Chapter 7: Management and Administration - Test 5: answer key

Question 1 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Anekta Garments Ltd. is a public company with 500 members. On 10 August 2026, ten members holding 12% of the paid-up share capital requisitioned the Board to circulate a resolution for the appointment of Mr. Ravi as a director. They deposited the requisition at the registered office on the same day, along with a sum of ₹15,000 to meet expenses. The AGM is scheduled for 25 September 2026. The company refused to circulate the resolution, stating that it is defamatory. Meanwhile, another member, Mr. Suresh, holding 2% of the total voting power, gave special notice to the company on 5 September 2026 for a resolution to remove Mr. Anil, a director. The company sent notice of this resolution to members on 15 September 2026. The AGM was held on 25 September 2026. A special resolution for alteration of the Articles of Association was passed with 65% votes in favour, 25% against, and 10% abstaining. The Chairman declared the special resolution as passed. The minutes of the AGM were recorded on 30 October 2026. The company filed Form MGT-14 for the special resolution on 20 November 2026.

Was the requisition by the ten members for circulation of the resolution validly deposited under Section 111 of the Companies Act, 2013?

1. No, because the requisition must be deposited at least 2 weeks before the AGM.
2. No, because the members hold only 12% of paid-up capital, which is less than the required 1/5th.
3. Yes, but only if the company approves the resolution.
4. Yes, because it was deposited more than 6 weeks before the AGM and expenses were deposited. (correct answer)

Answer: D — Yes, because it was deposited more than 6 weeks before the AGM and expenses were deposited.

Explanation. Section 111(2)(c) requires a requisition for notice of a resolution to be deposited at the registered office not less than six weeks before the meeting. 10 August to 25 September is 46 days, which is more than six weeks. The requisitionists also deposited ₹15,000 towards expenses. Therefore, the deposit is valid.

Where it goes wrong. Students may confuse the six-week period for notice of resolution with the two-week period for other resolutions, or may wrongly think that 1/5th shareholding is required.

Authority. Section 111(2)(c) of the Companies Act, 2013

Question 2 · 2 marks · Chapter 7: Management and Administration · hard

Can the company refuse to circulate the members' resolution on the ground that it is defamatory?

1. Yes, if the Board is of the opinion that it is defamatory.
2. Yes, but only after obtaining approval of the Tribunal.
3. No, unless the Central Government, on application, declares that the rights are being abused. (correct answer)
4. No, because defamation is not a ground for refusal under any circumstances.

Answer: C — No, unless the Central Government, on application, declares that the rights are being abused.

Explanation. Section 111(3) provides that the company shall not be bound to circulate a statement if, on an application by the company or any aggrieved person, the Central Government declares that the rights conferred are being abused to secure needless publicity for defamatory matter. The company cannot unilaterally refuse; it must obtain a Central Government order.

Where it goes wrong. Students may think the Board can decide on its own or that Tribunal approval is required, whereas the statute specifically requires a Central Government declaration.

Authority. Section 111(3) of the Companies Act, 2013

Question 3 · 2 marks · Chapter 7: Management and Administration · hard

Was the special notice given by Mr. Suresh for removal of director Mr. Anil valid, and did the company comply with the notice requirement?

1. Valid special notice, and company's notice to members was timely as it was given at least 7 days before the meeting. (correct answer)
2. Valid special notice, but company's notice to members was late as it should have been given at least 14 days before the meeting.
3. Invalid special notice because Mr. Suresh held only 2% of voting power, which is less than the required 5%.
4. Invalid special notice because it was given only 20 days before the meeting, while 30 days is required.

Answer: A — Valid special notice, and company's notice to members was timely as it was given at least 7 days before the meeting.

Explanation. Special notice requires members holding at least 1% of total voting power or shares on which an aggregate sum not exceeding ₹5 lakh has been paid up. Mr. Suresh holds 2%, so the notice is valid. It must be given to the company at least 14 days before the meeting; 5 September to 25 September is 20 days. The company must give notice to members at least 7 days before the meeting; 15 September to 25 September is 10 days, which is timely.

Where it goes wrong. Students may confuse the 1% threshold with a 5% threshold, or the 14-day and 7-day periods with other timelines.

Authority. Section 115 of the Companies Act, 2013; Rule 23 of the Companies (Management and Administration) Rules, 2014

Question 4 · 2 marks · Chapter 7: Management and Administration · hard

Was the special resolution for alteration of Articles of Association validly passed?

