Karnataka State Law (KSLU) University Previous Years Model Question Papers for LLB Second Semester – Company Law

The Karnataka State Law University LLB 2nd semester course requires a thorough understanding of corporate jurisprudence and statutory governance. This resource provides KSLU LLB question papers and Company Law model question papers covering company law essay questions, short notes, and problem-based exercises aligned with the corporate law examination syllabus KSLU across all five academic units.

Overview of KSLU LLB Company Law Examination Structure

The KSLU examination for Company Law tests both theoretical jurisprudence and practical problem-solving capabilities. Law students are expected to cite leading corporate law precedents, analyze relevant sections of company legislation, and demonstrate understanding of regulatory bodies such as the Securities and Exchange Board of India (SEBI) and the Competition Commission of India (CCI). Review our law colleges curriculum guide for comparative insights into university legal coursework.

UNIT I: Corporate Personality, Incorporation, and Constitutional Documents

Unit I focuses on the distinct legal personality of companies, pre-incorporation liabilities, and foundational constitutional documents.

Essay Questions

• Fundamental Clauses of Memorandum of Association: Explain the mandatory clauses contained in the Memorandum of Association (Name clause, Registered Office clause, Objects clause, Liability clause, and Capital clause) and discuss the statutory procedure for their alteration.
• Pre-Incorporation Contracts: "A company cannot be sued upon pre-incorporation contracts." Critically discuss this rule with reference to promoter liability and statutory relief under the Specific Relief Act.
• Doctrine of Ultra Vires: Critically examine the doctrine of Ultra Vires, its origin in English common law (Ashbury Railway Carriage v. Riche), and the legal consequences of ultra vires transactions on the company, directors, and third parties.
• Promoters: Role, Duties, and Liabilities: Who is a promoter? Discuss the fiduciary position of a promoter, the duty of full disclosure of secret profits, and the remedies available to a company against defaulting promoters.
• Doctrine of Lifting the Corporate Veil: Explain the concept of corporate personality established in Salomon v. Salomon & Co. Ltd., and examine the judicial and statutory exceptions where courts lift the corporate veil (e.g., fraud, tax evasion, enemy character).
• Conclusiveness of Certificate of Incorporation: "A certificate of incorporation is conclusive evidence that all the requirements of company law have been complied with." Explain the scope and limitations of this statutory principle.

Short Notes and Problem Questions

• Problem on Restrictive Covenants: "A" transferred certain land to "B" on the condition that "B" would never sell the land to colored persons. "B" subsequently transferred the land to a company formed exclusively of colored shareholders. "A" filed a suit for annulment of the conveyance. Advise the parties on whether "A" will succeed based on the separate entity principle.
• Problem on Dual Capacity and Compensation: "M" incorporated a company as Managing Director and appointed himself as chief pilot of the company. While piloting a flight on company business, he died in an accident. His widow claimed workers compensation. Advise whether the claim will succeed with reference to Lee v. Lee's Air Farming Ltd.
• Shifting Registered Office: A company with its registered office in Mumbai wishes to shift its registered office to Karnataka due to commercial reasons. Outline the procedural requirements and statutory approvals needed.
• Corporate Donations for Scientific Research: A company incorporated for chemical manufacturing distributed Rs. 50,000 to a university for scientific and educational research. Discuss the validity of such charitable donations.
• Insurable Interest of Shareholders: "A" holds 99% of shares in a timber company and insures the company timber in his personal name. The timber is destroyed by fire. Advise whether "A" can recover the loss from the insurer under the rule in Macaura v. Northern Assurance Co.

UNIT II: Articles of Association, Capital Raising, and General Meetings

Unit II covers corporate governance rules, prospectus liability, shareholder meetings, and internal management protections.

Essay Questions

• Binding Force of Articles of Association: Discuss the binding effect of the Articles of Association between the company and its members, between members inter se, and between the company and outsiders with reference to decided case laws.
• Classification of Company Meetings: Discuss the different types of meetings in a company, including statutory meetings, Annual General Meetings (AGM), and Extraordinary General Meetings (EGM).
• Requisites of a Valid Meeting: "Notice and Quorum are essential requisites of a valid general meeting." Elucidate the legal rules governing service of notice, explanatory statements, quorum calculations, and the consequences of procedural irregularities.
• Doctrine of Indoor Management: Explain the Rule in Royal British Bank v. Turquand (Doctrine of Indoor Management) along with its recognized exceptions, including knowledge of irregularity, suspicion of fraud, and acts outside apparent authority.

Short Notes and Problem Questions

• Rescission of Allotment for Misrepresentation: An allottee became aware of misrepresentation in a company prospectus in July but delayed applying for removal of his name from the register until December. Decide whether his delay defeats his right to rescind the contract.
• Defective Call Resolutions: The board of directors resolved to make a call on unpaid shares but omitted the specific payment date and amount in the resolutions. Determine the validity of the call.
• Declaration and Payment of Dividends: Explain the statutory rules regarding declaration of dividends out of profits and the prohibition against paying dividends out of capital.
• Removal of Directors and Breach of Articles: The articles of a company provided that "A" should remain a director until 2009. The shareholders removed him earlier through an ordinary resolution. Advise "A" regarding his claim for damages against the company.
• Deemed Prospectus and Public Advertisements: A company published an advertisement in a newspaper stating that shares were available according to a prospectus obtainable on application. Analyze whether this newspaper notice constitutes an offer to the public.

