Company Law Question Paper Analysis | June 2026 | CS Swathi Sharma

Added: 2026-06-03

[00:00:01]Hello and welcome back to the question paper analysis series. In today's video, we are going to discuss the company law and practice question paper of the June 2026 attempt which we just attempted today. So before actually seeing the question paper and understanding what kind of questions the institute has focused on in this attempt, let's quickly do a weightage analysis of the chapters uh given in this particular question paper. So introduction of company law has carried five marks.

[00:00:28]Legal status and types of registered companies has carried six marks.

[00:00:32]Memorandum and articles of association has carried three marks which is surprising. Share and share capital we know was an important chapter and has carried 13 marks. Again members and shareholders important chapter has carried 11 marks. Debt instrument has carried 10 marks. Charges three.

[00:00:47]Distribution of profits eight. Accounts and auditors important chapter has carried eight marks. Compromise arrangement amalgamation five marks. And do companies three marks. So this is the composition for part A of your question paper. Now moving to part B or part two of your question paper. General meetings is a very important chapter has carried 13 marks. Directors has carried 17 marks. Board composition and powers of the board has carried just five marks.

[00:01:12]Meeting of the board and committees five marks. Annual report has carried 10 marks. And key managial personnel and their remineration has carried 10 marks.

[00:01:20]So overall the weightage is in accordance to what has been followed by the institute uh in the previous. So there is no major shift in the weightage of the chapters in this ep. But before going to the actual analysis, let's go through the question paper and see what kind of questions the institute has asked. So all of us know the first one is a case case study based question which is followed by lot of sub questions. So they've not kept it from one single chapter but they've given you multiple situations and on the basis of the situation sub questions are framed.

[00:01:50]So there is a cumulative uh no sub questions from different chapters. First one is with respect to name change.

[00:01:56]They've given you a situation on the basis of this they've created the first sub question.

[00:02:09]The question is the company has not filed its MGT7 for the previous year 2425. They've made an application for name change. Whether the application is going to be access uh no allowed or not allowed. That is the one that sub question you have to answer. Again, if you have studied the provisions of uh name change and alteration of memorandum of association name clause, you should be able to answer it. Second question is with respect to um uh the diversification of your business and that is why they want to hold certain uh intellectual properties in a company for a future project. They don't want to alter the existing object law.

[00:02:47]So what is the remedy that is available?

[00:02:49]So it is linked to the dormant companies. Next you have status of listed company. So they are saying that the company wants to issue non-convertible redeemable preference shares and the company secretary has recommended that they can list uh this non-convertible redeemable preference shares and just by listing these non-convertible redeemable preference shares the board of directors want to understand whether the status of a listed company will be given to the company or not. So it's it's a a question from your lesson on um types of companies. What is the meaning of listed company? That is what you're required to write. Next question is upon uh the capacity to sue. So the same case has been given in your material as well where the trade union has filed a comp uh no has uh gone on a strike for unfair uh labor practices and non-payment of bonus. One of the bo uh workmen has clicked a video and uh they want to uh defame the uh company and they want to they are threatening saying that we'll release that video on social media. So what is the possibility of filing a case against uh the workmen as well as the trade union for defamation and can they get an injunction or not? That is a question and it is based on your from where has this come? There should not be a surprise. It is from capacity to sue and be sued under lesson two. Then is caro you know it is from the chapter of auditors. They've given you the requirement and you should say whether they've complied with the caro requirements or not. whether caro is applicable to them and the auditor has not made certain remarks on inventory verification. So in that uh is there a compliance or not non-compliant that you're required to say. So first one is you should say whether name change is approval or can be approved or not in case annual returns are not filed. Uh can they use the position of a dormant company to buy intellectual properties for a future project?

[00:04:39]Uh then the tag of listed company whether it will be given uh to a company which is issuing a non-convertible preference share. Then is that capacity to file a case against the workmen for circulating the video which is defamatory in nature capacity to sue.

