CS Executive December 2023 Question Paper Setting Up of Business, Industrial and Labour Laws

FOR CS EXECUTIVE EXAM PREPARATION

CS Executive 2023
Question Paper · Setting
Up of Business,
Industrial and Labour
Laws
EXAM YEAR TYPE

CS Executive 2023 Question Paper
SUBJECT DATE

Setting Up of Business, Industrial and Labour Laws December 2023

Notes · Sample Papers · Previous Year Papers · Mock Tests

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NEW SYLLABUS
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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 : 8

NOTE :ag
Answer ALL Questions.

PART–I
1. R is carrying on the business of trading of readymade garments as a sole proprietor in
Delhi. He wants to diversify his business by opening the branches in other cities across the

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country. Due to shortage of funds and other resources, he approaches his friend K, who

m for him. K advises him to convert his sole
is a Practicing Company Secretary (PCS) for seeking his advice on the form of business

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proprietorship form of business intolaa private company by involving his friends and relatives
organisation which may be more beneficial

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as the directors and members aof the private company. He describes the characteristics of
a private company under the Companies Act, 2013. K further advises R that the conversion
of his existing form of business into a private company would provide him easy access to
capital needed for diversifying his business.
In accordance with the advice of K, R decided to convert his sole proprietorship business

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into a private company with the proposed name, R Holding Pvt. Ltd. He makes an application
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c. o company, R Holding Pvt. Ltd. However, the proposed name is rejected
e mby RoC, Delhi citing
to the Registrar of Companies (RoC), Delhi for reservation of the proposed name of the

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a a fresh application for
las the common reasons for rejection of the proposed name. R g
aCloth Trading Pvt. Ltd. and the
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makes

a reservation of the proposed new name of the company, R
name is reserved by RoC, Delhi. After filing the necessary e-forms and documents with
RoC, Delhi, the company, R Cloth Trading Pvt. Ltd. is incorporated under the Companies
Act, 2013.

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K informs R about the utility of the Permanent Account Number (PAN) and accordingly,
R obtains PAN in the name of the company. K also helps him in getting the GST registration
in the name of the company and advises him to go for “Composition Scheme” under the
GST Act, 2017. R approaches the banks for sanctioning loan for his business to enable
him to open branches in the State of Uttar Pradesh. However, due to stringent loan sanctioning
process of the banks, R fails to get loan from the banks for his business. R approaches
K for seeking his help to arrange the required funds for the business and K helps R in
getting loan for his business from, ST Finvest Ltd., a Non-Banking Financial Company (NBFC).
The loan is processed quickly by ST Finvest Ltd. to R Cloth Trading Pvt. Ltd. at a very
competitive rate of interest.
In view of the above, answer the following :
(a) Write down the characteristics of a private company under the Companies Act, 2013
as described by K to R.
(b) Describe the common reasons on the basis of which RoC, Delhi has rejected the
name reservation application of R with the proposed name, R Holding Pvt. Ltd.
(c) State the utility of PAN for R Cloth Trading Pvt. Ltd.
(d) Why does K advise R to go for “Composition Scheme” under the GST Act, 2017 ?
(e) Discuss the privileges available to ST Finvest Ltd. to process loan to R Cloth Trading
Pvt. Ltd. quickly at a very competitive rate of interest as compared to the banks.
(3 marks each)
2. (a) Aniket wishes to incorporate a company under section 8 of the Companies Act, 2013
for the purpose of promotion of education, research and social welfare. He approaches
you to seek your advice on eligibility to apply for section 8 company license. Advise
Aniket.
(3 marks)

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(b) YZ Ltd. desires to form a Special Purpose Vehicle (SPV) to start a new project.

