Bridge of love

Once upon a time two brothers who lived on adjoining farms fell into conflict.

It was the first serious rift in 40 years of farming side by side, sharing machinery, and trading labor and goods as needed without a hitch.Then the long collaboration fell apart. It began with a small misunderstanding and it grew into a major difference, and finally it exploded into an exchange of bitter words followed by weeks of silence.?

One morning there was a knock on John's door. He opened it to find a man with a carpenter's toolbox. "I'm looking for a few days work" he said." Perhaps you would have a few small jobs here and there I could help with? Could I help you?

"Yes," said the older brother. "I do have a job for you. Look across the creek at that farm. That's my neighbor, in fact, it's my younger brother.Last week there was a meadow between us and he took his bulldozer to the river levee and now there is a creek between us. ??

Well, he may have done this to spite me, but I'll go him one better. See that pile of lumber by the barn?I? want you to build me a fence - - an 8-foot fence -- so I won't need to see his place or his face anymore."

The carpenter said, "I think I understand the situation. Show me the nails and the post hole digger and I'll be able to do a job that pleases you."

The older brother had to go to town, so he helped the carpenter get the materials ready and then he was off for the day. The carpenter worked hard all that day measuring, sawing, nailing, and hammering.?

About sunset when the farmer returned, the carpenter had just finished his job. The farmer's eyes opened wide, his jaw dropped. There was no fence there at all.?

It was a bridge -- a bridge stretching from one side of the creek to the other! A fine piece of work handrails and all and the neighbor, his younger brother, was coming across, his hand outstretched."You are quite a fellow to build this bridge after all I've said and done."

The two brothers stood at each end of the bridge, and then they met in the middle, taking each other's hand. They turned to see the carpenter hoist his toolbox on his shoulder.

"No, wait! Stay a few days. I've a lot of other projects for you," said the older brother.

"I'd love to stay on," the carpenter said, "but, I have many more love bridges to build."

NI Act_Practical Problems_61

A cheque is drawn payable to “B or order”. It is stolen and the thief forges B’s endorsement and endorses it to C. The banker pays the cheque in due course. Can B recover the money from the banker.

NI Act_Practical Problems_60

A draws a cheque for Rs. 100 and hands it over to B by way of gift. Is B a holder in due course?? Explain the nature of his title, interest and right to receive the proceeds of the cheque.

NI Act_Practical Problems_59

A promissory was made without mentioning any time for payment. The holder added the words “on demand” on the face of the instrument .Does this amount to material alteration?

NI Act_Practical Problems_58

A draws a cheque in favour of M ,a minor. M endorses the same in favour of X. The cheque is dishonoured by the bank on grounds of inadequate funds. Discuss the rights of X.

Practical Problems_Partnership Act_14

A, B and C are partners in a Partnership firm. They were carrying their business successfully for the past several years. Spouses of A and B fought in ladies club on their personal issue and A's wife was hurt badly. A got angry on the incident and he convinced C to expel B from their partnership firm. B was expelled from partnership without any notice from A and B. Considering the provisions of Indian Partnership Act, 1932 state whether they can expel a partner from the firm?

Practical Problems_Partnership Act_13

A, B, and C are partners in a trading firm. A ,without the knowledge or consent of B and C, borrows Rs. 10,000 from D, a customer of the firm, in the name of the firm. A then buys some goods for his personal household use with that borrowed money. Can D hold B and C liable for the loan?

Practical Problems_Sales of Goods Act_10

A purchased a car for Rs.70,000 from B who had no title for it. A used the car for eight months when the true owner of the car spotted it and demanded it from A. Can the true owner get back his car and can A recover the money from B or not ?

Practical Problems_Sales of Goods Act_9

A stock of wheat was sold at an agreed price per ton. The wheat was to be weighed by the agents of the seller as also of the buyer for ascertainment of the price. A part of the wheat was weighed and carried away by the buyer’s agent but the remainder was swept away by the flood. Who will bear the loss of the remainder?

Contract Act_Practical Problems_112

Mr. Aman of Kolkata engaged Mr. Singh as his agent to buy a house in East Extension area. Mr. Singh bought a house for Rs.20 lakhs in the name of a nominee and then purchased it himself for Rs.24 lakhs. He then sold the same house to Mr. Aman for Rs.26 lakhs. Mr. Aman later comes to know the mischief of Mr. Singh and tries to recover the excess amount paid to Mr. Singh. Is he entitled to recover any amount from Mr. Singh? If so, how much? Explain.

Practical Problems_Sales of Goods Act_8

R gives his umbrella to M during raining season to be used for two days during Examinations. M keeps the umbrella for a week. While going to R’s house to return the umbrella ,M accidently slips and the umbrella is badly damaged. Who bear the loss and why?

Contract Act_Practical Problems_111

X buys from Y a painting which both believe to be the work of an old master and for which X pays a high price. The painting turns out to be only a modern copy .Discuss the validity of the contract?

Contract Act_Practical Problems_110

A entered into an agreement with S to deliver five dozen bottles of a particular brand of champagne to be manufactured in his factory. The champagne could not be manufactured because of strike by the workers and A failed to supply the said dozen of champagne to S. Decide whether A can be exempted from liability under the provisions of the Indian Contract Act, 1872.

Companies Act_Practical Problems_91

Articles of association of a company reserved the powers for calling the annual general meeting. The managing director of the company, without reference to the Board, called an annual general meeting. Is the annual general meeting validly called ? If not, what should be done to make it valid ?

Companies Act_Practical Problems_90

A whole-time director of a company made an invention during the course of his employment with the company. He patented the invention in his own name and appropriated the benefits to himself. Can he do so ?

Companies Act_Practical Problems_89

The auditor of Trilok Ltd. did not report on the matters specified in sub-section (1A) of Section 227 of the companies Act, 1956, as he was satisfied that no comment is required. Advise.

Companies Act_Practical Problems_88

The auditors were requested by the management to accept the draft minutes of Board, since the minutes book has been misplaced. Comment

Cima_Business Law_Practical Problems_1

The door of a public toilet had a defective pay-lock. A lady found herself locked in. She tried to climb out, allowing her weight to rest on the toilet roll, which rotated. She fell and was injured. Is she liable to get damage from the local authority ? If so how much ?

The court in Sayers v. Harlow UDC (1958)(which described her plight as an ‘inconvenience’) held that her injuries were 75 per cent the fault of the local authority and 25 per cent her own fault. Damages were reduced accordingly.Here the lady is partly liable for her mistake and therefore rule of contributory damage will be applicable.

Contract Act_Practical Problems_109

H, a captain in the army, was stationed in a house requisitioned by the Government. He accidently found a broach in a room occupied by him. He handed over the broach to the police, and they, failing in their attempts to discover the right owner delivered it to P, who was the owner of the house. P sold the jewel for Rs. 2,000. H sued for the recovery of the broach or its value on the ground that he was the finder. Will he succeed?

Motivational

Genuine love and kindness is desperately needed in this world. It comes from appreciating the object, and rejoicing in the object, wanting the object to be happy and well, but holding it lightly, not tightly. And this goes for possessions too. You are in an extremely materialistic society in which the possession of more and bigger and better is held up as the total criteria for being happy. […]

What we own is not the problem, it's our attitude towards our possessions. If we have something and we enjoy it, that's fine. If we lose it, then that's OK. But if we lose it and we are very attached to it in our heart, then that's not fine. It doesn't matter what the object is, because it's not the object which is the problem. The problem is our own inner grasping mind that keeps us bound to the wheel, and keeps us suffering. If our mind was open and could just let things flow naturally, there would be no pain. Do you understand? We need our everyday life to work on this, to really begin to see the greed of attachment in the mind and gradually begin to lessen and lessen it.

in India to catch monkeys. People take a coconut and make a little hole just big enough for a monkey to put its paw through. And inside the coconut, which is nailed to a tree, they have put something sweet. So the monkey comes along, sees the coconut, smells something nice inside, and he puts his hand in. He catches hold of the sweet inside, so now he has a fist. But the hole is too small for the fist to get out. When the hunters come back, the monkey's caught. But of course, all the monkey has to do is let go. Nobody's holding the monkey except the monkey's grasping greedy mind. Nobody is holding us on the wheel, we are clinging to it ourselves. There are no chains on this wheel. We can jump off any time. But we cling. And clinging causes the pain.