[00:04:56]Then your car applicability and whether the auditors are have issued the report in compliance with the requirement or not. All these topics apart from this one capacity to sue nobody would have thought that this question would come but caro you know it's an important uh uh point you know that it is important dormant company status eligibility criteria and the purpose of dormant company itself is basic alteration of art uh memorandum of association name clause is also important. So out of this only one question is the one that is not expected others are easy to answer as well. Now coming to the next question, they wanted to examine whether the ROC can issue a certificate of satisfaction of charge in relation to this one charge that has been created. So one company has created a charge for one single uh charge, one single loan, they have attached two properties. Now they've paid 95 crores. They've taken a loan of 100 crores. Out of that 95 cr is paid off.

[00:05:52]Interest is also paid. They want to release one property from the charge. So should they apply for satisfaction or should they file for something else.

[00:05:59]Will the property be released or not is the question. So you have to apply the provisions of charge and answer whether modification or actual satisfaction.

[00:06:07]Next question is with respect to uh the dict declaration of the dividend.

[00:06:15]The company has earned a profit of 70 crores. They wanted to declare a dividend of 30% on paid up capital.

[00:06:21]While preparing financials, they did not make reserve of transfer of 10% to your reserves. Okay, general reserves. At the general meeting, the members have raised an objection saying that without doing that 10% of transfer to the reserves, you cannot give a uh you cannot declare the dividend. So whether the shareholders objection is justified or not. Is it mandatory for us to transfer that 10% to the general reserves before giving the final dividend? That is the question you have to decide the provisions and answer. Next, Ram Kant is a debenture holder. He's emailed to the company that he wants the uh register of members of the company within 5 days and the company has said that you give us 25 rupees per page and give us 15 days to give you the details whether the request of the company is valid or not. Right?

[00:07:03]Whether they can charge money and what is the duration of giving the register of members and can that register of members actually be given to the debenture holder or not. These are the questions you have to answer and if you have studied the concept of register of members not difficult to answer.

[00:07:15]Next coming to the provisions of um allotment of shares on preferential basis. What is the timeline of completing that? Very simple direct theory question. Even the next question is direct simple simple theory question.

[00:07:28]In case you're going to uh all lot shares on preferential basis which will be given an option of converting into equity shares. How are you going to determine the price of such equity shares?

[00:07:39]Direct theory question. So preferential allotment if you have studied you should be able to answer that question as well.

[00:07:44]Next question is with respect to um the timeline of making entry into register of members. Within how many days of four feature of shares are you required to enter the details in the register of members and uh the register of members is signed by the chief financial officer because the company was not under a requirement of having a company secretary. They don't qualify the thresholds of appointing a mandatory CS. So the CFO has certified the register of members whether it is valid or not. So if you know the provisions of all the provisions that they have tested in hypothetical cases are simple provisions.

[00:08:20]Next the board of directors of the company has observed that one of the member has indulged in an activity that is detrimental to the interest of the company. And in the articles of association there is a clause that the board of directors can expel the members who are doing anything detrimental to the interest of the company. Using that power the board of directors have passed a resolution directing that that person member samp should be expelled from membership. Uh you should examine the validity of the board resolution that is b passed by the company whether that resolution is correct or not. So this is from the chapter on powers of board of directors as well as expulsion of members combining two chapters. Next uh a company wanted to accept deposits.

[00:09:02]They've given you a lot of situations, lot of figures with respect to uh the requirement and you just have to say whether the company is permitted to accept deposits of 50 cr rupees from its members. So it is eligibility criteria that you have to uh see and the quantum of deposit that you can accept on the basis of the figures that they have given. You have to do the uh you know analysis and give them the answer. So again it is based on the basics of who which company is eligible to uh issue deposits and what is the threshold limit. That is the concept that is being tested here. Next two situations they have given two people they have given one is Pimla she's indebted to in intense finance corporations for 95,000 and there is Perma who is a sister of Pratik and Pratik is employed in that one company. Now you should tell whether this Pimal Parimal and Parma can be appointed as debenture holders for that company or not debt instruments from your chapter on debt instruments. Next, can a debenture trustee be removed from office before the expiry of term? That is the question. If yes, a casual vacancy is going to be created. How are you going to fill up the casual vacancy? So, these two points you're required to answer.

