CS Executive December 2025 Question Paper Setting Up of Business, Industrial and Labour Laws

FOR CS EXECUTIVE EXAM PREPARATION

CS Executive 2025
Question Paper · Setting
Up of Business,
Industrial and Labour
Laws
EXAM YEAR TYPE

CS Executive 2025 Question Paper
SUBJECT DATE

Setting Up of Business, Industrial and Labour Laws December 2025

Notes · Sample Papers · Previous Year Papers · Mock Tests

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Roll No. ..................................... :1:

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Time allowed : 3 hours Maximum marks : 100

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Total number of questions : 6 Total number of printed pages : 12
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: gAnswer ALL Questions.
NOTE a

PART–I
1. Ananya, a mechanical engineer, and Ritu, an environmental scientist, first met during a government-
funded clean water project in Assam. Both were committed to finding practical, sustainable

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solutions to address the lack of safe drinking water in disaster-hit regions. After several years

m by floods, cyclones, or droughts.
of collaborative research, they developed a portable solar-powered water purification unit that
could be quickly deployed in areas e
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Encouraged by the potential of g
atheir innovation, they decided to formalize their venture. They
agreed to separate the research and commercial activities into different entities to ensure that
risks from experimental work would not affect the manufacturing and sales arm. For the
research unit, they chose the Limited Liability Partnership (LLP) structure for its operational
flexibility, limited liability protection, and ease of management compared to a private company.

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The incorporation process through the Ministry of Corporate Affairs (MCA) portal was smooth,

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c. o and procuring equipment, they overlooked executing and filing thesLLP
mAgreement within the
and the Certificate of Incorporation was issued promptly. However, while setting up the laboratory

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statutory time limit. This delay came to light when they approached a bank to open an

ag account and the banker insisted on the LLP Agreement for KYC compliance.

For the commercial manufacturing business, they incorporated a private limited company. They
applied for recognition under the Startup India initiative through the Department for Promotion
of Industry and Internal Trade (DPIIT) portal to avail themselves of benefits such as income
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tax exemptions, access to government tenders without prior experience, and faster intellectual
property processing. Their application was rejected on the grounds that the details provided
in the ‘‘innovation’’ section were too generic and did not adequately demonstrate how the
product was novel, scalable, or technologically superior to existing market solutions.
Despite the setback, Ananya and Ritu continued their operations. Based on their investment
in plant and machinery of ` 4 crore and annual turnover of ` 15 crore, they obtained
Udyam Registration under the MSME Development Act, 2006, which classified them as a
small enterprise. This registration later became significant when a large corporate customer
failed to make payment for a bulk order within the agreed period. The payment delay extended
beyond 50 days, creating cash flow difficulties and putting pressure on their ability to meet
regular obligations such as salaries and supplier dues.

During this time, they were approached by a distributor from Singapore who expressed interest
in marketing their product across Southeast Asia. After evaluating the proposal, they decided
to establish a wholly owned subsidiary (WOS) in Singapore under the automatic route for
overseas direct investment as permitted by the Foreign Exchange Management Act, 1999 and
the Overseas Investment Rules, 2022. The Singapore entity was incorporated without difficulty,
but they soon discovered that local regulations imposed ongoing requirements such as the appointment
of a resident director, annual filings with the Accounting and Corporate Regulatory Authority
(ACRA), and the maintenance of a registered local office. These obligations created an additional
financial burden that had not been factored into their original expansion budget.

To complicate matters, the cost of importing certain critical filtration components from Germany
began to rise sharply due to currency fluctuations. These unexpected expenses further reduced
their working capital, forcing them to consider financial strategies to manage both domestic
operations and foreign compliance costs without disrupting production.

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The situation had become more complex than either of them had anticipated. Their plans

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o not be delayed. Each choice carried its own risks, and missteps could
for expansion were now entangled with compliance requirements, financial pressures, and strategic
decisions that.ccould e m
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emtheir domestic operations and their new overseas venture. As they considered
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affect both
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theg way forward, Ananya and Ritu knew that their ability to navigate the evolving legal,
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regulatory, and market environment would decide the long-term future of their enterprise.
In view of the above, answer the following :

(a) What is the statutory time limit for filing of LLP Agreement after incorporation and

the importance of such document ?

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(b) What important points should be considered by Ananya and Ritu before they setup
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their Start-up ?

(c)
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In case where there is a dispute with respect to payment due, what remedy is available

to an MSME ? a
(d) What steps should be kept in view while setting-up business through subsidiary company

in Singapore ?