--Tenzin Palmo

Transfer of Property Act_2

Arjun transfers his property to Bhanu for life and after Bhanu’s death to that of his unborn sons as shall first attain the age of 25 years and if no son of Bhanu shall attain that age, to Chandan who is living at the time of the transfer. Decide the validity of this transfer.

As per Section 13 of the Transfer of Property Act, 1882, transfer of property to an unborn person can only take place if before such a transfer; a life estate is transferred to a person existing at the date of transfer. Moreover, it should not be a partial interest, but the entire interest that is transferred to the unborn. The vesting of absolute interest in favour of an unborn person may be postponed until he attains full age. Such an unborn person should get full rights to that property, and no further rights can be created to that property after those of the unborn. Hence, the transfer is valid till it pertains to the transfer in favour of Bhanu, but the transfer to Chandan is not valid, as he is living at the time of the tranfer, while the sons of Bhanu are as yet unborn.

Limitation Act_1

Arpit took a debt of Rs.10,000 from Bharat on January, 1998 and promised to pay by 31st December, 2003. He could not pay such debt within the stipulated time. On 1st December, 2006, Arpit paid Rs.500 as interest against such debt to Bharat against receipt. Bharat filed a suit against Arpit to recover such debt on 15th December, 2008. Whether the suit filed by Bharat is within the period of limitation ? Decide with reasons citing relevant provisions of the law.

As per section 19 of the Limitation Act, 1963, where part payment of debt or interest on debt is made, then a fresh period of limitation begins from that date. The limitation period for loans and contracts is three years. Since the interest is paid on 1st December, 2006, and the suit against Arpit to recover such debt is filed on 15th December, 2008, it is within the limitation period.

Indian Evidence Act_1

On 20th March, Kamal told his wife that he was going to Berhampore, as Pankaj’s wife has written a letter and asked him to come and receive payments due to him. On 21st March, Kamal left his house in time to catch a train for Berhmpore, where Pankaj lived with his wife. On 23rd March, Kamal’s dismembered body was found in a box which had been purchased for Pankaj. Decide whether on the trial of Pankaj for the murder of Kamal, the statement made by Kamal to his wife was admissible in evidence. If so, on what grounds ?

As per the Indian Evidence Act, Section 122, “ No person who is or has been married, shall be compelled to disclose any communication made to him during marriage by any person to whom he is or has been married; nor shall he be permitted to disclose any such communication, unless the person who made it, or his representative in interest, consents, except in suits between married persons, or proceedings in which one married person is prosecuted for any crime committed against the other.” Hence, in this case, if the statement is willingly given by his wife, it is admissible as evidence.

Constitution of India_1

In a case, Hamid was terminated from the police service. Hamid filed a writ petition against termination order on the ground that a reasonable opportunity of being heard was not given to him by the government. The writ petition was dismissed by the court as the government proved that reasonable opportunity of being heard had been given to the petitioner. Afterwards, Hamid filed another writ petition on the ground that as he was appointed by the Director General of Police, termination by the order of Deputy Inspector General of Police was in violation of Article 311(1) of the Constitution of India. Decide the validity of the second writ petition.

Once the court has dismissed a writ petition, the same may not be presented again to the same court. In this case, the court has dismissed the petition as the government proved that reasonable opportunity of being heard had been given to the petitioner. The second writ Hamid filed, on the ground that as he was appointed by the Director General of Police, and that the termination by the order of Deputy Inspector General of Police was in violation of Article 311(1) of the Constitution of India, hence, is not valid.

Perception

Washington, DC Metro Station on a cold January morning in 2007. The man with a violin played six Bach pieces for about 45 minutes. During that time approximately two thousand people went through the station, most of them on their way to work. After 3 minutes a middle aged man noticed there was a musician playing. He slowed his pace and stopped for a few seconds and then hurried to meet his schedule.

4 minutes later: The violinist received his first dollar: a woman threw the money in the hat and, without stopping, continued to walk.

6 minutes: A young man leaned against the wall to listen to him, then looked at his watch and started to walk again.

10 minutes: A 3-year old boy stopped but his mother tugged him along hurriedly. The kid stopped to look at the violinist again, but the mother pushed hard and the child continued to walk, turning his head all the time. This action was repeated by several other children.. Every parent, without exception, forced their children to move on quickly.

45 minutes:The musician played continuously. Only 6 people stopped and listened for a short while. About 20 gave money but continued to walk at their normal pace. The man collected a total of $32.

1 hour: He finished playing and silence took over. No one noticed. No one applauded, nor was there any recognition.

No one knew this, but the violinist was Joshua Bell, one of the greatest musicians in the world. He played one of the most intricate pieces ever written, with a violin worth $3.5 million dollars. Two days before, Joshua Bell sold out a theater in Boston where the seats averaged $100.

This is a true story. Joshua Bell playing incognito in the metro station was organized by the Washington Post as part of a social experiment about perception, taste and people's priorities. The questions raised: in a commonplace environment at an inappropriate hour, do we perceive beauty? Do we stop to appreciate it? Do we recognize talent in an unexpected context?

One possible conclusion reached from this experiment could be this: If we do not have a moment to stop and listen to one of the best musicians in the world, playing some of the finest music ever written, with one of the most beautiful instruments ever made..... How many other things are we missing?

The Two Pots

Two Pots, one of brass and the other of clay, stood together on the hearthstone. One day the Brass Pot proposed to the Earthen Pot that they go out into the world together. But the Earthen Pot excused himself, saying that it would be wiser for him to stay in the corner by the fire.

“It would take so little to break me,” he said. “You know how fragile I am. The least shock is sure to shatter me!”

“Don't let that keep you at home,” urged the Brass Pot.

“I shall take very good care of you. If we should happen to meet anything hard I will step between and save you.”

So the Earthen Pot at last consented, and the two set out side byside, jolting along on three stubby legs first to this side, then to that, and bumping into each other at every step.

The Earthen Pot could not survive that sort of companionship very long. They had not gone ten paces before the Earthen Pot cracked, and at the next jolt he flew into a thousand pieces.

Moral:The strong and the weak cannot keep company. Equals make the best friends. A small difference can lead to major consequences.

The Lark and Her Young Ones

A Lark made her nest in a field of young wheat. As the days passed, the wheat stalks grew tall and the young birds, too, grew in strength. Then one day, when the ripe golden grain waved in the breeze, the Farmer and his son came into the field.
"This wheat is now ready for reaping," said the Farmer. "Wemust call in our neighbors and friends to help us harvest it."

The young Larks in their nest close by were much frightened, for they knew they would be in great danger if they did not leave the nest before the reapers came. When the Mother Lark returned with food for them, they told her what they had heard.

"Do not be frightened, children," said the Mother Lark. "If the Farmer said he would call in his neighbors and friends to help him do his work, this wheat will not be reaped for a while yet."

A few days later, the wheat was so ripe, that when the wind shook the stalks, a hail of wheat grains came rustling down on the young Larks' heads.

"If this wheat is not harvested at once," said the Farmer, "we shall lose half the crop. We can not wait any longer for help from our friends. Tomorrow we must set to work, ourselves."

When the young Larks told their mother what they had heard that day, she said:
"Then we must be off at once. When a man decides to do his own work and not depend on any one else, then you may be sure there will be no more delay."

There was much fluttering and trying out of wings that afternoon, and at sunrise next day, when the Farmer and his son cut down the grain, they found an empty nest.

Moral:Self-help is the best help.
Procrastination is the thief of time.

management lesson

One fine day, a bus driver went to the bus garage, started his bus, and drove off along the route. No problems for the first few stops - a few people got on, a few got off, and things went generally well.

At the next stop, however, a big hulk of a Pathan got on. Six feet four, built like a wrestler, arms hanging down to the ground. He glared at the conductor and said, "Pathan doesn't pay!" and sat down at the back.

Conductor didn't argue with Pathan, but he wasn't happy about it. The next day the same thing happened - Pathan got on again, made a show of refusing to pay, and sat down. And the next day, and the next.