[00:10:11]Two questions are asked within the same question. So, each of the question is going to carry only one mark. So, you don't have to write the answer in detail. Just say yes or no and give the justification for the same. Next uh the company's unable to redeem the preference shares uh and also it has outstanding dividend payable and on the day due date they said that they don't have cash resources for the payment of uh redemption of shares as well as payment of the outstanding dividend. Now tell what is the option available for the company how they can redeem these preference shares without reducing the share capital of the company. So that is one provision. So if you've studied the chapter on share and share capital with respect to redemption of preference shares you should be able to answer again it's one one small paragraph out of the book that they have selected and chosen a question on. So every uh page every sentence every paragraph in your book is important. You cannot do selective studying. You have to study everything from the material. Next you are a senior partner of that is not important. What is important to us?

[00:11:10]There is a director who has approached you uh to know whether the internal audit is going to be applicable to the company or not. They've given us the threshold for three different companies.

[00:11:20]You should tell whether the internal audit provisions will be applicable to the company or not. It is a question from the chapter auditors. So what is the criteria when internal audit becomes compulsory for companies? That is what is being tested here. So you have to give them what is the criteria and then do comparison with the figures that have been given here. Right? Just mentioning the criteria will not fetch you full marks. First give them the provision of law and then do the comparison of the figures that are given here and then give a conclusion whether the internal audit will be applicable or not applicable. It's for five marks. So you have to give in detail. Next, the audited financial statements of Joe Limited is provided here. The company is planning to uh issue or declare an interim dividend and 5 rupees per share.

[00:12:03]The company in the previous year three previous three years has given 10% 12% 8%. The board now wants to understand whether it they are s they can go ahead and declare the interim dividend or not.

[00:12:13]So you have to discuss the provisions with respect to interim dividend. What are the things that you should take into consideration the average of previous three years for that they have given you the data. So you give them the law what is the criteria for issuing and declaring interim dividend. Then you do the analysis of this and then give the conclusion of whether they should go ahead and declare or they cannot declare. Next alternative question is uh there was a continuous disruption in operations because of various reasons and uh the company is under losses. So they have uh want they are wanting to enter into a compromise with the creditors of the company where they want the creditors to let go 40% of the debt that they owe and the creditors are objecting to this compromise that the company wants to arrange. So the you have to discuss what are the facts that are required to be disclosed in the FDOT while proposing the scheme of arrangement or compromise with the creditors. So you have to give the list of items that are required to be disclosed by the applicant company while proposing an uh arrangement or compromise with the creditors. Next they've given the certain situations.

[00:13:19]It's about buyback provisions. The company is considering to do the buyback without using the proceeds from shares or other securities.

[00:13:28]What is the maximum quantum of buyback that can be done? We know the limit is 25%, but you have to do the calculation on the basis of whatever information is given. You should give the exact amount of what uh how much buyback can be done by this company in the given situation.

[00:13:42]Now, so again that is calculation based you should be able to calculate. So if you see a lot of numericals have been asked where you're required to uh decide like how much quantum of buyback is required interim uh dividend whether it can be given or not based on the threshold limits. So a lot of numericals have been tested here. Next two companies they have given hipcom limited and admenta private limited. They want to understand if these two companies are associate company. So it is a question from lesson number one or two where the definition of associate company is given. So you should just apply the definition and say whether these two companies will classify as associated companies or not based on the transaction that have been provided.

[00:14:22]Next is a theory question. List out the situation where a company is liable for the act of the employees. It's a question from the doctrine of ultravirus. So uh that is a theory question. Now coming to part two of the question paper. They've given a long hypothetical situation case with multiple situation. Every situation is going to be followed by a sub question.

[00:14:43]The first question is with respect to uh the appointment of a non-executive director and the depth of non-executive director in place of whom casual vacancy was created. Another director was appointed for further period of 3 years.

[00:14:57]Subsequent at the AGM the propo the no appointment of that non-executive director who was appointed to fill the casual vacancy was not proposed before the AGM. So now they are saying that the non proposal of his appointment before the AGM is not valid. So there is some kind of non-compliance with respect to uh the appointment of this non-executive director who has replaced the existing non-executive director on the basis of his death casual vacancy. So whether there is a compliance or not you're required to say. Next is articles of association said that um maximum 12 directors should be there but the company only has 10 directors out of whom two people are representing foreign directors and alternative directors are there uh in the board. Now they want to discuss the uh issue of right shares was attended by the the matter for discussion was about uh rights issue and it was attended only by four directors including the two alternate directors.