(e) What types of compliances to be complied with by Ananya and Ritu under Environment

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Laws ?

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c. 2.o (a) s e m
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CK XH Inc., a Company incorporated in Hong Kong, engaged primarily in the

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manufacturing and international trading of telecom infrastructure components, proposes
a to establish a Branch Office (BO) in Guwahati, Assam, with the intent of marketing

its products and offering post-sale technical services. The entity has demonstrated

profitability in four out of the last five financial years, with the fifth showing a nominal

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net loss. The company has appointed a local consultancy firm in India to act as

its authorized agent for filing the requisite application through an AD Category-I bank.

In view of above situation, whether CK XH Inc. is eligible for setting up the Branch

Office ?

(3 marks)

(b) X Ltd. is a company incorporated under the Companies Act, 2013. Its Memorandum

of Association (MoA) restricts the company from carrying out manufacturing of electrical

appliances only. However, the Articles of Association (AoA) were recently amended

by special resolution to include a provision allowing the company to enter into the

business of real estate development, and based on this amendment, the Board of

Directors passed a resolution to purchase land for a commercial mall project. A minority

shareholder challenges this decision stating that it is ultra vires to the company. The

Board contends that since the Articles now allow it and the shareholders approved

the amendment, the decision is valid. With reference to relevant case law and principles,

examine the legal validity of the Board’s action and advise :

(i) Whether the amendment to the Articles enabling entry into real estate business

is valid in light of the Memorandum ?

(ii) Whether the shareholder’s challenge is tenable in law ?

(iii) Whether the Board’s action can be ratified by the shareholders by passing

another special resolution ?

(3 marks)

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(c) During the launch of a new line of eco-friendly homes, ABC Infra Ltd., a construction

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co product expertise and XYZ Marketing handles promotions and customer
company, collaborates with XYZ Marketing, a marketing agency, where ABC Infra

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em Identify the type of collaboration represented in this scenario andglexplain
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Ltd. provides

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la the benefits each partner derives from this collaboration.
engagement.
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(3 marks)
(d) Sewa Foundation is a registered NGO for promoting Indian Culture. It organizes various
cultural programmes in India as well as outside India. The founder members are retired
from armed force service, Indian Army. Most of the members desired that the Foundation

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may be converted into a section 8 Company under the Companies Act, 2013 with

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m‘Live with Culture’. They also desired to expand
5 members as promoter. Further, they don't want to affix the word 'Limited' or 'Private

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Limited' after the proposed name

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the object of the company.
In view of the above, answer the following :
(1) Whether, proposed Company can be incorporated with affixing the word 'Limited'
or 'Private Limited' as case may be ?
(2) What are the other objectives that can be included in the object clause of

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the proposed Company ?

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c. o (e)
(3 marks)

s em
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BJS & Co., a registered LLP under LLP Act provides the legal and financial consultancy

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services through its 21 branches all over in India. All its partners

ag Secretaries. The turnover for the financial year 2024-25 was ` 9.55 Crore.
The LLP recently engaged its trainees for preparation of statutory forms, return and
other documents. Rahul, one of the trainees, during the preparation of Annual Return
of LLP, opines that as Annual Return can be signed by any designated partner and

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all partners are Practicing Company Secretary, hence there is no need to get certification
from Company Secretary in Practice, who is not the member of LLP.
In above situation, whether view of Rahul is correct in light of provisions of LLP
Act ?
(3 marks)
3. (a) For welfare of farmers, a group of farmers in Gujarat decided to incorporate a Society.
The main objective of the society is to provide scientific developed equipment for
farming, education for modern farming and also to organize research & development
programmes from time to time.
What are the documents to be submitted with Registrar for formation of such
society ?
(3 marks)
(b) Srinivasan Rao recently completed his degree in Law. After qualifying the examination,
he got the membership of Bar Association and started practising as an Advocate.
His area of interest is Labour Laws.
In view of this, highlight the importance of Labour Laws.
(3 marks)
(c) Maharaja Bhanu Pratap Pvt. Ltd. was incorporated as Private Limited Company in
year 1943 under prevailing Companies Act. The main objective of the Company was
to maintain the properties of the Maharaja and the revenue therefrom. However, after
a long period, it was felt that the company became un-operational. Further, the younger
generation decided to start advisory business. Hence, it was decided that Maharaja
Bhanu Pratap Pvt. Ltd. will be converted into an LLP.
In view of the above situation, what conditions are to be fulfilled for such conversion.
Also describe the effect of conversion.
(3 marks)

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(d) Renowned Business House of India recently entered into a collaboration with a Germany-

