CS Executive June 2026 Question Paper Setting Up of Business, Industrial and Labour Laws

FOR CS EXECUTIVE EXAM PREPARATION

CS Executive 2026
Question Paper ·
Setting Up of
Business, Industrial
and Labour Laws
EXAM YEAR TYPE

CS Executive 2026 Question Paper
SUBJECT DATE

Setting Up of Business, Industrial and Labour Laws June 2026

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 : 12

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NOTE : Answer ALL Questions.
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1. Arjun, Raghav and Karan had each spent several years working in different development-
sector assignments across northern India. Their work regularly brought them into contact with
small community groups, informal collectives and local organizations engaged in social welfare

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activities. Through these interactions, they noticed that many such groups lacked structured

emcommitted to their respective causes, they often
support in areas such as documentation, compliance, financial literacy and organizational

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development. Although these groups were

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struggled to maintain proper records,
These limitations affected their ability to expand their activities or collaborate with larger
institutions.

To understand the situation more clearly, the three colleagues conducted informal consultations
in several districts of Uttar Pradesh, Uttarakhand and Haryana. They met with representatives

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of community groups, local facilitators and district-level institutions. These discussions revealed

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. awareness,
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e the three colleagues
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decided to establish a formal institution in New Delhi that could
to grassroots social-impact initiatives.

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They examined various legal structures available for establishing such an institution. They considered
the features of trusts, societies and companies registered under the Companies Act, 2013.

After evaluating the advantages and limitations of each structure, they concluded that incorporating
a company under Section 8 of the Companies Act, 2013 would be appropriate for their
objectives. They believed that this structure would allow them to operate for social-development

purposes while maintaining a formal governance framework.

They proposed the name Centre for Rural Development Initiatives (CRDI) for the new entity.
While initiating the incorporation process, they learned that the Ministry of Corporate Affairs
(MCA) had introduced an integrated web-based system known as SPICe+ (INC 32). This

system allowed applicants to complete several incorporation related activities through a single
digital interface. The three colleagues prepared the required documents and submitted them

through the SPICe+ system. After verification by the Registrar of Companies, CRDI was
incorporated as a company under Section 8 of the Act. Arjun, Raghav and Karan became

the first directors of the company.

CRDI began its operations from a rented office in New Delhi. The organization started conducting

training programs, compliance-awareness sessions and documentation-support workshops for
small community organizations. These programs were organized in collaboration with district-

level institutions, voluntary groups and local facilitators. Over the next several months, CRDI
conducted multiple capacity-building initiatives across different districts. The programs focused

on areas such as record-keeping, project documentation, basic financial management and
regulatory awareness. Participants expressed that such support was essential for strengthening
their operations.

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During one of the training programs, a participant named Sana raised a concern regarding
financial challenges faced by several community organizations. She explained that many groups

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had applied for loans or grants from financial institutions or government schemes, but the

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disbursement of funds often took time. During this waiting period, the organizations faced
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continuing their activities. Sana suggested that CRDI could consider helping the

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ifaCRDI did not provide funds directly, it could still support organizations by guiding them
startups by providing guidance on the financing option of bridge round. She stated that

through the financial process.

The directors discussed this suggestion in detail. They reviewed the scope of activities that
CRDI could undertake under its existing structure. They also consulted their legal advisor
to understand the implications of providing any form of financial assistance or facilitation. The

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that could be undertaken without affecting its. legal status. The Board considered the possibility
advisor explained the limitations applicable to the company and clarified the types of activities

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of assisting organizations by facilitatings loan documentation and connecting them with suitable
gla with applicable laws and the company’s objects.
financial institutions, subject toacompliance

As CRDI continued its operations, it began receiving requests from partner organizations to
undertake specialized assignments such as consultancy projects, customized training programs
and capacity-building initiatives. These assignments could potentially generate revenue that would
help sustain CRDI operations. However, the directors recognized that the existing structure

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imposed certain restrictions on undertaking revenue-generating activities. They also noted that

c. o s eCRDI should consider
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a such conversion would involve
In view of these developments, the Board began examining whether

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converting into a private limited company. They understood that
compliance with specific legal requirements, including obtaining necessary approvals, altering

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the company’s constitutional documents and addressing the treatment of existing assets. The
directors sought legal advice to understand the implications of conversion, including the changes
in regulatory obligations and the impact on the company’s long-term objectives. They decided
to evaluate the matter carefully before taking any final decision.