1. Yes, because 65% votes in favour exceed 50% of votes cast.
2. No, because the votes in favour were not at least three times the votes against. (correct answer)
3. Yes, because the Chairman declared it passed, which is conclusive.
4. No, because 10% of members abstained, reducing the majority.

Answer: B — No, because the votes in favour were not at least three times the votes against.

Explanation. A special resolution requires the votes cast in favour to be not less than three times the number of votes cast against. Here, 65 votes in favour and 25 against gives a ratio of 2.6, which is less than 3. Therefore, the resolution was not validly passed as a special resolution. The Chairman’s declaration does not cure the substantive defect.

Where it goes wrong. Students may apply a simple majority test or treat abstentions as votes against, or assume the Chairman’s declaration is conclusive.

Authority. Section 114(2) of the Companies Act, 2013

Question 5 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Zenith Agro Tech Pvt Ltd. is a private company with 150 members. Its AGM was held on 30 September 2026. A special resolution for buy-back of shares was passed with 70% votes in favour, 20% against, and 10% abstaining. The Chairman declared the resolution as passed. Another resolution for appointment of an auditor other than the retiring auditor was passed without giving special notice. The AGM was adjourned to 15 October 2026 due to lack of quorum, and a resolution for alteration of the object clause was passed on that date. The minutes of the AGM were entered in the minutes book on 5 November 2026. The company filed Form MGT-14 for the buy-back resolution on 25 October 2026, but did not file any form for the resolution passed at the adjourned meeting. The company also did not file any form for the auditor appointment resolution.

Was the special resolution for buy-back of shares validly passed?

1. Yes, because 70% is more than three times 20% (70/20=3.5). (correct answer)
2. Yes, because 70% votes in favour are more than 50% of votes cast.
3. No, because the votes in favour were not at least three times the votes against.
4. No, because a private company cannot pass a special resolution for buy-back.

Answer: A — Yes, because 70% is more than three times 20% (70/20=3.5).

Explanation. A special resolution requires votes in favour to be at least three times the votes against. 70% in favour and 20% against gives a ratio of 3.5, which satisfies the requirement. The notice must have specified the intention to propose it as a special resolution, which is assumed. Therefore, the resolution is valid.

Where it goes wrong. Students may think a simple majority is enough or miscalculate the ratio; private companies are not prohibited from buy-back by special resolution.

Authority. Section 114(2) of the Companies Act, 2013

Question 6 · 2 marks · Chapter 7: Management and Administration · hard

Was the appointment of the auditor other than the retiring auditor valid without special notice?

1. Yes, because the Board can appoint auditors without special notice.
2. Yes, if the appointment is approved by the members by simple majority.
3. No, because Section 140(4) requires special notice for such appointment. (correct answer)
4. No, because only the Central Government can appoint auditors.

Answer: C — No, because Section 140(4) requires special notice for such appointment.

Explanation. Section 140(4) requires special notice for a resolution to appoint an auditor other than the retiring auditor or to provide that the retiring auditor shall not be re-appointed. Without special notice, the resolution is invalid. A simple majority does not cure the absence of special notice.

Where it goes wrong. Students may think an ordinary resolution with simple majority is sufficient, overlooking the mandatory special notice requirement.

Authority. Section 115 of the Companies Act, 2013; Section 140(4) of the Companies Act, 2013

Question 7 · 2 marks · Chapter 7: Management and Administration · hard

On what date is the resolution for alteration of the object clause, passed at the adjourned meeting on 15 October 2026, deemed to have been passed?

1. 30 September 2026 (original meeting date).
2. The date of filing with the ROC.
3. The date of the Chairman's declaration.
4. 15 October 2026 (adjourned meeting date). (correct answer)

Answer: D — 15 October 2026 (adjourned meeting date).

Explanation. Section 116 provides that where a resolution is passed at an adjourned meeting of a company, the resolution shall be treated as having been passed on the day on which it was actually passed and not on any earlier date. Therefore, the resolution is deemed passed on 15 October 2026.

Where it goes wrong. Students may think the resolution relates back to the original meeting date or the date of the Chairman’s declaration.

Authority. Section 116 of the Companies Act, 2013

Question 8 · 2 marks · Chapter 7: Management and Administration · hard

What is the penalty for the company and its officers for the delay in entering the minutes of the AGM, which were recorded on 5 November 2026 for a meeting held on 30 September 2026?

1. Company: ₹25,000; Officer: ₹5,000. (correct answer)
2. Company: ₹10,000; Officer: ₹1,000.
3. Company: ₹50,000; Officer: ₹10,000.
4. Company: ₹5,000; Officer: ₹500.