This grated on the bus driver, who started losing sleep over the way Pathan was taking advantage of poor conductor. Finally he could stand it no longer.

He signed up for body building courses, karate, judo, and all that good stuff.By the end of the summer, he had become quite strong; what's more, he felt really good about himself.

So, on the next Monday, when Pathan once again got on the bus and said, "Pathan doesn't pay!"

The driver stood up, glared back at Pathan, and screamed, "And why not?"

With a surprised look on his face, Pathan replied, "Pathan has a bus pass."

Management Lesson: Be sure there is a problem in the first place before working hard to solve one.

Transfer of Property Act_1

Ajit, a Hindu, who has separated from his father Baljit, sells to Charanjt three fields X, Y and Z representing that Ajit is authorised to transfer the same. Of these fields, Field-Z does not belong to Ajit, it having been retained by Baljit on the partition of property. But subsequently on Baljit’s death, Ajit, as an heir obtains Field-Z. Decide the validity of the sale of the above said fields in a circumstance where Charanjit does not rescind the contract of sale.

As per the provisions of Section 43 of the Transfer of Property Act, 1882, when a transferor fraudulently represents that he has the right to transfer a property, such transfer will be operational at he option of the transferee, if the contract still subsists.

Hence, in this case, the validity of the sale of the said fields will subsist in a circumstance where Charanjit does not rescind the contract of sale.

Contract Act_Practical Problems_108

A, a merchant who is in Calcutta, makes an offer on telephone to sell his house to his friend B, who is in Bombay. B, hearing the offer on telephone, gives his acceptance instantaneously. Where and when do you think the contract is concluded? What would happen had the parties negotiated by post?

Contract Act_Practical Problems_107

A agrees to sell 2,000 shares of a company to B at Rs. 170 per share. B was to take delivery of the shares on 15th Feburary, 2008. By that date, there was depression in the share market and the value of the share had gone down to Rs. 80 only. B did not take delivery of the shares on 15th February, 2008. A retained the shares and ultimately sold them in September, 2008 at Rs. 170 per share. A files a suit against B for the recovery of Rs. 1,80,000 as damages. B contends that as A did not suffer any losses, he was not entitled to damages as claimed by the plaintiff. Decide the case.

Contract Act_Practical Problems_107

A agrees to sing at B’s theatre at the night on January 1, 2008 but falls ill and is unable to perform on the agreed date. B sues A for breach of contract and claim damages. Can A take plea of frustration ?

Contract Act_Practical Problems_106

A agreed to supply 500 picture tubes of color television at Rs. 3,000 per piece to Bon 1-1-2008. The goods were to be delivered within one month. On 15-1-2008, the Government announces enhancement in the excise duty leviable on these picture tubes and in consequence the cost price rose from Rs. 2,700 to Rs. 4,000 per tube. A declines to supply the goods. Discuss Can A take plea of frustration ?

Contract Act_Practical Problems_105

M’s son is bedridden and he needs money badly for his treatment. He agrees to dispose of his shop worth Rs. 5 lakh for Rs. One lakh only to N. After one month of the agreement, M applies for cancellation of the agreement on the ground of undue influence’. Will he succeed?

Contract Act_Practical Problems_104

A filed a suit against his brother B for possession of a half-share in the property which was alleged to be ancestral one. The suit was dismissed. Later on, to secure reconciliation and family peace, B executed a registered deed agreeing to transfer the half-share in the said property to A. A filed a suit for possession on the basis of this instrument. B raised the plea that the agreement was without consideration and hence void. Decide.

Contract Act_Practical Problems_103

B, a young wrestler of about 17½ years, looking much older than his age, procured a loan of Rs. 45,000 on interest at 12% per annum from M, a moneylender and executed a promissory note in his favour. B represented himself to be 21 years old at the time of getting the said loan. B invested Rs. 40,000 with a limited company on interest at 18% per annum and lost the remaining amount of Rs. 5,000 in gambling. However, the said company went into the liquidation and B’s entire investment was lost. When M filed a suit against B for recovery of the aforesaid amount, the latter pleaded ‘minority’. How will you adjudicate the matter?

Famous quotes of Dhirubhai Ambani..:

From beginning Dhirubhai was seen in high-regard. His success in the petro-chemical business and his story of rags to riches made him a cult figure in the minds of Indian people. As a quality of business leader he was also a motivator. He gave few public speeches but the words he spoke are still remembered for their value.

• " With the force of 3million investors RIL will reap the title "World's Biggest Company" ".

*"Tax is for the poor or the stupid people."

*"I am deaf to the word "no"."

• "Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it."

• "Think big, think fast, think ahead. Ideas are no one's monopoly"

• "Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance and for India ."

• "You do not require an invitation to make profits."

• "If you work with determination and with perfection, success will follow."

• "Pursue your goals even in the face of difficulties, and convert adversities into opportunities. "

• "Give the youth a proper environment. Motivate them. Extend them the support they need. Each one of them has infinite source of energy. They will deliver."

• "Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth"

• "We bet on people."

• "Meeting the deadlines is not good enough, beating the deadlines is my expectation. "

• "Don't give up, courage is my conviction."

• "We cannot change our Rulers, but we can change the way they Rule Us."

• "Dhirubhai will go one day. But Reliance's employees and shareholders will keep it afloat. Reliance is now a concept in which the Ambanis have become irrelevant."

mouse trap

A mouse looked through the crack in the wall to see the farmer and his wife open a package.

What food might this contain?' the mouse wondered - - -he was devastated to discover it was a mousetrap.

Retreating to the farmyard, the mouse proclaimed the warning : There is a mousetrap in the house! There is a mousetrap in the house!' The chicken clucked and scratched, raised her head and said, 'Mr.Mouse, I can tell this is a grave concern to you, but it is of no consequence to me. I cannot be bothered by it.'

The mouse turned to the pig and told him, 'There is a mousetrap in the house! There is a mousetrap in the house!' The pig sympathized, but said, 'I am so very sorry, Mr.Mouse, but there is nothing I can do about it but pray. Be assured you are in my prayers.'

The mouse turned to the cow and said, 'There is a mousetrap in the house! There is a mousetrap in the house!' The cow said, 'Wow, Mr. Mouse. I'm sorry for you, but it's no skin off my nose..'


So, the mouse returned to the house, head down and dejected, to face the farmer's mousetrap . . . alone.

That very night a sound was heard throughout the house -- like the sound of a mousetrap catching its prey. The farmer's wife rushed to see what was caught. In the darkness, she did not see it was a venomous snake whose tail the trap had caught. The snake bit the farmer's wife.

The farmer rushed her to the hospital, and she returned home with a fever.

Everyone knows you treat a fever with fresh chicken soup, so the farmer took his hatchet to the farmyard for the soup's main ingredient. But his wife's sickness continued, so friends and neighbors came to sit with her around the clock. To feed them, the farmer butchered the pig. The farmer's wife did not get well; she died.

So many people came for her funeral, the farmer had the cow slaughtered to provide enough meat for all of them.

The mouse looked upon it all from his crack in the wall with great sadness.

So, the next time you hear someone is facing a problem and think it doesn't concern you, remember ----

when one of us is threatened, we are all at risk. We are all involved in this journey called life.. We must keep an eye out for one another and make an extra effort to encourage one another.

REMEMBER. . . . . . EACH OF US IS A VITAL THREAD IN ANOTHER PERSON'S TAPESTRY; OUR LIVES ARE WOVEN TOGETHER FOR A REASON.

Contract Act_Practical Problems_102

A writes a letter to B offering to buy his Maruti 800 car for Rs. 1,75,000 saying therein “unless I hear from you, I shall take the car to be mine for Rs. 1,75,000”. B gives no reply but sells the car to C. A. seeks your advice whether he can file a suit against B for damages on account of breach of contract. Advise A.

Contract Act_Practical Problems_101

Novelty Computers (P) Ltd. Kamala Nagar, New Delhi exhibited in their showroom a computer with latest configuration and multit-media hardware and attached to it a price tag of Rs. 27,999 (inclusive of all taxes). X visits the showroom of the company and tenders a cash amount of Rs. 27,999 for the purchase of the said computers. The company, however, refuses to sell the computer saying that it has only one piece and that too has already been sold to someone else. Discuss whether X can compel the company to sell him the computer.