In view of the above, answer the following :
(a) What are the key legal features of a Section 8 company under the Companies Act,
2013 that apply to CRDI ?
(b) What is the purpose of the SPICe+ (INC 32) form in the incorporation of a company
like CRDI ?
(c) How does bridge-round funding help startups to meet their financial needs ?
(d) What are the legal requirements for converting a Section 8 company into a private
limited company ?
(e) What types of loan-facilitation support can CRDI provide through MUDRA-supported
banks while remaining compliant with Section 8 restrictions ?
(3 marks each)
2. (a) Ravi, who runs a micro manufacturing unit, supplied goods to a buyer who accepted
the delivery on 1st March. The buyer has not made payment even after 18 days.
Ravi wants to understand whether this delay is covered under the Micro, Small and
Medium Enterprises Development (MSMED) Act, 2006 and how the ‘‘appointed day’’
is determined. Explain the legal position.
(3 marks)
(b) Nikhil is planning to establish a Non-Banking Financial Company (NBFC) and is currently
in discussions with potential investors to raise his initial capital. During one such meeting,
an investor informs him that the Reserve Bank of India has introduced a Scale-Based
Regulatory Framework for NBFCs. Since Nikhil is unfamiliar with this framework,
he seeks your guidance to understand its key regulatory features.

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Explain the main elements of the scale-based regulatory framework to help Nikhil
make informed decisions while setting up his NBFC.

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(3 marks)
(c)
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. conditions in his neighbourhood. Now that he has secured a job, he planssem
Mahesh, who grew up in the slum areas of Mumbai, has always wanted to improve
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s eform a society to work towards community development.
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a Explain the purposes for which a society can be registered under the Societies Registration
to

Act, 1860.
(3 marks)
(d) Nexonova Engineering Corp, a foreign company, operates a Branch Office in Pune.
During the financial year ending 31st March 2026, the Branch Office earned significant

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profits from its Indian and overseas clients. The Head Office, located in Zurich, now

emBranch Office wants to ensure full compliance with
intends to remit 50% of the profit earned in India to its parent company abroad.

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Before initiating the remittance, the

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Indian foreign exchange regulations.
Explain the compliances that the Indian Branch Office must complete before remitting
the surplus profit to its foreign Head Office.
(3 marks)
(e) Rohit, a partner in an LLP, intentionally conceals material information from a client

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and induces the client to enter into a contract with the LLP. Later, the client discovers

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the concealment and alleges that the LLP obtained the contract through fraud.

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Explain, under the Limited Liability Partnership Act, 2008, the liability of a partner

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in cases involving fraud and whether the LLP and its other

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(3 marks)

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3. (a) Noventrix Labs Pvt. Ltd. has recently been incorporated as a new startup entity.
The company has not yet applied for recognition from the Department for Promotion
of Industry and Internal Trade (DPIIT). In the second board meeting, one of the
directors, D, pointed out that without DPIIT recognition, the company cannot access
tax benefits or funding support available to Startups.
As the Company Secretary, explain the process through which Noventrix Labs Pvt.
Ltd. can obtain Startup recognition.
(3 marks)
(b) Bluewave Tech. Pvt. Ltd. attempted to file incorporation forms without properly preparing
its Memorandum of Association and Articles of Association. The promoters now want
to understand the statutory requirements relating to these documents.
Explain the procedure for preparing, stamping, signing and filing the Memorandum of
Association and Articles of Association during company incorporation.
(3 marks)
(c) Crestview Labs Pvt. Ltd. is in the process of incorporation and intends to appoint
new directors.
Explain the statutory requirements for obtaining a Director Identification Number (DIN)
and a Digital Signature Certificate (DSC) for the proposed directors.
(3 marks)
(d) InfoEdge Pvt. Ltd. plans to invest in a foreign entity that does not have limited liability.
The foreign entity is not in a strategic sector.
Explain whether the investment can be treated as Overseas Direct Investment (ODI).
(3 marks)
(e) Finovate Finance Pvt. Ltd. has financial assets equal to 48% of its total assets and
income from financial assets equal to 52% of its gross income.
Explain whether the company qualifies as an NBFC.
(3 marks)

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

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4. (a) Describe the essential characteristics that define a Micro Finance Institution (MFI).