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co also with modern technology. The manufacturing plant is proposedsetom
based company for manufacturing of defense equipment. There shall be production

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of explosives

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la is not sure as to the requirement of Industrial license. a
set up in an industrial area situated near to Greater Noida. However, the management

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a In view of the present situation, opine whether Industrial License will be required.
Also detail the procedure for obtaining Industrial License.
(3 marks)
(e) A group of people in a slum area of Kolkata decided to start a chit fund to assist

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the daily wage labour. As per the scheme, a member of the chit fund has to deposit

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m win the bid. Tenure of the scheme is 13 months.
` 50 per day. On the last day of the month, the fund can be used by the subscriber
on bid basis. Highest discount e
a s would
However, in mid of the l
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month, a subscriber can avail the loan facility with fixed
interest rate of 7% per annum.
One of the subscribers opines that such scheme should be registered with registrar
of Chit Fund.
Check the validity of opinion of subscriber.

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(3 marks)

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Attempt all parts of either Q. No. 4 or Q. No. 4A

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ag 4. (a) ‘‘Choosing a form of business entity is crucial to a successful organization.’’ Based
on the above statement, highlight the major factors and their relevance in choosing
the form of a business.
(3 marks)

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(b) ‘‘The Shops and Establishments (S&E) Act is applicable on all the commercial
establishments; viz, business centers, offices, warehouses, stores, hotels, eateries,
amusement parks, theatres, etc., nationwide. It is one of the most important regulations
required to be complied with for any business.’’
In view of above statement, enumerate the procedure for registration under the Shops
& Establishments Act.
(3 marks)
(c) ‘‘Payment banks is a new model of banks conceptualised by the Reserve Bank of
India (RBI). These banks can accept a restricted deposit.’’
When can RBI grant full license to an entity as payment bank ?
(3 marks)
(d) ‘‘The nature of a multidisciplinary firm fosters collaboration. The common office space,
with professionals working in close proximity to one another, provides each professional
with a strong set of resources in the firm. In addition, this spirit of working together
creates greater opportunity for collaboration so the total needs of the client are best
met.’’
What are the risks involved in forming of a multidisciplinary firm (MDF) ?
(3 marks)
(e) ‘‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 was notified
to address policy issues affecting MSMEs as well as the coverage and investment
ceiling of the sector."
In view of above statement, highlight the benefits provided to an enterprise having
Udyam registration.
(3 marks)
OR (Alternate question to Q. No. 4)

4A. (i) Differentiate between Banks & NBFC’s.
(ii) Differentiate between Public Trust and Private Trust.
(iii) Differentiate between Partnership & LLP.
(iv) Differentiate between Entrepreneurship and Startup.
(v) Differentiate between Special Purpose Vehicle (SPV) and Company.
(3 marks each)

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PART–II
5.
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Vibhut Small Finance Ltd. is a registered NBFC under regulations issued by RBI. The Company
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e base of 34,549 in 173 branches all over in India. The totat employee'sglstrength
was formed in 2010. As on date, market cap of the Company is ` 15,434.56 Crore with

a s a NBFC,
l with 76 : 24 male and female ratio. Being one of the largest private sector
total customer
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a 3,983
the Company offers various benefits to employees as well as welfare services.
There are various Internal Committees to investigate the matters related complaints under POSH
Act. During the period from lst April 2024 to 31st March 2025, total complaints received
was 305, out of which 226 was disposed of within 3 months. It was observed that the

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Internal Committee prima-facia looked into the matter and based on the gravity of the matter,

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the employees were terminated immediately, where found guilty, as per recommendation of

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the Internal Committee. No departmental
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In one case, the Branch Manager denied leave to a woman who had adopted a 2-month-
old child. The contention of the Management was that as there is no birth, hence maternity
benefits can't be given. In certain cases, it was also observed that if the child dies during
the maternity leave, prior to the delivery period, leave for the rest of the period were being
cancelled as per internal policy.

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Mrs. Lata, who was the cashier in a rural area branch, had met with an accident due to

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c. o The view of the Management was that as there are only 22 employees
slippage. In absence of First-Aid Box, there was huge loss of blood and she couldn't survive.