Contract Act_Practical Problems_100

A, who was a tailor, delivered a sewing machine and some cloth to B Transport Co. to be sent to a place where he expected to carry on his business at high profit by reason of a forthcoming festival. Through the fault of B Transport Co. goods were delayed and delivered much after the conclusion of the festival. A had not given any notice to B. Transport Co. of his special purpose. A claims as damages the expenses of traveling upto the place of festival and of staying there and loss of profits which he would have earned. Discuss the principles applicable for measure of damages in this case.

Contract Act_Practical Problems_99

Because of disagreements, quarrels and disputes between an old father and his modern young son, father by written agreement duly attested by Notary promises to pay Rs. 15000/- p.m. to his son for living separately. Do the following facts create contractual obligations ?

Contract Act_Practical Problems_98

A is the owner of a farm house in Delhi known as Bumper Farms. B being interested

in purchasing the same sent a telegram to A, “Will you sell me Bumper Farms? Telegraph the lowest case price.” A in reply telegraphed. “Lowest price for Bumper Farms Rs. 25 crores.” B sent another telegram to A saying, I agree to buy Bumper Farms for Rs. 25 crores.” Whether exchange of telegraphs create the contract ? Why ?

Bonus Act_Practical Problems_35

Skypark Wooden Toys Limited was established at Kolkata in the year 2005 employing 5 100 workmen. Since then the company suffered the losses, but minimum bonus was paid in the accounting years of 2006 and 2007. In the accounting year 2008 the company earned huge profits. After mitigating the previous losses the company is having surplus profits and wants to pay the bonus to its workmen. Skypark Wooden Toys Limited wants the legal advice on the following issues :

(a) How much minimum and maximum bonus may be paid to the workmen ?

(b) Whether the company may adjust the puja bonus already paid to the workmen while calculating the amount of bonus payable to workmen of that accounting year.

(c) Company wants to give wooden toys as bonus instead in cash. Whether the Company can do so ?

Advice the Skypark Wooden Toys Limited, stating the provisions of the Payment of Bonus Act, 1965.

(a) Payment of minimum bonus and maximum bonus : -

Every employer shall be bound to pay to every employee in respect of every accounting year, minimum bonus which shall be 8.33% of the salary or wages earned by the employee during the accounting year or Rs.100, whichever is higher whether or not the employer has any allocable surplus in the accounting year. But if the employee has not completed 15 years of age at the beginning of the accounting year he will be entitled to a maximum bonus which shall be 8.33% of the salary or wage during the accounting year Rs.60, whichever is higher. In view of much minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum 20% of such salary or wage.

(b) As per 17 of payment of bonus act, 1965, if in an accounting year, an employer has paid any pooja bonus or other customary bonus to employee or has paid a part of bonus payable under the act before the date on which such bonus becomes payable, the employer may deduct this amount from the final bonus payable. But the amount may be deducted only from the bonus of that accounting year.

(c) Section 19 says that all amounts payable to employee shall be paid in cash no bonus shall be paid to employees in the form other than cash. Hence, company can’t give wooden lays as bonus instead of cash.

Companies Act_Practical Problems_87

The articles of ABC Limited provided that only those shareholders would be entitled to vote whose names have been there on the Register of Members for two months before the date of the meeting. X, a member, of the ABC Limited was holding 200 equity shares of the company. X transferred his shares to Y before one month from the date on which the meeting was due. The name of Y could not be entered in the Register of Members as the application of transfer of shares was pending. X attended the meeting but he was prohibited by the company from exercising his voting right on the ground that he has not hold his shares for specified period as provided in the articles before the date of the meeting. State whether X can exercise his voting right in the meeting ? State also the grounds upon which X may be excluded from exercising his voting rights in the meeting of the shareholders.

According to provision of companies Act, 1956. A member of a company has no voting right unless he actually acquires shares. A person becomes member only when his name is entered in register of member of the company. Till then, he is only holder.
In case of transfer of share, transfer is entitled to vote when his name is entered into register of member. The case is, X transfer his shares to y before one month from the date on which meeting was done and name of y is not entered is the register of member as the application of transfer of share is pending. Article of company provided that only there shareholders would be entitled to vote whose names have been there on register of members for two month of the above. Since transfer of shares procedure is pending and the name of y is not entered into register of member. Hence y is neither a shareholder nor he has right to vote. And x can exercise his voting right in the meeting as his name has not been struck off from register of member.
But if transfer process is complete and x name is struck off from company’s register of member than he is excluded from the voting right.

Contract Act_Practical Problems_97

A, the bailor, pledges cinema projector and other accessories with Cine Association Co-operative Bank Limited, the bailee, for loan. A requests the bank to allow the pledged goods to remain in his possession and promises to hold the same in trust for the bailee and also further promises to handover the possession of the same to the bank whenever demanded. Examining the provisions of Indian Contract Act, 1872 decide, whether a valid contract of pledge has been made between A, the bailor and Bank, the bailee ?

Where a mercantile agent is, with the consent of the owner, in possession of goods or the documents of title to goods, any pledge made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorized by the owner of the goods to make the same; provided that the pawnee acts acts in good faith and has not at the time of the pledge notice that the pawnor has no authority to pledge. As per the provisions above it is clearly evident that contract made between A & Bank is valid.

SEBI Guideline_Practical Problems_1

The Balance Sheet of Get Well Soon Ltd. as at 31.3.2009 disclosed the following details:
(i) Authorized share capital Rs. 400 crores
(ii) Paid up share capital Rs. 150 crores
(iii) Reserves and surplus Rs. 750 crores
The company has issued in the year 2004, Fully Convertible Debentures of Rs. 100 crores which are due for conversion in the year 2009. The company proposes, after conversion of Debentures to issue Bonus shares in the ratio of 1 1. Explain briefly the requirements of the Companies Act, 1956 and the Securities and Exchange Board of India (SEBI) guidelines to be followed by the company in this regard.

Competition Act_Practical Problems_5

The Central Government on the recommendation of selection committee appoints Mr. RKP aged 56 years as Member of the Competition omission of India to be effective from 1st January, 2009. State with reference to the provisions of Competition Act, 2002 the term for which he will be appointed and whether he can be reappointed as such and also if he resigns two years whether the vacancy can be filled up by the Chairman of the commission.

FEMA_Practical Problems_12

State the kind of approval required for the following transactions under the Foreign Exchange Management Act, 1999.:
(i) L a famous playback singer of India wants to perform a musical night in Paris for Indians residing there. Foreign exchange to the extent of US D 20,000 is required for this purpose.
(ii) M requires US D 5,000 to make payment related to ‘call back services’ of telephone.
(iii). N wants to pursue a course in business management in New York. He wants to draw US D 50,000 towards expenses for studying abroad.
(iv) R wants to draw US D 20,000 to make donation to a charitable trust situated in South Korea.

Quick management lesson

Ek din ek kutta jungle main raasta kho gaya . Tabhi usane dekha ek sher uskii taraf aa raha hai. Kutte ki saans rookh gayi. "Aaj to kaam tamaammera!" usne socha.

Phir usne saamane kuchh sookhi haddiyan padi dekhi.

Woh aate hue sher ki taraf peeth kar ke baith gaya aur ek sookhi hadii ko choosane laga aur zor zor se bolne laga, "wah! Sher ko khaane ka maza hi kuchh aur hai. Ek aur mil jaaye to poori daawat ho jayegi!" Aur usne zorse dakaar mara.

Is bar sher jhatkaa laga. Usne socha "ye kutta to sher ka shikar karta hai! Jaan bacha kara bhago!" Aur sher wahan se champat ho gaya .

Ped par baitha ek Bandar yeh sab tamasha dekh raha tha. Usne socha yeh mauka achha hai sher ko sari kahani bata deta hoon - sher se dosti ho jayegi aur usase zindagi bhar ke liye jaan ka khatra dur ho jayega. Woh phataphat sher ke pichhe bhaga. Kutte ne Bandar ko jaate hue dekh liya aur samajh gaya ki koi locha hai. Udhar Bandar ne sher ko sab bata diya ki kaise kutte ne use bewakoof banaya hai. Sher zor se dahada, "chal mere sath abhi uski leela kahatam karta hu" aur Bandar ko apani peeth parbaitha kar sher kutte ki taraf lapka..