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Brief the company on the benefits of forming a SPV.

c (3 marks)m
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a a office
l Branch Office in India. Advise S&T Corp. the activities permitted for a branch
(c) S&T Corp. is a company registered in Germany. The company desires to open

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a in India of a person resident outside India under the Foreign Exchange Management
Act, 1999 read with Foreign Exchange Management (Establishment in India of a
branch office or a liaison office or a project office or any other place of business)
Regulations, 2016.
(3 marks)

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of his friends advised him to obtain. the license under the Shop and Establishment
(d) Ratan has started the business of handicraft items in Chandni Chowk, Delhi. One

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ag and Establishment Act, 1948. Advise Ratan.
Act, 1948. He approaches you
for license under the Shop
(3 marks)
(e) A, B and C are the partners in the partnership firm registered under the Partnership
Act, 1932 in the name of ABC Traders. Considering the benefits available to Limited
Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008, the

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partnership firm is converted into LLP with the name ABC LLP and the same is

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registered. The Department of State Revenue issues a notice to the LLP to pay stamp

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laLLP is a separate distinct
duty and registration charges for transferring the assets of the erstwhile partnership

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firm to LLP. It is contended by the Department that the

ag entity from that of its partners and hence the conversion amounts to change of legal
rights. In the light of the decided case law, examine the validity of the contention
of the Department of State Revenue.
(3 marks)

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3. (a) MS Appliances, a small enterprise having investment in plant and machinery of

` 8.00 crores and turnover of ` 45.00 crores approaches you to seek your advice

on Micro & Small Enterprises Cluster Development Programme (MSE-CDP) Scheme

of the Government of India for MSMEs. Draft a brief note on MSE-CDP Scheme.

(b) TKM Ltd. is a section 8 company registered under the Companies Act, 2013. The

company desires to operate the educational institutes in the State of Madhya Pradesh.
The company approaches you to seek your advice on the role of Incubators for

assisting entrepreneurs in building and launching their start-ups. Draft a brief note on

‘Incubators’ as a mode of financing.

(c) BN Ltd. and PL Ltd. desire to form a Joint Venture for setting-up a new infrastructure

project in the State of Karnataka. Both the companies approach you to seek your

advice on the Joint Venture Agreement to be entered into between them. Advise

them the essential components of a Joint Venture Agreement.

(d) A group of farmers desires to start the business of organic farm produce by opening

branches in different districts and States of the country. The farmers have approached

you to seek your advice on formation of a Multi State Co-operative Society under
Multi State Cooperative Societies Act, 2002. Brief them on the documentary requirements

for formation of Multi State Co-operative Society and the Authority with whom the
application needs to be filed.

(e) ABC Ltd. has been converted into a private limited company with the name ABC
Pvt. Ltd. Brief the company on the major compliances that need to be followed

by it after conversion into a private limited company.

(3 marks each)

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

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o characteristics of a Nidhi Company under the Companies Act, 2013 andem
Explain.cthe
4. (a)
e m Rules, 2014. l a s
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the Nidhi
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(b) g Payment banks is a new model of banks conceptualised by the Reserve Bank of
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India (RBI). Elucidate.
(c) Briefly state the types of FSSAI License under the Food Safety and Standards Act,
2006.
(d) What do you mean by ‘Other Service Providers’ (OSP) under New Telecom Policy,

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1999 ?

e mAct, 1987.
(e) Explain in brief the eligibility criteria for obtaining Housing Finance Company Registration

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under the National Housing Bank
(3 marks each)
OR (Alternate question to Q. No. 4)

4A. (i) Write down the procedure to apply for Industrial License under Industries (Development
and Regulation) Act, 1951 ?

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(ii) Describe in brief the compliances under Environment Laws.
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e Act, 1999.
Discuss in brief the eligibility for referring any entity as ‘Indian Entity’

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regime as per the provisions of Foreign Exchange Management

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(iv) Explain in brief the objectives of Foreign Collaboration.
(v) What are the restrictions imposed by the Reserve Bank of India on Chit Fund
business ?
(3 marks each)