Answer: A — Company: ₹25,000; Officer: ₹5,000.

Explanation. Section 118(11) provides that if default is made in complying with Section 118, the company shall be liable to a penalty of ₹25,000 and every officer of the company who is in default shall be liable to a penalty of ₹5,000. The minutes were entered 36 days after the meeting, exceeding the 30-day limit.

Where it goes wrong. Students may confuse the penalty with those under Section 117 or Section 119.

Authority. Section 118(11) of the Companies Act, 2013

Question 9 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Vayu Renewables Ltd. is a public company. Its AGM was held on 15 September 2026. The minutes of the AGM were entered in the minutes book on 10 October 2026. On 20 October 2026, a member, Mr. Mehta, requested inspection of the minutes book. The company allowed inspection after three days, but only for one hour on a working day, and also demanded a fee of ₹100. Mr. Mehta requested a copy of the minutes on 25 October 2026. The company provided the copy on 10 November 2026. On 1 November 2026, a director, Mr. Verma, tampered with the minutes of the AGM. Separately, a resolution was passed by postal ballot on 1 September 2026, and its minutes were entered in the minutes book on 20 October 2026.

Was the company's response to Mr. Mehta's request for inspection of the minutes book valid?

1. Yes, because the company allowed inspection within 3 days and charged a reasonable fee.
2. Yes, because inspection can be restricted to 1 hour if the company is busy.
3. No, because inspection must be allowed during business hours without charge and for at least 2 hours each business day. (correct answer)
4. No, because inspection can only be allowed with the prior approval of the Tribunal.

Answer: C — No, because inspection must be allowed during business hours without charge and for at least 2 hours each business day.

Explanation. Section 119(1) requires the minutes book to be open for inspection during business hours by any member without charge, subject to reasonable restrictions, but at least two hours each business day must be allowed. Charging a fee and limiting inspection to one hour is not valid.

Where it goes wrong. Students may think a fee can be charged or that the company can reduce the inspection time.

Authority. Section 119(1) of the Companies Act, 2013; Rule 14 of the Companies (Management and Administration) Rules, 2014

Question 10 · 2 marks · Chapter 7: Management and Administration · medium

Was the timeline for providing a copy of the minutes to Mr. Mehta valid?

1. Yes, because the copy was provided within 15 working days.
2. No, because the copy must be provided within 7 working days of the request. (correct answer)
3. Yes, because the company provided the copy within 30 days.
4. No, because the copy must be provided within 3 working days.

Answer: B — No, because the copy must be provided within 7 working days of the request.

Explanation. Section 119(2) requires the company to furnish a copy of the minutes within seven working days after the request is made. The request was made on 25 October 2026 and the copy was provided on 10 November 2026, which is beyond seven working days.

Where it goes wrong. Students may confuse the seven working days with fifteen or thirty days.

Authority. Section 119(2) of the Companies Act, 2013

Question 11 · 2 marks · Chapter 7: Management and Administration · hard

What is the punishment for tampering with the minutes of the AGM by Mr. Verma?

1. Imprisonment up to 6 months and fine up to ₹50,000.
2. Only fine of ₹10,000.
3. Imprisonment up to 5 years and fine up to ₹5 lakh.
4. Imprisonment up to 2 years and fine of not less than ₹25,000 but may extend to ₹1,00,000. (correct answer)

Answer: D — Imprisonment up to 2 years and fine of not less than ₹25,000 but may extend to ₹1,00,000.

Explanation. Section 118(11) provides that if any person is found guilty of tampering with the minutes of the proceedings of a meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than ₹25,000 but which may extend to ₹1,00,000.

Where it goes wrong. Students may underestimate the imprisonment period or the fine amount.

Authority. Section 118(11) of the Companies Act, 2013

Question 12 · 2 marks · Chapter 7: Management and Administration · medium

Was the entry of the minutes for the resolution passed by postal ballot on 1 September 2026, recorded on 20 October 2026, within the prescribed time?

1. No, because it must be recorded within 30 days from the date of passing the resolution. (correct answer)
2. Yes, because it was recorded within 60 days.
3. Yes, because postal ballot resolutions have no time limit.
4. No, because it must be recorded within 7 days.

Answer: A — No, because it must be recorded within 30 days from the date of passing the resolution.

Explanation. Section 118(1) requires minutes of a resolution passed by postal ballot to be recorded within 30 days from the date of passing the resolution. 1 September to 20 October is 49 days, which exceeds the 30-day limit.