Can u imagine the quick management by the DOG......... .......... ...

Kutte ne sher ko aate dekha to ek bar phir uskii taraf peeth karke baithgaya aur zor zor se bolne laga, "Is Bandar ko bhej ke 1 ghanta ho gaya, saala ek sher phaans kar nahi la sakta!"

Peace

There once was a king who offered a prize to the artist who would paint the best picture of peace. Many artists tried. The king looked at all the pictures. But there were only two he really liked, and he had to choose between them.

One picture was of a calm lake. The lake was a perfect mirror for peaceful towering mountains all aroundit. Overhead was a blue sky with fluffy white clouds. All who saw this picture thought that it was a perfect picture of peace.

The other picture had mountains, too. But these were rugged and bare. Above was an angry sky, from which rain fell and in which lightning played. Down the side of the mountain tumbled a foaming waterfall. This did not look peaceful at all.

But when the king looked closely, he saw behind the waterfall a tiny bush growing in a crack in the rock. In the bush a mother bird had built her nest. There, in the midst of the rush of angry water, satthe mother bird on her nest - in perfect peace.

Which picture do you think won the prize?

The king chose the secondpicture.

Do you know why?

"Because," explained the king, "peace does not mean to be in a placewhere there is no noise, trouble, or hard work. Peace means to be in the midst of all those things and still be calm in your heart. That is the real meaning of peace."

Life is tough, but it's a lot tougher when you are Stupid

First-year students at Texas A & M's Vet school were attending their first Anatomy class, with a dead pig.

They all gathered around the surgery table with the body covered with a White sheet. The professor started the class by telling them, 'In Veterinary Medicine it is necessary to have two important qualities as a Doctor: The first is that you not be disgusted by anything involving the Animal body'. For an example, the Professor pulled back the sheet, touched his finger in the mouth of the dead pig, withdrew it and put his Finger in his mouth. 'Go ahead and do the same thing,' he told his students.

The students freaked out, hesitated for several minutes. But eventually took turns putting their finger in the mouth of the dead pig and tasted in their mouth.

When everyone finished, the Professor looked at them and said, 'The Second most important quality is observation. I touched with my middle Finger and tasted on my index finger. Now learn to pay attention...

Moral of the story:
Life is tough, but it's a lot tougher when you are Stupid....

SCRA_2

The Mewar Rural Financial Corporation, Udaipur, established under a special statute issued 5 years bonds to public directly and not through any Stock Exchange. Decide whether the said act of the Mewar Rural Financial Corporation is in violation of the provisions of the Securities Contracts (Regulation) Act, 1956.

SCRA_1

MIs Goyanka & Company, which is a member of a recognised stock exchange desire to-buy and sell shares of Crossroads Company Limited on their own count as well as on behalf of investors. Advise MIs Goyanka & Company whether there are any restrictions for dealing in securities on their own count under the provisions of the Securities Contracts (Regulation) Act, 1956.

Companies Act_Practical Problems_86

The Board of Directors of XYZ Ltd;. filled up a casual caused by the death of Mr. P by appointing Mr. C as a director on 3rd April, 2009. Unfortunately Mr. C expired on 15th May, 2009 after working about 40 days as a director. The Board now wishes to fill up the casual vacancy by appointing Mrs. C in the forthcoming meeting of the Board. Advise the Board in this regard.

Practical Problems_Sales of Goods Act_7

‘A’ raised a loan by pledging a Railway Receipt of goods in transit, as security, with a money lender ‘X’. ‘A’ got the Railway Receipt back from ‘X’ in order to get the goods released from the Railways. Instead, ‘A’ pledged the same Railway Receipt with another lender ‘Y’, to raise another loan. In a suit for recovery filed by ‘X’, ‘Y’ pleads estoppels against ‘X’ for not endorsing the Receipt “Under Lien Pledge” and thus, representing that the said receipt is free from lien, which facilitated ‘A’ to raise a second loan against the receipt. Decide, if estoppel is rightly invoked by ‘Y’ against ‘X’?

Practical Problems_Sales of Goods Act_6

The plaintiff, a butcher bought a carcass of a goat from the defendant, who was a meat shopkeeper in a meat market. The plaintiff in ignorance of the fact that it was exposed to tuberculosis, offered it for sale. It was seized by a Food Inspector, who adjudged the same as unfit for consumption, and condemned it to be destroyed. The plaintiff was also fined. Thereafter the plaintiff filed a suit against the defendant to recover the amount of fine and damages for breach of warranty under the Sale of Goods Act. The defendant pleaded that by usage of trade such an implied warranty was excluded. Decide.

Practical Problems_Sales of Goods Act_5

B’ purchases a motor car from ‘A’ which he uses for some months. It turns out that the car sold by ‘A’ to ‘B’ was a stolen one and has to be restored to the rightful owner. ‘B’ brings an action against ‘A’ for the return of the price. Will he succeed? Decide giving reasons.

Practical Problems_Partnership Act_12

‘A’ and ‘B’ are carrying on the business of grain merchants, in partnership. It is provided in the partnership deed that disputes relating to the affairs of the business would be preferred to arbitration. Arbitrators decided in favour of ‘A’. ‘B’ refuses to abide by the award. ‘A’ sues for enforcement of the award. Incidentally the firm is not registered under the Indian Partnership Act. Can A file case in this situation ?

Practical Problems_Partnership Act_11

‘A’ and ‘B’ carry on motor repair business in partnership. Under the deed of partnership, ‘A’ has no power of borrowing money. ‘C’ a creditor, knowing nothing about restrictions on the power of ‘A’ for borrowing money, lends ‘A’ money for the use of the firm. Is the firm liable to ‘C’ for repayment of the money lent by him to ‘A’. Refer to statutory provisions and decided cases.

Contract Act_Practical Problems_96

A company agreed to supply one thousand blankets to ‘X’ by a particular date. Rupees 10, 000/- were paid as an advance to the company by ‘X’. Before the due date of performance of the contract, the company informed ‘X’, that it would not supply blankets on due date and that he should treat the contract as repudiated. ‘X’ did not accept the repudiation, and kept on demanding the supply till the last date/ due date of performance of the contract. In the meantime, war between India and China broke out, and all the stocks of the company were requisitioned by Government for military purposes. ‘X’ files a suit against the company for damages for breach of contract. Will he succeed? Decide by referring to the provisions of the Indian Contract Act and decided cases.

Contract Act_Practical Problems_95

A, the owner of a hotel, contracts with B, to give him accommodation therein for the sale of his hosiery products and to furnish the accommodation with necessary furniture. A refuses to perform the contract. Can specific performance order be issued by court in this circumstances ?

Companies Act_Practical Problems_85

The Articles of Association of a company provide that the meeting of the Board of
Directors of the company will be held on the last Friday of every month. The Secretary of the company as a result does not serve the notice to the individual directors of the company. Consequently, a meeting of the Board of Directors was held on 20th February, 2008. The meeting was attended by all the directors with the exception of two directors out of a total of 10 directors and certain resolution were passed. The two absentee directors object to the meeting and the proceedings of the meeting for want of notice. Referring to the provisions of the Companies Act, 1956, decide:
(i) Whether the objection raised by the two absentee directors is valid?
(ii) Would your answer be the same in case the Secretary of the company, instead of sending notice on a usual format to the individual directors, sent a copy of the
Articles of Association to each one of the directors?

Section 286 of the Companies Act, 1956 does not specify any form of notice or period of notice. Usually, a week’s notice is considered sufficient. However, if the Articles provide that Board Meetings will be held on fixed days of every month or where the directors are duly informed that in future all meetings of the Board will be held on a fixed day of every month, it will be sufficient compliance with the statute [A. Chettiar Firm v. Kaleshwar Mills]. But, even where meetings are held on a fixed day of every month, a notice is usually sent to the directors as a reminder.

Limited Liability Partnership_12

Who can be a “Designated Partner”?

Every LLP shall be required to have atleast two Designated Partners who shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.

Limited Liability Partnership_11

What are the requirements in respect of “Designated Partners”?