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Under the Companies Act, 2013, outline the precautions that must be observed while
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drafting the Articles of Association of a company.

(c)

of a Trust or Society that are excluded from the computation of taxable income.

(d) Explain the manner in which foreign financial business collaborations support the

economic development of developing countries.

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(e) State the benefits of incorporating a Housing Finance Company.

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(3 marks each)

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OR (Alternative question to Q. No. 4)

4A. (i) Why is selecting the correct form of business entity important before starting operations ?

(ii) Explain the key corporate changes that take place when a private company converts

into a public company.

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(iii) Describe how the concept of limited liability operates within an LLP structure.

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(iv) Outline the functional role of a Project Office established by a foreign company in

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India.

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(v) State the significance of obtaining a Trade License for certain types of businesses.

(3 marks each)

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PART–II

5. NovaGen Life Sciences Pvt. Ltd., located in Hyderabad, is a biotechnology manufacturing
company engaged in producing diagnostic reagents and enzyme-based medical testing kits.
The establishment consists of fermentation units, reagent-mixing chambers, cold-storage rooms,
packaging lines, and a molecular biology laboratory. As on 31st March 2026, NovaGen employed
628 workers, including scientists, technicians, machine operators and administrative staff. Out
of these, 214 were women employees working in laboratory, packaging, HR and documentation
departments.

Due to the nature of its production, the State Government classified NovaGen as a hazardous
process establishment. The company operates three shifts (6 a.m. to 2 p.m., 2 p.m. to
10 p.m. and 10 p.m. to 6 a.m.) to maintain continuous production. As per company policy,
all supervisory and managerial employees must work in rotational shifts, including night duties.

On 12th January, 2025, Tanya, a postgraduate in Molecular Biology, joined NovaGen as
a Quality Assurance Supervisor. Her duties included sterility testing, reagent validation and
batch approval. Her work area was adjacent to the fermentation hall, where exposure to
disinfectants and biological agents was common. She was provided PPE such as gloves, masks,
and lab coats.

Her performance was consistently rated excellent and on 10th August 2025, she was promoted
to Deputy Manager (Quality Assurance). Her responsibilities increased, and she was required
to supervise multiple testing lines and ensure compliance with quality protocols.

On 15th October 2025, the HR department informed her that she would now be included
in the night-shift rotation. Tanya expressed concerns about travelling at night due to limited
public transport and inadequate lighting in the industrial zone. She also highlighted that the

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company-provided cab service for women employees was irregular and often unavailable during
late hours. Despite her concerns, management insisted that rotational shifts were mandatory

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for all supervisory staff and that no exceptions could be made.

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During November and early December, Tanya experienced fatigue and discomfort, which she

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initially attributed to the demanding shift schedule. On 22nd December 2025, after a routine

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medical examination, she was informed that she was pregnant. She immediately notified
and submitted a medical certificate advising her to avoid night shifts, prolonged standing, and
exposure to disinfectants and biological agents.

Tanya formally requested exemption from night duties and temporary reassignment to a safer
work area. However, management rejected her request, stating that the rotational shift policy

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applied uniformly and that the laboratory environment was safe enough. She was instructed

m Tanya experienced dizziness due to chemical
to continue performing her duties without modification.

s eshift,
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fumes from a disinfectant spill inglthe adjacent fermentation area. She was taken to a nearby
On 12th February 2026, during a night

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hospital, where doctors reiterated that she must avoid hazardous exposure. She again requested
reassignment, but the company refused, stating that operational requirements did not permit
any deviation from the shift policy.

