 turnover during the relevant period exceeds two crore rupees. Small Company [Section 2(85)]: Inserted by Companies ( specification of Definitions Details) Amendment Rule, 2021, 1-4-2021. - For the purpose of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively.

4 Page No. Definition of Listed Company [Section 2(52)]: Inserted by the Companies (Amendment) Act, 2020, 22-1-2021. Listed company" means a company which has any of its securities listed on any recognised stock exchange. Listed company" means a company which has any of its securities listed on any recognised stock exchange: Provided that such class of companies, which have listed or intend to list such class of securities, as may be prescribed in consultation with the Securities and Exchange Board, shall not be considered as listed companies. Page No. Section 8(11) Substituted by the Companies (Amendment) Act, 2020, 21-12-2020.

5 Penalty/punishment in contravention: If a company makes any default in complying with any of the requirements laid down in this section, the company shall, be punishable with fine varying from ten lakh rupees to one crore rupees and the directors Penalty/punishment in contravention: If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to Page No. Downloaded From From PAPER 2 : BUSINESS LAWS & BUSINESS CORRESPONDENCE AND REPORTING 3 and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine varying from twenty-five thousand rupees to twenty-five lakh rupees, or with both and where it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447 which deals with Fraud.

6 Any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees: Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447. PART II: QUESTIONS AND ANSWERS QUESTIONS The Indian Contract Act, 1872 1. Mr. Pratham applied for a job as principal of a school.

7 The school management decided to appoint him. One member of the school management committee privately informed Mr. Pratham that he was appointed but official communication was not given from the school. Later, the management of the school decided to appoint someone else as a principal. Mr. Pratham filed a suit against the school for cancellation of his appointment and claimed Downloaded From From FOUNDATION EXAMINATION: NOVEMBER, 2021 damages for loss of salary. State with reasons, will Mr. Pratham be successful in suit filed against school under the Indian Contract Act, 1872? 2. Rahul, a minor, falsely representing his age, enters into an agreement with a shopkeeper for a loan amount for purchasing a laptop.

8 He gave his expensive watch as a security and took a loan of ` 40,000. He was very happy to get ` 40,000 and quickly went to the market and purchased a laptop worth ` 30,000. He happily spent the rest of the amount with his friends on a pleasure trip. Later on, Rahul realized that his watch was an expensive watch and he should not have given like this to the shopkeeper. So, he went back to the shopkeeper and asked for his watch back. Also, he refused to repay the loan amount. The shopkeeper disagrees to this and files a case against minor for recovery of the loan amount. Can the shopkeeper succeed in recovering the loan amount under the Indian Contract Act, 1872? 3. Mr. X was a Disk Jockey at a five star hotel bar.

9 As per the contract, he is supposed to perform every weekend ( twice a week). Mr. X will be paid ` 1500 per day. However, after a month, Mr. X willfully absents himself from the performance. (i) Does the hotel have the right to end the contract? (ii) If the hotel sends out a mail to X that they are interested to continue the contract and X accepts, can the hotel rescind the contract after a month on this ground subsequently? (iii) In which of the cases (termination of contract or continuance of contract) can the hotel claim damages that it has suffered as a result of this breach? 4. Mr. Ram Lal Birla was a big businessman of city Pune having two sons and one married daughter.

10 He decided to gift his one house to his daughter. For this purpose, he called his lawyer at his house and made a written document for such gift. The lawyer advised him to get the transfer document properly registered. When they both were going for registration of document, they met with an accident and both of them died. Later, his daughter found the document and claimed the house on the basis of that document. Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 5. PQR, a hospital in Delhi, recruits Dr. A, on contract basis for a period of 3 months. The hospital management promises to pay Dr. A, a lumpsum amount of ` 1,00,000 if Dr. A test positive for noval corona virus (Covid 19) during the contract period of 3 months.