Appointment of at least two “Designated Partners” shall be mandatory for all LLPs. “Designated Partners” shall also be accountable for regulatory and legal compliances, besides their liability as ‘partners, per-se”.

Competition Act_Practical Problems_4

The Association of Truck Operators of India by agreement insisted that members of the association shall not deal with the non-members in transportation of goods. The Association claims that this agreement is entered for the welfare of trade and not for anyother purpose. In your opinion whether the agreement would be under the purview of the Competition Act, 2002. Whether your answer would be different if the association attempts to control the provisioning of services rendered by its members.



"Cartel" includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services; The term cartel like agreement has been given an inclusive meaning. Thus an association for the welfare of the trade or formed for any other purpose not mentioned in the aforesaid definition will not be a cartel. It is only when an association, by agreement amongst themselves, limits control or attempts to control the production, distribution, sale or price of, or, trade in goods or provision of services, that it will be a cartel.

Companies Act_Practical Problems_84

The Board of Directors of ABC Private Limited having a paid-up share capital of Rs. 1 Crore consists of two directors, one of them, viz, Mr. S possesses membership of the Institute of Company Secretaries of India. The company desires to appoint him as a company secretary also. State the legal position.

Under Section 383A of the Companies Act, 1956, in case of a company having only two directors, none of them can be appointed company secretary in spite of possessing the requisite qualification. In view of the overriding effect of Section 383A, consideration of section 314 is unnecessary.

Limited Liability Partnership_10

What are the qualifications for becoming a partner?

Any individual or body corporate may be a partner in a LLP. However an individual shall not be
capable of becoming a partner of a LLP, if—
(a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
(b) he is an undischarged insolvent; or
(c) he has applied to be adjudicated as an insolvent and his application is pending.

Limited Liability Partnership_9

Whether a body corporate may be a partner of an LLP?


Yes.

Companies Act_Practical Problems_83

XYZ Limited has its subsidiary company PRM Ltd, which is formed to carry out some of the objectives of XYZ Limited. XYZ Limited suspends one of its several businesses, by passing a resolution at the company‘s extraordinary general meeting, with effect from Ist January 2008. The business so suspended continues to be suspended until March 2008. On Ist April 2008, a group of shareholders of XYZ Limited file a petition in the court for winding of the company on the ground of suspension of business by the company. Referring to the provisions of the Companies Act, 1956, decide:
(i) Whether the shareholders’ contention shall be tenable?
(ii) What would be your answer in case XYZ Limited suspends all its business?



Section 433 provides that if a company does not commence its business within a year from its incorporation or suspends its business for a whole year, it may be wound up by the court .The contention of the shareholders of XYZ Ltd that the company is liable to be wound up on the ground of suspensions of business, is not tenable for the following reasons:
(i) (a) A company may be wound up by court if a company suspends its business for a whole year. Here the business was suspended only on 1. 1.2008. Hence on 1st April, 2008 the business has not been suspended for the whole year to attract Section 433(c)
(b) Where a company having much business discontinues one of them, it cannot be said to have suspended business within the meaning of Section 433(c).
(c) Where a company ceases to do any business but is a holding company of subsidiaries engaged in the pursuit of the business, which it was previously doing, it cannot be said that the company has suspended its business (Ref; Eastern Telegraph Company Ltd).
(ii) Even if XYZ Ltd suspended all its business the suspension was not for a period of more that 1 year as on 1.4.1997 and hence the provisions of Section 433(c) are not applicable. Again for the reasons stated in (i) (c) above XYZ Ltd cannot be said to have suspended its business as its subsidiary in carrying on the business.

LLC_Glossary

Administrative Dissolution

An involuntary dissolution of an LLC by an act of the Secretary of State or similar state authority, caused by the company's failure to comply with certain statutory requirements; especially the failure to file an annual report, to pay franchise taxes or maintain a valid Registered Agent.

Alter Ego

A doctrine of law which disregards the principle of limited liability enjoyed by a legal entity when it is proven that, in fact, no separate identity of the individual and company exists. The alter ego principle may also apply to relationships between entities and their subsidiaries.

Amended Certificate of Authority

A document issued by a state to a foreign LLC evidencing that the company has amended its original certificate of authority.

Amendment

An addition to, deletion from, or a change of existing provisions of the articles of organization of a domestic LLC.

Annual Report

A required annual filing in a state, usually listing members, managers and financial information.

Apostille

Official government authentication of a document, usually by the State Department, Justice Ministry or Foreign Ministry, which legalizes it for use in another country.

Application for Certificate of Authority

The form filed in many states to qualify an LLC to transact business as a foreign entity.

Articles of Organization

The title of the document filed in many states to register a limited liability company (LLC) with the state. Also known as articles of formation.

Assumed Name

A name other than the true name, under which a business organization conducts business. Also referred to as a fictitious name, a trade name or "doing business as" (d/b/a).

Certificate of Authority

Formal evidence of qualification issued by a state to a foreign LLC.

Certificate of Good Standing

A certificate issued by a state official as conclusive evidence that an LLC is in existence or authorized to transact business in the state. The certificate generally sets forth the company's name; that it is duly incorporated or authorized to transact business; that all fees, taxes and penalties owed the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed.

Commingle

Commingling, is the sharing and pooling of personal and company assets. For example, rather than maintaining separate business and personal bank accounts, you choose to use one account for personal and business purposes. This is considered commingling and an easy way to become personally liable for LLC acts.

Compliant

This term refers to a level of completion of a legal entity's responsibilities to maintain the formalities of LLC existence under the laws of the jurisdiction in which it is formed.

Consent Resolution

A consent resolution is any resolution signed by members or managers that authorizes a particular action. This act eliminates the need for face-to-face meetings of members and managers.

Contract Creditors

Contract creditors are people or businesses which you owe money or property to because of a written or verbal contractual agreement.

Corporate Seal

A corporate seal is a device made to either emboss or imprint certain company information onto documents. This information usually includes the company's name and date and state of formation. Corporate seals are often required when opening LLC bank accounts, distributing membership certificates or conducting other company business.

Dissolution

The statutory procedure that terminates the existence of a domestic LLC.

Double Taxation

When a company must pay taxes on its earnings and individual shareholders must also pay taxes on any dividends that are distributed. General, "C" corporations are doubly taxed in this manner, unlike Limited Liability Companies.

Duration

How long a business will be recognized as a legal entity. A company with a perpetual duration will last forever unless the state dissolves the company. A 30-year duration means that the company will automatically dissolve on its 30th anniversary of existence.

Employment Agreement

An employment agreement is a contract between your company and an employee. These agreements can be written or verbal; although all employment agreements should be in writing. Employers are more likely to have employment agreements with key employees. The terms and conditions of an employment agreement should be consistent with statutes, articles, operating agreements, and any existing shareholder agreements.

Fiduciary Relationship

A relationship in which one party (the fiduciary) must act in good faith and with due regard to the best interests of the other party or parties.

Foreign LLC

A term applied to an LLC doing business in a state other than its state of formation.

Franchise Tax

A tax or fee usually levied annually upon a limited liability company or similar business entity for the right to exist or do business in a particular state. Failure to pay the franchise tax or similar fees may result in the administration dissolution of the company and forfeiture of the charter.

Good Standing

An LLC is said to be in good standing when it has remained current with the necessary reports and fees required by the regulatory jurisdictions under which it operates.


Involuntary Dissolution

The termination of an LLC's legal existence pursuant to an administrative or judicial proceeding; dissolution forced upon an LLC rather than decided upon by the company.

Judicial Dissolution

Involuntary dissolution of an LLC by a court at the request of the state attorney general, an owner or a creditor.

Jurat

Specific notary language citing, under oath, that a signature has been witnessed.

Legalization of Certified Documents

Needed for companies (overseas) that are not part of the Hague Convention. Companies in a country that is not part of the Hague will not benefit from an Apostille. (1) To make legal or lawful; authorize or sanction by law.

Limited Liability Company (LLC)

An artificial entity created under and governed by the laws of the jurisdiction in which it was formed. Limited liability companies are generally able to provide the limited personal liability of corporations and the pass-through taxation of partnerships or S Corporations.

Limited Personal Liability

The protection generally afforded a member of a limited liability company from the debts of and claims against the company.