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PART–II
5. Reena has joined as the Management Trainee in the Company Secretary department of PP
Ltd. in the month of September, 2022. The Company is a listed company. Apart from passing
CS Professional examination, Reena has also completed her MBA (Finance) from a reputed
Management Institute. She is passionate to learn the compliances under the Companies Act,
2013, the SEBI Act, 1992 and other laws applicable to the company. On the request of
Reena, the Company Secretary of the company advises Reena to meet Sanjeev, who is
the senior partner of AB Solicitors, the legal consultants of the company, for understanding
the compliances under the various laws.
On 10th July 2023, Reena visits the office of Sanjeev. During the discussion, Sanjeev highlights
that in the CS department of PP Ltd., the male CS trainees are getting higher stipend as
compared to the stipend of female CS trainees. Sanjeev explains her about the reforms proposed
by Code on Social Security, 2020, which amends and consolidates the laws relating to social
security with the goal to extend social security to all employees and workers either in the
organised or unorganised or any other sectors or for matters connected therewith or incidental
thereto. He also mentions that in order to ensure security for all workers, the Central Government
has subsumed nine Labour Laws into the Social Security Code to secure the rights of workers
for insurance, pension, gratuity, maternity benefit etc. Further, the Government can fund the
contribution of workers from disadvantaged section. He also informs that being a cotton textile
unit, there are some restrictions for PP Ltd. on engagement of women and children near
cotton openers, but the company is not following the prescribed rules.
After the meeting, Sanjeev advises Reena to come again to his office on the next day so
that he may explain her about the pending legal cases. She returns back to the office of
PP Ltd. and prepares a detailed report on equal pay for equal work and laws which are
proposed to be merged in Social Security Code and restriction on employment of women
and children. She sends the said report to the Managing Director of PP Ltd. through email
with a copy to the senior partner of the legal consultants of the company.
As per the advice of Sanjeev, Reena visits the office of AB Solicitors, legal consultants,
again on 11th July 2023. On reaching the office of legal consultants, she is informed that

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Sanjeev is on leave for the day due to urgent personal work. Mukesh, who is the junior

legal cases of theomcompany and she should also learn how to prepare such replies. Reena .c
partner in the legal consultancy firm, tells her that he is preparing replies in respect of various
o
.c learn new things enters into the chamber of Mukesh. Mukesh tells Reena e m
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emprovide very useful case studies to her for her learning and starts making gphysical
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being excited to

g laand advances with her. Being aggrieved by the behaviour of Mukesh, Reenaa returns
that he may

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contact
to the office of PP Ltd. and makes a complaint before the internal complaints committee
of the company for sexual harassment. Reena wants that her identity, address and contents
of her complaint should not be published, communicated or made known to the public.
In view of the above, answer the following :
(a) In the light of a decided case law, examine whether PP Ltd. is violating the rule

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of Equal Pay for Equal Work ?

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(b) What are the nine Labour Laws that have been subsumed by the Social Security

s
Examine whether PP Ltd. islacontravening the provisions of law regarding prohibition
Code by the Central Government

ag and children near cotton openers ?
(c)
of employment of women
(d) Briefly state the provisions regarding prohibition of publication or making known contents
of complaint and inquiry proceedings under Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
(5 marks each)

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Attempt all parts of either Q. No. 6 or Q. No. 6A

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6. (a) Arun was working in a factory from 1st October 2020. He met with an accident

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ethe factory. The owner
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while working in the factory on 30 June 2023 which resulted
disablement. His services were terminated by the owneraof
s also denied to pay gratuity to Arun on the ground thatag
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he had not rendered continuous
service of five years. Referring the provisions of Payment of Gratuity Act, 1972, examine
the correctness of the decision of the owner of the factory for non-payment of gratuity
to Arun.
(5 marks)

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(b) Define the term ‘Adolescent’ under the Child and Adolescent Labour (Prohibition and
Regulation) Act, 1986. Also explain the provisions regarding hours and period of work
of an adolescent in any establishment under the Act.
(5 marks)
(c) Explain in brief the provisions regarding payment of Subsistence Allowance under the
Industrial Employment (Standing Orders) Act, 1946.
(5 marks)
(d) What are the obligations of Employers and Apprentice under the Apprentices Act,
1961 ?
(5 marks)
OR (Alternate question to Q. No. 6)

6A. (i) Describe in brief the specific responsibility of the occupier in relation to hazardous
processes under the Factories Act, 1948.
(ii) Write down the benefits available to the insured persons or their dependants under
the Employees’ State Insurance Act, 1948.
(iii) Distinguish between ‘Lay off ’ and ‘Lock out’ under the Industrial Disputes Act, 1947.
(iv) Explain in brief the classes of employees to whom the provisions of the Payment
of Bonus Act, 1965 are not applicable.
(5 marks each)

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