[00:15:52]So it's a question that is going to be in relation to quorum total articles requires 12 but the company has 10 out of 10 four have attended out of which out of the four two of them are alternate directors. So you should determine whether the quorum is there or not there in the board meeting. Next they've given a long uh details we'll see for what it is. I think they they will ask you to calculate uh the net asset for the pay purpose of paying uh the key managerial remineration. Next is the company has its annual general meeting on some day.

[00:16:28]Uh the meeting was postponed by the chairperson but the members did not agree for the adjournment. There was certain unfinished business. uh they've given the situation let's see what is going to the question in a separate issue within was a director who was uh possessing two directors identification number so I think you should give them the remedy so now first one is examine if there is non-compliance with respect to uh no filling of the casual vacancy of a non-executive director and thereafter is it required to propose it before the AGM second one analyze the quorum out of 10 four were present out of the four two were alternative directors so whether cororum is present or not present company's net profit you're required to calculate for the purpose of payment of managial remineration.

[00:17:10]Right? So for that they've given you a calculation based question. So you have two calculation based question. One is buyback and one is net asset for the purpose of your net profit for the purpose of calculating the managial remission. Now next question is comment on the action of the chairperson on the secretary standard. What would be the implication if the no quorum uh in the adjourned meeting is there? So if the meeting is going to be adjourned and in the adjourned meeting nobody comes because none of the members had agreed for adjournment. So if nobody comes or nobody turns up in the aar meeting what is going to be the consequence what is going to be the outcome according to the secretary standards it's a theory based question that you're required to write in a separate case advise within so he has two director's identification number now what is he required to do you have to surrender one day you briefly it is for two marks so you don't have to give the entire procedure of surrender but tell them what how we are going to do the surrender next last question six or 6 a um again here they have said that there is one director who was going abroad for 4 years 4 months and in place of him he's given a alternative Kushbu who was not a director once the original director left the country he traveled abroad the chairperson of the meeting did not allow the alternate director to come and attend the meeting is the valid if is the act of the chairman valid or not again the answer is clearcut and you also are required to draft a specimen board resolution for appointing a person in replacing a person who is going abroad for more than 3 months. So, alternate director appointment, you're required to draft a resolution.

[00:18:40]Next, again, it is a drafting based question where you're required to draft a board resolution for opening a uh FC bank account and authorizing the directors to do all the necessary acts for the purpose of opening that bank account. It is for five marks. So, you have to draft the resolution. Next, board of directors of the companies intending to take approval from members for consolidation of the shares. You're required to send a notice for attending of that general meeting where they're proposing the consolidation of the shares. You should also uh cover all the other incidental matters. So only one agend one uh agenda cannot be there. So in the notice you should be careful of adding other necessary incidental matters. Now again that is a drafting based question. So everything that you're seeing under question number six is predominantly drafting based.

[00:19:28]All the questions are drafting based.

[00:19:30]Next, due to urgency, uh the company has decided to pass a board resolution by circulation and not by calling the general meet uh board meeting and they wanted to discuss uh the approval of a raw material purchase agreement with the party who is not a related party transaction. company has nine directors out of which three of the directors are interested and two nonex non-interested directors have requested that we don't want to pass it by circulation but we want to pass it in a validly held board meeting. Now you are required to examine whether it is mandatory for the chairperson to call for a physical board meeting or by circulation itself you can pass and you also have to draft the circulation resolution passed by the board of directors for approving the raw material supply transaction between the supplier and the company. So again it is a drafting of a specimen circular resolution.

[00:20:20]Next. So all the questions under question six are drafting based equal emphasis like previous attempt they have given a lot of weightage to the drafting. Next coming to the last question optional question 6A.

[00:20:33]Uh you are required to explain the provisions of compensation of loss of office for managing director under 2.2 to and discuss whether in this uh discuss the case where no compensation is payable. So this is a theory question nothing to do with the case study. But the second sub question is based on the case study where they're asking that Salem was a director who's been appointed as a managing director for 5 years but after 2 years only he's after 3 years he's resigned from office and after resignation for two years compensation of loss of office he's claiming. So whether his claim is valid or not you're required to there. So based on the same provision 2 not two.