Managers

The individuals who are responsible for the maintenance, administration and management of the affairs of a limited liability company (LLC). In most states, the managers serve a particular term and report to and serve at the discretion of the members. Specific duties of the managers may be detailed in the articles of organization or the operating agreement of the LLC. In some states, the members of an LLC may also serve as the managers.

Members

The owner(s) of a limited liability company (LLC). Unless the articles of organization or operating agreement provide otherwise, management of an LLC is vested in the members in proportion to their ownership interest in the company.

Membership Certificates

Evidence of ownership of and membership in a limited liability company.

Merger

The statutory combination of two or more business entities in which one of the companies survives and the other companies cease to exist.

Minutes

The written record of transactions taken or authorized by the members or managers. These are usually kept in the minute book in diary fashion.

Name Registration

The filing of a document in a foreign state to protect the LLC name, often in anticipation of qualification in the state.

Name Reservation

A procedure that allows an LLC to obtain exclusive use of a business name for a specified period of time.

Notice of Service of Process

Official notification of an action or proceeding by the delivery of a legal or court document, with a request to answer in a specific period of time.

Operating Agreement

A contract among the members of a limited liability company governing the membership, management, operation and distribution of income of the company.


Partnership

A business organization in which two or more persons agree to do business together.

Pass-Through Taxation

Rather than tax the income of the entity, taxation is "passed through" to the individual shareholders in S Corporations (and LLCs). Income or losses are declared on their individual tax returns.

Perpetual Existence

Unlimited term of existence; characteristics of most business corporations.

Piercing the Corporate Veil

Piercing the corporate veil is a legal theory sometimes used to impose personal liability on members and managers for LLC acts. This theory permits a court to disregard the separate identity of the business.

Qualification

The filing of required documents by an LLC to secure a certificate of authority to conduct its business in a state other than the one in which it was formed.

Registered Agent

A person or entity designated to receive important tax and legal documents on behalf of the business. The Registered Agent must be located and available at a legal address within the specified jurisdiction at all times. Failure to maintain a Registered Agent in the jurisdiction in which an LLC is registered, may result in the forfeiture of good standing status. Also known as a Resident Agent.

Registered Office

The statutory address of an LLC. In states requiring the appointment of a Registered Agent, it is usually the address of the Registered Agent.

Reinstatement

Returning an LLC that has been administratively dissolved or had its certificate of authority revoked, to good standing on a state's records.

Resolution

A formal statement of any item of business that has been voted upon.

Restated Articles of Organization

A document that combines all currently operative provisions of an LLC's articles of organization and amendments thereto.

Sole Proprietorship

An unincorporated business with a sole owner in which the owner may be personally liable for business debts and claims against the business.

Tort

A tort is any act or failure to act (if there was a duty to act) which causes harm or damage. Examples of torts include assault, battery, fraud, misrepresentation, defamation, libel, slander, invasion of privacy, and negligence. If there is a claim against your LLC, other than a claim by the government, it will likely be based in contract or tort.

Trademark

A word or mark that distinctly indicates the ownership of a product or service, and that is legally reserved for the exclusive use of that owner.

Voluntary Dissolution

Action by members or managers to dissolve an LLC.

Winding Up

The discharging of an LLC's liabilities and the distributing of its remaining assets to its members in connection with its dissolution.

Withdrawal

The statutory procedure whereby a foreign LLC obtains the consent of a state to terminate its authority to transact business there.

Limited Liability Partnership_8

What are the restrictions in respect of minimum and maximum number of partners in an LLP?



A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum number of partners.

Limited Liability Partnership_7

Whether provisions of Indian Partnership Act, 1932 would be applicable to LLPs?


No, these shall not be applicable to LLPs.

Limited Liability Partnership_6

Whether an entity which has objectives like “charitable or other not for profit objectives” would be able to set up under LLP Act?



No. The essential requirement for setting LLP is ‘carrying on a lawful business with a view to profit’.

Limited Liability Partnership_5

Difference between LLP & a Company

• A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.
• The management-ownership divide inherent in a company is not there in a limited liability partnership.
• LLP will have more flexibility as compared to a company.
• LLP will have lesser compliance requirements as compared to a company.

Comapnies Act_Practical Problems_82

A Group of shareholders of a company while filing a petition for relief against mismanagement in the conduct of the affairs of the company feel that since the matter has become so serious that they feel that the ultimate relief for mismanagement will be by way of filing a petition for winding up and hence they prefer to file two petitions, one for relief against mismanagement and the other for winding up. State whether simultaneous petitions or composite petition is maintainable.



Supreme Court in Worldwide Agencies (P) Ltd. v. Mrs. Margaret T. held that "a composite petition under sections 397, 398 and 433(f) of the Act is maintainable." This judgement overrides the previous juedgements of several High courts.

Limited Liability Partnership_4

Difference between LLP & “traditional partnership firm”

• Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
• Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.

Limited liabilities Partnership_3

Other countries where this form is available ?

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

Limited Liability Partnership_2

What are the advantages of LLP form ?

LLP form is a form of business model which:
(i) is organized and operates on the basis of an agreement.
(ii) provides flexibility without imposing detailed legal and procedural requirements
(iii) enables professional/technical expertise and initiative to combine with financial risk taking
capacity in an innovative and efficient manner

Limited Liability Partnership_1

What is concept of “limited liability partnership” ?



• LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
• The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
• The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
• Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
• Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Companies Act_Practical Problems_81

Alpha Ltd. and Beta Ltd. entered into a scheme of amalgamation by which Alpha Ltd. would transfer its entire undertaking to Beta Ltd. However, the Central Government raised an objection that unless the objects clause of the companies are similar, and memorandum empowers to do so, the scheme of amalgamation cannot be permitted. Is the contention of the Central Government correct?

The power to amalgamate may flow from the memorandum or it may be acquired by resorting to the statute. Section 17 of the Companies Act, 1956 indicates that a company which desires to amalgamate with another company will take necessary steps to come before a court for alteration of its memorandum in aid of such amalgamation. The statute confers a right on a company to alter its memorandum in aid of amalgamation with another company. The provisions contained in sections 391 to 396 and 494, illustrate instances of statutory power of amalgamating a company with another company without any specific power in the memorandum. [Hari Krishna Lokia (v) Hoolungooree Tea Co,].

Section 391 is not only a complete code, but it is in the nature of a single window clearance system to ensure that parties are not put to avoidable, unnecessary and cumber some procedure for making repeated applications to court for various alterations and changes. What is to be seen is the over all fairness mid feasibility of scheme of amalgamation and there need not be any 'unison of objects of both transferor and the transferee company. [R Morarjee Gokuldas spg. & wrg. Co.,]. To amalgamate with another company is the power of the company and not an object of the company. Irrespective of the objects clause, the court is empowered to sanction scheme of amalgamation provided it does not prejudice the interest of the public. Therefore, based on the above judicial rulings, the contention of the central government is not correct.

Companies Act_Practical Problems_80

A scheme of merger of XYZ Ltd with ABC Ltd was approved by the shareholders at an extraordinary general meeting and the exchange ratio of 3 shares of ABC Ltd for 20 shares in XYZ Ltd was approved. The proposal was also okayed by a lending financial institution which held 45% shares in XYZ Ltd. The valuation was carried out by one of the directors of XYZ Ltd who is a member of the Institute of Chartered Accountants of India. The valuation was affirmed by three independent valuers nominated by the shareholders in general meeting. However, certain leaseholder properties, under license, which were not transferable, were not taken into account in the valuation. While the scheme was awaiting the Court's sanction, it was challenged by certain shareholders on the ground that the exclusion of leasehold assets in the valuation made the scheme 'Unfair'. Decide giving reasons:
(i) Whether the contention of the shareholders is tenable?
(ii) What factors would the Court take into account in approving the exchange ratio?