UNIT III: Corporate Securities, Share Allotment, Oppression, and Winding Up

Unit III examines debentures, share capital allotment rules, minority protection mechanisms, and court-supervised winding up.

Essay Questions

• Debentures and Floating Charges: Define a debenture, explain its core characteristics, and distinguish between fixed charges and floating charges with reference to crystallization events.
• Prevention of Oppression and Mismanagement: Discuss the statutory provisions empowering tribunals to grant relief against oppression of minority shareholders and mismanagement of corporate affairs under corporate legislation.
• Allotment of Shares: Explain the general contractual principles and statutory restrictions governing the valid allotment of shares, including minimum subscription and escrow deposits.
• Just and Equitable Ground for Winding Up: Analyze the "Just and Equitable" clause as a ground for winding up a company by the National Company Law Tribunal (NCLT) with reference to deadlocks, substratum loss, and domestic company partnership analogies.

Short Notes and Problem Questions

• Liability of Memorandum Subscriber: Santosh subscribed to the Memorandum for 200 shares. The company was registered, but only 20 shares were ever allotted. Upon liquidation, the liquidator demanded payment for all 200 shares. Advise Santosh on his statutory liability as a subscriber.
• Minor as Shareholder: "N", a minor, was registered as a shareholder. After attaining majority, "N" accepted dividend payments. When the company went into liquidation, "N" denied liability as a contributory. Decide the legal position.
• Individual Member Suits: A director refused to retire pursuant to the rotation clause in the Articles and continued in office illegally. Advise a member wishing to file a suit in his personal capacity to enforce corporate compliance.
• Creation of Charges on Future Assets: A film production company borrowed money by securing all existing and future studio equipment and cameras. Explain the nature and registration requirements of the charge created.

UNIT IV: Securities Regulation, SEBI Act 1992, and Stock Exchanges

Unit IV covers securities market oversight, regulatory enforcement, stock exchange governance, and appellate procedures.

Essay Questions

• Securities Appellate Tribunal (SAT): Explain the establishment, composition, jurisdiction, powers, and procedural rules of the Securities Appellate Tribunal under the SEBI Act, 1992.
• Regulatory and Investigative Powers of SEBI: Discuss the statutory powers of the Securities and Exchange Board of India (SEBI) to order investigations into intermediaries, inspect corporate records, and issue cease-and-desist directions to protect investor interests.
• Stock Exchanges and Bye-Laws: Define a recognized stock exchange under the Securities Contracts (Regulation) Act, 1956 (SCRA), explain the prohibition on unrecognized exchanges, and discuss the powers of stock exchanges to enact internal bye-laws.
• Penalties and Adjudication under SEBI Act: Enumerate the monetary penalties and civil sanctions that can be imposed under Chapter VI-A of the SEBI Act for insider trading, failure to furnish information, and fraudulent trading practices.

Short Notes

• Listing and Delisting of Securities: Explain the mandatory conditions and legal obligations of listed companies under stock exchange listing agreements.
• Powers of Central Government under SCRA: Discuss the powers of the Central Government to suspend business of a stock exchange or supersede its governing board during emergencies.
• Objectives of the SEBI Act, 1992: Outline the triple objectives of protecting investors, promoting securities market development, and regulating financial intermediaries.

UNIT V: Foreign Exchange Management (FEMA 1999) and Competition Act 2002

Unit V covers cross-border currency regulations and anti-competitive trade practices under Indian commercial legislation.

Essay Questions

• Regulation of Combinations under Competition Act 2002: Explain the statutory provisions regulating mergers, amalgamations, and acquisitions (combinations) and the power of the Competition Commission of India (CCI) to investigate transactions causing an appreciable adverse effect on competition (AAEC).
• Appellate Framework under FEMA 1999: Explain the establishment, powers, and appellate procedures of the Special Director (Appeals) and the Appellate Tribunal for Foreign Exchange under the Foreign Exchange Management Act, 1999.
• Definitions of "Person" and "Person Resident in India": Analyze the criteria used under FEMA 1999 to determine residential status for foreign exchange compliance. Students should also consult our cyber law and corporate compliance syllabus notes to understand overlapping regulatory requirements in digital transactions.
• Powers of the Reserve Bank of India (RBI) under FEMA: Discuss the authority of the RBI to regulate and restrict capital account transactions and oversee authorized persons dealing in foreign exchange.

Short Notes

• Prohibition of Anti-Competitive Agreements: Explain horizontal and vertical anti-competitive agreements under Section 3 of the Competition Act, including bid rigging, cartelization, and exclusive supply pacts.
• Directorate of Enforcement (ED): Describe the investigatory and search powers exercised by the Enforcement Directorate under FEMA 1999.
• Abuse of Dominant Position: Discuss predatory pricing, denial of market access, and discriminatory trading conditions prohibited under Section 4 of the Competition Act.
• Adjudication and Compounding of Contraventions: Outline the administrative mechanism for compounding foreign exchange violations under FEMA rules.

Key Exam Strategies for KSLU Company Law Students

To maximize marks in KSLU LL.B Company Law examinations, candidates should structure long essay answers by stating the relevant statutory section first, explaining the underlying legal doctrine, analyzing leading case laws (both Indian and English company precedents), and concluding with a clear synthesis. For problem questions, state the legal issue, apply the relevant corporate rule, and provide a direct advisory conclusion to the hypothetical party.