Where it goes wrong. Students may think the limit is 60 days or that postal ballot resolutions are exempt from the 30-day rule.

Authority. Section 118(1) of the Companies Act, 2013

Question 13 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. Prakash Metals Ltd. is an unlisted public company. Its Board meeting was held on 1 August 2026. The minutes of the Board meeting were entered on 25 August 2026 and signed by the Chairman of the next Board meeting held on 5 September 2026. The AGM was held on 20 September 2026. A special resolution for alteration of objects was passed with 80% votes in favour, 15% against, and 5% abstaining. The company filed Form MGT-14 for this special resolution on 15 October 2026. The Board, at its meeting on 1 August 2026, passed a resolution appointing Mr. Raj as the Managing Director. No Form MGT-14 was filed for this Board resolution. On 1 September 2026, a member holding 2% of the total voting power gave special notice to the company for removal of the auditor. The company did not send any notice to members regarding this special notice.

Was the special resolution for alteration of objects validly passed?

1. Yes, because 80% votes in favour exceed 50% of votes cast.
2. No, because 5% abstained, so the majority is reduced.
3. Yes, because the votes in favour are at least three times the votes against (80/15=5.33). (correct answer)
4. No, because the resolution required unanimous approval.

Answer: C — Yes, because the votes in favour are at least three times the votes against (80/15=5.33).

Explanation. A special resolution requires votes in favour to be at least three times the votes against. 80% in favour and 15% against gives a ratio of 5.33, which is greater than 3. Therefore, the resolution is validly passed. Abstentions are not counted as votes cast.

Where it goes wrong. Students may apply a simple majority test or wrongly treat abstentions as votes against.

Authority. Section 114(2) of the Companies Act, 2013

Question 14 · 2 marks · Chapter 7: Management and Administration · hard

Did the company need to file Form MGT-14 for the Board resolution appointing Mr. Raj as Managing Director?

1. No, because Board resolutions are not required to be filed with the ROC.
2. Yes, because Section 117(3)(c) requires filing of board resolution relating to appointment of a managing director within 30 days. (correct answer)
3. No, because the appointment was by the Board, not members.
4. Yes, but only if the appointment was for more than one year.

Answer: B — Yes, because Section 117(3)(c) requires filing of board resolution relating to appointment of a managing director within 30 days.

Explanation. Section 117(3)(c) requires a copy of every resolution of the Board relating to the appointment, re-appointment, or variation of terms of appointment of a managing director to be filed with the Registrar within 30 days. The company failed to file, attracting penalty under Section 117(2).

Where it goes wrong. Students may think only special resolutions need filing, overlooking the specific requirement for managing director appointments.

Authority. Section 117(3)(c) of the Companies Act, 2013

Question 15 · 2 marks · Chapter 7: Management and Administration · medium

Was the special notice given by the member on 1 September 2026 for removal of auditor valid?

1. No, because special notice must be given at least 21 days before the meeting.
2. Yes, but only if the member holds more than 5% of voting power.
3. No, because removal of auditor requires approval of the Tribunal.
4. Yes, because it was given at least 14 days before the AGM on 20 September 2026. (correct answer)

Answer: D — Yes, because it was given at least 14 days before the AGM on 20 September 2026.

Explanation. Special notice must be given to the company at least 14 days before the meeting. 1 September to 20 September is 19 days, which is valid. The member holds 2% of total voting power, exceeding the 1% threshold. Therefore, the special notice is valid.

Where it goes wrong. Students may confuse the 14-day period with 21 days or think a higher shareholding is required.

Authority. Section 115 of the Companies Act, 2013; Rule 23 of the Companies (Management and Administration) Rules, 2014

Question 16 · 2 marks · Chapter 7: Management and Administration · medium

Was the signing of the Board minutes by the Chairman of the next Board meeting valid?

1. Yes, because Rule 25 permits the chairman of the same meeting or the chairman of the next succeeding meeting to sign the minutes. (correct answer)
2. No, because only the chairman of the same meeting can sign the minutes.
3. Yes, but only if the Board passes a resolution authorizing him.
4. No, because minutes must be signed by all directors present.

Answer: A — Yes, because Rule 25 permits the chairman of the same meeting or the chairman of the next succeeding meeting to sign the minutes.

Explanation. Rule 25(1)(b)(i) provides that minutes of a Board meeting shall be signed by the chairman of the same meeting or the chairman of the next succeeding meeting. Therefore, the signing by the Chairman of the next Board meeting is valid.