On 1st April 2026, Tanya proceeded on maternity leave as per company procedure. She

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delivered a child on 10th May 2026 and formally informed the company on 12th May 2026.

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s shift. The communication stated that her early return would helpgstabilize production schedules
her on 20th May 2026, asking her to resume duties by 5th June 2026,

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Tanya replied that she could consider joining only if the company arranged a creche facility,
as she had an infant and required childcare support. She also pointed out that several women
employees had been requesting a creche for years, but no action had been taken. She emphasized
that without a creche, it would be impossible for her to resume duties so soon after childbirth.

Management responded that due to financial constraints and lack of space within the premises,
establishing a creche was not possible at present. They stated that the matter might be reviewed
in the future but could not be implemented immediately.

The situation created significant concern among women employees, who felt that the company
was not providing adequate welfare measures. Tanya's case highlighted issues relating to
workplace safety, maternity protection and statutory welfare facilities in hazardous establishments.

In view of the above, answer the following :
(a) Analyze whether NovaGen’s actions of compelling a pregnant woman to work night
shifts in a hazardous establishment and refusing reassignment violate constitutional
protections relating to labour welfare.
(b) Explain the statutory responsibilities of the Appropriate Authority to ensure safety of
women employed in hazardous operations under the Occupational Safety, Health and
Working Conditions Code 2020.
(c) Assess whether the management’s request directing Tanya to resume duty by
5th June 2026 shortly after childbirth is legally valid under the Code on Social Security
2020.
(d) To what extent the demand of Tanya to the management, to provide childcare Creche
facility is valid under the Code of Social Security, 2020 ?
(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) Karan has recently completed his engineering degree and joined ABC Ltd. as a trainee

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engineer. During his orientation, he is informed that every employee has specific statutory

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duties under Section 13 of the Occupational Safety, Health and Working Conditions

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Code

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Since Karan is not familiar with these legal duties, advise him on the duties

(5 marks)
(b) XYZ Ltd. is engaged in the manufacturing of heavy capital machinery and employs
approximately 740 workers due to its labour-intensive operations. Until 31st March
2026, the establishment did not have any trade union. In May 2026, a group of

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47 workers from the Finishing and Warehouse Section decided to form a trade union

emregistration of a new trade union under Section 6
and submit an application for its registration.

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Examine the statutory criteria for

a g Code 2020 in the context of their proposal.
(5 marks)
(c) Raghav is a mechanical engineer who worked for two years with RST Limited, a
public limited company engaged in the manufacture of heavy industrial chemicals. He
recently accepted a higher-paying position with ABC Co-operative Society, a housing
society and joined the new organization immediately. When he receives his first salary,

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Raghav notices that ABC Co-operative Society has not deducted any provident fund

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contribution from his wages, neither his share nor the employer’s share. He believes

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that ABC Co-operative Society is not complying with statutory requirements.

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Examine the validity of Raghav’s viewpoint in light of the

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(5 marks)

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(d) Rohan is an adolescent employed at GS General Grocery Store. His regular working
hours are from 10:00 a.m. to 4:00 p.m., which include intervals for rest and lunch.
In May 2026, a new manager named Kunal joined the store. Observing a higher
customer turnout during evening hours, Kunal changed Rohan’s shift from the morning
slot (10:00 a.m. to 4:00 p.m.) to an evening slot (5:00 p.m. to 9:00 p.m.), stating
that the new shift reduces his total working hours from six to four.
Considering the provisions of the Child and Adolescent Labour (Prohibition and
Regulation) Act 1986, examine the validity of the new shift timing proposed for Rohan.

(5 marks)

OR (Alternative question to Q. No. 6)
6A. (i) Discuss the need and objectives of bringing in the New Labour Codes.
(ii) Explain the qualifications required for engaging an apprentice and outline the
contractual formalities prescribed under the Apprentices Act, 1961.
(iii) What interim measures can the Internal Committee recommend to the employer during
the pendency of an inquiry under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, when such measures are requested
in writing by the aggrieved woman ?
(iv) What are the records, returns and notices that an employer is required to maintain
and comply with under the Code on Wages, 2019 ?

(5 marks each)

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