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a Box.
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is less than 150, hence there is no need to maintain a First-Aid

ag Through outsourcing agency, the Company hires security personnel. The number of guards
depends upon the size of the Branch. It was noticed that in a few branches, the drinking
water facility was not available. The view of the Management was that such facilities are
to be provided by the contractor, and not by the Company.
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The matters in Vibhut Small Finance Ltd., therefore highlights the importance of strict adherence
to labour laws in protecting the rights of workers, maintaining industrial harmony, and ensuring
that businesses remain compliant with statutory obligations. It also shows that expansion and
profit-making, while important for business growth, cannot come at the cost of ignoring legal
responsibilities owed to employees.
In view of the above-mentioned facts, answer the following by mentioning the legal provisions
of applicable laws :
(a) Can Vibhut Small Finance Ltd. terminate employee on basis of finding of Internal
Committee for POSH, without conducting any departmental inquiry ?
(b) Can remaining Maternity leave be cancelled in case of death of the child prior to
expected delivery date ?
(c) Is the view of Vibhut Small Finance Ltd. correct that no first aid facility can be
provided where the numbers of employee is less than 150 ?
(d) Is Vibhut Small Finance Ltd. liable to provide the facility of drinking water to its
contract labour ?
(5 marks each)
Attempt all parts of either Q. No. 6 or Q. No. 6A

6. (a) Due to dissatisfaction among workers, wage-related concerns and working conditions,
a group of employees formed a trade union and submitted a charter of demands
seeking revision of wages and improvements in leave benefits to Managing Director
of Maharaja Jet Airways. The management did not recognize the union, claiming that
a welfare committee was already addressing grievances. In protest, the trade union
approached the Labour Officer, who forward the matter to Conciliation Officers. Since
long, there being no resolution, the state government, in the interest of the industry,

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referred the matter to the Industrial Tribunal for settlement of the disputes. The tenure

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of the tribunal is 2 months. Maharaja Jet Airways opposed the decision of the
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.co contesting that as the proceeding for conciliation is pending, the matter
Government,
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la In view of above, answer the following :
cannot

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a (i) Whether Government can refer the matter to Industrial Tribunal without waiting
for conclusion of conciliation proceeding ?
(ii) Can Industrial Tribunal continue office after expiry of 2 months, where the
matter is unresolved ?
(5 marks)

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(b) Rekha was an employee of State Power Generation Ltd. As informed to her, the

m Provisions Act, 1952 are not applicable to it.
company has a Trust for Contributory Provident Fund, as provisions of Employees’

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s 7 years, Rekha left State Power Generation Ltd. and
a
Provident Funds and Miscellaneous
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After working for more than
joined XYZ Ltd., having more than 1000 employees on the roll. The HR department
of XYZ Ltd. informed Rekha that the amount of the provident fund in State Power
Generation Ltd. cannot be transferred to EPFO, as the provisions of Employees' Provident
Funds and Miscellaneous Provisions Act, 1952 are applicable to the company.
In above given situation, answer the following :

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(i) In which cases provision of Employees’ Provident Funds and Miscellaneous

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Provisions Act, 1952 are not applicable ?

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(ii) How can Rekha receive the amount of Provident Fund from previous

las company ?
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ag (5 marks)
(c) Mohindra had joined PZ India Ltd. in 1994. After attaining of age of superannuation,
he retired from the organization. PZ India Ltd. had allotted him residential facility
in quarters of the organization. As per the policy of the organization, an employee

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has to vacate the quarter within 30 days of his retirement, but Mohindra didn't do
so. Because of this, the amount of gratuity owed to him was withheld by the organization.
Can PZ India Ltd. withhold the amount of gratuity on the above ground ?
Also suggest how the amount of gratuity can recovered.
(5 marks)
(d) Ranjan is a graduate holding degree of BE (Mechanical). For career prospective, he
joined the training in Gas and Oil Production Ltd. The period of his apprenticeship
was 18 months. After completion of such training, he applied for a job of Technician
in the organization. The qualifying criteria was at least 1 year post qualification experience
of candidate. The period of his training was not considered and his application was
rejected.
In view of such situation, answer the following :
(i) Can an apprentice demand the employment ?
(ii) What are the obligations of the employer under Apprentices Act, 1961 ?
(5 marks)
OR (Alternate question to Q. No. 6)

6A. (i) Prepare a note on Local Complaint Committees constituted under Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
(ii) What is the specific responsibility of occupier in relation to hazardous processes under
Factories Act, 1948 ?
(iii) What types of matters are decided by Employee Insurance (E.I.) Court ?
(iv) Define the following terms under Labour Laws (Exemption from Furnishing Returns
and Maintaining Registers by certain Establishments) Amendment Act, 2014 :
(a) ‘Employer’
(b) ‘Establishment’
(c) ‘Form’
(d) ‘Small Establishment’
(e) ‘Very Small Establishment’.
(5 marks each)

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