Where it goes wrong. Students may think only the chairman of the same meeting can sign, or that all directors must sign.

Authority. Rule 25(1)(b)(i) of the Companies (Management and Administration) Rules, 2014

Question 17 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. A company received a requisition from members holding 1/10th of paid-up capital to circulate a resolution for the AGM on 31 December 2026. The requisition was deposited on 1 November 2026. Is the deposit timely?

A company received a requisition from members holding 1/10th of paid-up capital to circulate a resolution for the AGM on 31 December 2026. The requisition was deposited on 1 November 2026. Is the deposit timely?

1. No, because it must be deposited at least 2 weeks before the meeting.
2. No, because it must be deposited at least 3 months before the meeting.
3. Yes, because it is more than 6 weeks before the meeting. (correct answer)
4. Yes, but only if the members hold 1/5th of paid-up capital.

Answer: C — Yes, because it is more than 6 weeks before the meeting.

Explanation. For a requisition requiring notice of a resolution, Section 111(2)(c) requires it to be deposited at least six weeks before the meeting. 1 November to 31 December is 60 days, which exceeds six weeks. Therefore, the deposit is timely.

Where it goes wrong. Students may confuse the six-week period with the two-week period applicable to other resolutions.

Authority. Section 111(2)(c) of the Companies Act, 2013

Question 18 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. In a general meeting, a special resolution received 200 votes in favour, 70 against, and 30 abstentions. Was it passed?

In a general meeting, a special resolution received 200 votes in favour, 70 against, and 30 abstentions. Was it passed?

1. Yes, because 200 > 70.
2. No, because 200/70 = 2.86, less than 3. (correct answer)
3. Yes, because abstentions are ignored and 200 > 70.
4. No, because 30 abstentions count as against.

Answer: B — No, because 200/70 = 2.86, less than 3.

Explanation. A special resolution requires the votes in favour to be at least three times the votes against. 200/70 = 2.86, which is less than 3. Therefore, the resolution is not passed. Abstentions are not counted as votes cast.

Where it goes wrong. Students may apply a simple majority test or incorrectly treat abstentions as votes against.

Authority. Section 114(2) of the Companies Act, 2013

Question 19 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. A member holding 0.8% of total voting power and shares on which ₹4,50,000 has been paid up gives special notice. Is it valid?

A member holding 0.8% of total voting power and shares on which ₹4,50,000 has been paid up gives special notice. Is it valid?

1. Yes, because 0.8% is close to 1%.
2. Yes, because ₹4.5 lakh is close to ₹5 lakh.
3. No, because special notice requires 2% voting power.
4. No, because neither the 1% voting power nor the ₹5 lakh paid-up threshold is met. (correct answer)

Answer: D — No, because neither the 1% voting power nor the ₹5 lakh paid-up threshold is met.

Explanation. Section 115 requires special notice to be given by members holding not less than 1% of the total voting power or shares on which an aggregate sum not exceeding ₹5 lakh has been paid up. The member holds only 0.8% voting power and ₹4.5 lakh paid-up, failing both thresholds. Therefore, the special notice is invalid.

Where it goes wrong. Students may round up the percentages or amounts, or think either threshold is sufficient if close.

Authority. Section 115 of the Companies Act, 2013

Question 20 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. A company passed a special resolution on 1 March 2026 and filed Form MGT-14 on 5 April 2026. What is the penalty for the company?

A company passed a special resolution on 1 March 2026 and filed Form MGT-14 on 5 April 2026. What is the penalty for the company?

1. ₹10,000 plus ₹100 per day for 5 days, total ₹10,500. (correct answer)
2. ₹25,000 plus ₹500 per day for 5 days, total ₹27,500.
3. ₹5,000 plus ₹50 per day for 5 days, total ₹5,250.
4. No penalty if filed within 45 days.

Answer: A — ₹10,000 plus ₹100 per day for 5 days, total ₹10,500.

Explanation. Section 117(2) imposes a penalty of ₹10,000 and a further penalty of ₹100 per day after the first during which the failure continues, subject to a maximum of ₹2 lakh. The delay is 5 days (1 April to 5 April). Therefore, the penalty is ₹10,000 + (5 × ₹100) = ₹10,500.

Where it goes wrong. Students may use the wrong base amount or daily penalty, or think a 45-day grace period applies.