[00:21:11]Next next question is for five marks but it has five sub questions. So it's one mark each where required to talk about social uh corporate social responsibility. First one is composition of the committee. Second one is quorum of the committee. Third one is functions of the committee. Fourth one is number of committee meetings that are required to be done and who should be the chairperson of the CSR committees. So everything is relation to CSR. It was clubbed. CSR chapter as such was totally deleted but that concept of CSR was added to the chapter on uh annual returns and reports. So from that chapter this is being asked you cannot say that they've deleted the chapter on CSR. Clear-cut instruction was there in the material that it is going to be added to the next chapter that is annual returns and uh reports. Next uh customer wanted to apply in writing to inspect the latest annual returns and extracts of the company. the company rejected the application saying that he's neither the member nor a debenture holder of the company. So he cannot uh no get the uh inspection.

[00:22:10]He now is asking what is the remedy from the central government and he wants to know what is the value of the copies of annual return. Advise as a company secretary advise him what is the value of these annual returns and what is the remedy available when the company itself has rejected its application. again from the same chart. Now coming to Rohit as he's applied uh uh to IIC for inclusion of his name in the database of independent directors. He's been working in unlisted public companies having paid a capital of uh 10 crores for more than seven years. He is claiming that he does not have to apply for the uh proficiency test or the test for qualifying as independent director for the name to be entered in the database on the requirement that he already has an experience of working in as a director in a company which has a a paid up capital of more than uh uh 10 crores in unlisted companies. So you have to examine whether his contention is correct or not. So you know that mandatory there is a requirement of independent directors to undergo a test only if they qualify their name will be entered in the database. uh but there are certain exclusion a few people are excluded from making uh from writing that online proficiency test. So you should determine whether he is uh coming under the exclusion or not and whether he will be eligible for being included in the database or not without writing the online proficiency test. So it's a direct theory a question based on the exclusion of uh eligibility for the purpose of writing the proficiency test.

[00:23:32]So this is the question paper of company law that you have just written today. So let's get to the analysis of the question paper. First and foremost we know that uh like previous time question six is based on drafting. Even now question six is being based on drafting.

[00:23:46]Close to 13 to 15 marks of question is being asked only from drafting of resolutions, notice uh agenda and those things. So important high value. So students uh at executive level are required to know drafting. Next lengy.

[00:23:59]Yes definitely it is lengy. to have a lot of drafting to do plus you also have other questions which are for five marks and you have to give them the provisions of law before connecting with the facts.

[00:24:09]So yes it is lengy it'll be challenging for completing uh the question paper within the given duration of 3 hours.

[00:24:15]Calculation based questions have been asked with respect to calculating your net profit for managial remuneration or calculating the 25% of buyback that is maximum buyback provisions. So a lot of numerical uh uh problems have been given in this attempt. Interpretation based questions though you have major interpretation based question but all of them are direct. Just by reading the question you know which chapter it is and what is the concept that is being tested. So the questions as such are not difficult. If you've prepared well you can answer the case study based questions. Lastly the institute has covered full syllabus. They've asked questions even from nuke and corner of the book like just just like an example the capacity to sue and be sued a case law small case is there in your book from that one small paragraph they framed a case study based question right so the clear um message to the students is that don't do selective studying the institute expects you to study everything from the material so read everything that has been provided also what you should keep in mind is the institute is also very clear that whatever we are going to ask we going to ask within the ambit of the syllabus that has been provided. None of the questions that are there in the question paper are external or that is not there within the syllabus or it is not there in the ICSI book. Everything is from within the syllabus. So two takeaways you should keep in mind that 100% is going to be from within the ICSI module itself. So you have to read that book like a bible and second one they are going to cover the entire uh syllabus. So from every chapter they are going to ask questions. So every line becomes important. So that much dedicated level of preparation is expected by the institute. Nevertheless, however the exam has gone today. Forget what has happened today but you have still a few more exams to go.

[00:26:02]Concentrate on that. Give your best and let us know in the comments how did you do in the company law paper? Which was your favorite question? Which was the question that you found of why has institute given this question. I will read your comments and revert back to you. All the best for the rem remaining exams.