Authority. Section 117(2) of the Companies Act, 2013

Question 21 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. An AGM was held on 1 June 2026. Minutes were entered on 2 July 2026. What is the penalty on the company?

An AGM was held on 1 June 2026. Minutes were entered on 2 July 2026. What is the penalty on the company?

1. ₹10,000.
2. ₹5,000.
3. ₹25,000. (correct answer)
4. ₹50,000.

Answer: C — ₹25,000.

Explanation. Section 118(11) provides that for default in complying with Section 118 (minutes not entered within 30 days), the company is liable to a penalty of ₹25,000 and every officer in default is liable to ₹5,000. The minutes were entered 31 days after the meeting, exceeding the 30-day limit.

Where it goes wrong. Students may confuse the penalty with the ₹10,000 penalty under Section 117 or the ₹5,000 officer penalty.

Authority. Section 118(11) of the Companies Act, 2013

Question 22 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. A company allows inspection of minutes book only for 1 hour on a working day and charges ₹100 as fee. Is this valid?

A company allows inspection of minutes book only for 1 hour on a working day and charges ₹100 as fee. Is this valid?

1. Yes, because the company can prescribe reasonable restrictions.
2. No, because inspection must be allowed for at least 2 hours each business day without charge. (correct answer)
3. Yes, because fee can be charged for inspection.
4. No, because inspection must be allowed for 4 hours.

Answer: B — No, because inspection must be allowed for at least 2 hours each business day without charge.

Explanation. Section 119(1) requires the minutes book to be open for inspection during business hours by members without charge, subject to reasonable restrictions, but at least two hours each business day must be allowed. Charging a fee and limiting inspection to one hour is invalid.

Where it goes wrong. Students may think a fee can be charged or that one hour is sufficient.

Authority. Section 119(1) of the Companies Act, 2013; Rule 14 of the Companies (Management and Administration) Rules, 2014

Question 23 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. What is the punishment for tampering with minutes of a meeting?

What is the punishment for tampering with minutes of a meeting?

1. Imprisonment up to 6 months and fine up to ₹50,000.
2. Fine of ₹10,000 only.
3. Imprisonment up to 5 years and fine up to ₹5 lakh.
4. Imprisonment up to 2 years and fine of not less than ₹25,000 but may extend to ₹1,00,000. (correct answer)

Answer: D — Imprisonment up to 2 years and fine of not less than ₹25,000 but may extend to ₹1,00,000.

Explanation. Section 118(11) provides that tampering with minutes is punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than ₹25,000 but which may extend to ₹1,00,000.

Where it goes wrong. Students may underestimate the imprisonment period or the fine amount.

Authority. Section 118(11) of the Companies Act, 2013

Question 24 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. A resolution was passed at an adjourned AGM held on 15 October 2026. The original AGM was held on 30 September 2026. On what date is the resolution deemed to have been passed?

A resolution was passed at an adjourned AGM held on 15 October 2026. The original AGM was held on 30 September 2026. On what date is the resolution deemed to have been passed?

1. 15 October 2026. (correct answer)
2. 30 September 2026.
3. The date of filing with ROC.
4. The date of the Chairman's signature on minutes.

Answer: A — 15 October 2026.

Explanation. Section 116 provides that a resolution passed at an adjourned meeting is treated as passed on the day it was actually passed, i.e., 15 October 2026, and not on the date of the original meeting.

Where it goes wrong. Students may think the resolution relates back to the original meeting date or the date of filing.

Authority. Section 116 of the Companies Act, 2013

Question 25 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. A company receives a requisition from members to circulate a resolution. The company applies to the Central Government, which declares that the rights are being abused to secure needless publicity for defamatory matter. Can the company refuse to circulate the resolution?

A company receives a requisition from members to circulate a resolution. The company applies to the Central Government, which declares that the rights are being abused to secure needless publicity for defamatory matter. Can the company refuse to circulate the resolution?

1. No, because only the Tribunal can authorize refusal.
2. Yes, because the Central Government has declared so. (correct answer)
3. Yes, but only if the Board passes a resolution.
4. No, because defamatory matter must still be circulated.

Answer: B — Yes, because the Central Government has declared so.

Explanation. Section 111(3) provides that the company shall not be bound to circulate a statement if the Central Government, on application, declares that the rights conferred are being abused to secure needless publicity for defamatory matter. Therefore, the company can refuse to circulate the resolution.

Where it goes wrong. Students may think Tribunal approval is required or that the company cannot refuse circulation even with a Central Government declaration.

Authority. Section 111(3) of the Companies Act, 2013