The contention of the shareholders in this case shall not be tenable. The court is not to disturb a scheme unless the person who challenges the valuation satisfies the court that the valuation arrived at was grossly unfair. Valuation in this case was approved by the shareholders and also okayed by the lending institution(s) which are usually well-informed and scrutinize the scheme with expert’s eye and which are also presumed to act bonafide. In the similar case of Tata Oil Mills Ltd. Re. (1994), the court held that the presumption of fairness was writ large on the face of the scheme. The Court did not attach importance to the fact that certain leasehold assets and properties held under license were excluded from valuation. Such assets, the court said, were neither transferable nor heritable. They are in the nature of a personal privilege. The Supreme Court affirmed this decision in Hindustan Lever Employee‘s Union v. Hindustan Lever Ltd., (1994) and accepted the exchange ratio proposed. The Supreme Court found no objection to the
valuation being done by one of the directors of TOMCO (XYZ Co. in this case). His report did not show any prejudice and was also affirmed by the independent valuers. Supreme Court also enumerated all the possible methods of valuation such as, market price, book value and yield basis and pointed out that a combination of all or some of the methods, may have to be adopted in circumstances of a particular case. Thus based on the above explanation and the decisions given by the Supreme Court, it can be concluded that the contention of the shareholders that the
exclusion of certain leasehold assets in the valuation has made the scheme unfair, shall not be tenable.

Companies Act_Practical Problems_79

The Board meeting of Fortune Ltd. has the following schedules for the year 2009:
1st Meeting - 1st January, 2009
2nd Meeting - 30th June, 2009
3rd Meeting - 1st July, 2009
4th Meeting - 31st December, 2009
State whether the Board Meetings schedules are as per compliance with the provisions of the Companies Act, 1956. What would be your views if the meeting to be held on 30th June, 2009 is adjourned due to lack of quorum?




As per Section 285, in the case of every company, a meeting of the Board of Directors shall be held at least once in every three months and at least four such meetings shall be held in every year. The section does not state the gap between two board meetings. In the present case four meetings have been scheduled for the year 2009 even though the gap between two board meetings is more than 3 months. However, as per the section there appear to be no contravention. If the Board meeting to be held on 30th June, is adjourned due to lack of quorum, again a meeting is held on some other date, the company shall not be deemed to have
contravened the provisions of Section 285. If the said meeting is proposed to be held on 30th June, 2009 and assumingly to be adjourned for want of quorum, the meeting automatically stand adjourned by virtue of Section 288 (1) till the same day in the next week, at the same time and place. And if the same day is a public holiday, then the meeting stands adjourned till the next succeeding day which is not a public holiday.

Companies Act_Practical Problems_78

In a public company the total number of directors are 12 and 2 office of the directors have fallen vacant. Referring to the relevant provisions of the Companies Act, 1956.
(a) What would be the quorum for the Board meeting?
(b) Can the articles of a company fix the quorum (higher or lower) for the Board meeting?
(c) Assuming if there are 15 directors in the company and of which 13 happen to be interested directors, what would be the quorum?
(d) How do you resolve the situation if all the directors are interested in a particular transaction?

Where total number of directors are 12 and 2 offices of the directors have fallen vacant, we find: 1/3 of (12-2) = 1/3 of 10 = 3 1/3 directors. If the fraction of 3rd were to be rounded off as one then 4, i.e. 3+1 directors would constitute the quorum for the Board meetings. If at any time the number of the remaining directors exceeds or is equal to two thirds of the total strength, the number of the remaining directors who are non-interested but present at the meeting, not being less than two shall constitute the quorum. For example, there are in all 15 directors and the Board meeting commences with all the 15 directors. During the currency of the meeting, an item comes up for discussion in respect of which 13 happen to be “interested” directors. In this case, in spite of the excess of the interested directors being more than two-thirds, the prescribed minimum number of noninterested directors constituting the quorum, namely, 2 present at the meeting are to transact the particular item of business.

Companies Act_Practical Problems_77

Out of the powers exercisable by the Board under Section 292, the board wants to
delegate to the Managing Director of the company the power to borrow monies otherwise than on debentures. Advise whether such a delegation is possible? Would your answer be different, if the delegation is given to the manager or any other principal officer including a branch officer of the company?

It has been held in [P. Rangaswami Reddiar and Another vs. R. Krishnaswami Reddiar and another (1971) 43 Comp. Case 232] that where borrowing is permissible under the company’s articles and moneys were borrowed on promissory notes, such transaction would come within the powers of the director. It has also been held in the same case that where a person was appointed as the managing director of the company by the Board’s resolution vested with full powers of the management of the affairs of the company and authorised to sign all the papers of the company, he would have full powers to borrow money on a promissory note even without a resolution of the Board as contemplated by Section 292(c) of the Act.

Companies Act_Practical Problems_76

The Board of Directors of Sun Star Ltd. are contributing every year to a charitable
organization a sum of Rs.1 lac. In a particular year, the company suffered losses and the directors are contemplating to contribute the said amount in spite of the losses. In this connection, state whether the directors can do so?

The power to donate to general charities is not conditional to existence of any profit. In such a case they may contribute up to the limit given in Section. 293(1) (e), even though the company may be working at a loss. Under the section a public company can contribute in any financial year not exceeding Rs 50,000 or 5% of its average net profits during the three preceding financial years whichever is greater.

Practical Problems_Contract Act_94

Vipin is a professional dancer. Mr. Pandey engages him to dance at a party he
is giving for his business associates. But a day prior to the party Mr. Vipin’s son passes away and he could not perform the dance recital. In case Mr. Pandey sues Mr. Vipin, does the latter have any protection under the law?

When performance of a promise becomes impossible on account of subsequent developments of events or change in circumstances, which are beyond the contemplation of parties, the contract becomes void. Such supervening impossibility can arise due to variety of circumstances as stated below :
(a) Accidental destruction of the subject matter of the contract.
(b) Non-existence or non occurrence of a particular state of things.
(c) Changes in law.
(d) Incapacity to perform a contract of personal services.
As can be seen above in point (d), in cases of contract of personal service, disability or incapacity to perform, caused by an act of God e.g. illness, constitutes lawful excuse for non-performance of the contract (Robinson vs. Davison). Hence, Mr. Vipin has a valid excuse.

Practical Problems_Contract Act_93

Vijay gifted the whole of his property to his daughter on the condition that she should pay Rs.200 per month to her uncle (father’s brother). Later, she refused to pay her uncle on the ground that she did not receive any consideration from her uncle. Is she justified?

That consideration can legitimately move from a third party is an accepted principle of law in India though not in England. In Chinaya vs. Ramaya (1881) A.Mad. 13.7., a mother, ‘A’ had made over certain property to her daughter with condition that the former’s brother should be paid annuity by the latter. The latter (i.e. the daughter) the same day executed the document agreeing to pay annuity accordingly but declined to pay after sometime. A’s brother sued A’s daughter. It was contended on behalf of A’s daughter, that there was no consideration from A’s brother and hence there was no valid contract. This plea was rejected on the ground that the consideration did flow from mother to daughter and such consideration from third party is sufficient to enforce the promise of daughter of ‘A’ to pay annuity to A’s brother. In the given case if Vijay’s daughter had made a promise to her uncle then she would be bound by the promise.

Be original

A 45 year old woman had a heart attack and was taken to the hospital. While on the operating table she had a near death experience.

Seeing God she asked 'Is my time up?'

God said, 'No, you have another 43 years, 2 months and 8 days to live.'

Upon recovery, the woman decided to stay in the hospital and have a face-lift, liposuction, and a tummy tuck.. She even had someone come in and change her hair colour and brighten her teeth!

Since she had so much more time to live, she figured she might as well make the most of it. After her last operation, she was released from the hospital. While crossing the street on her way home, she was killed by an ambulance.

Arriving in front of God, she demanded, 'I thought you said I had another 43 years? Why didn't you pull me from out of the path of the ambulance?'

(You'll love this!!!)

God replied: 'I didn't recognize you

SO BE ORIGINAL!!!

Companies Act_Practical Problems_75

On 14th March, 2007, Abhishek was appointed as additional director on the Board
of directors of Amrit Ltd. The annual general meeting of the company was scheduled to be held on 25th September, 2007, but due to devastating fire all records of the company were destroyed. In order to re-build the records, the company approached the Registrar of Companies for extension of time for holding the annual general meeting till 30th November, 2007. As a Company Secretary of Amrit Ltd., what would be your advice to the Chairman about Abhishek, who was appointed as additional director during the year ?

Companies Act_Practical Problems_74

The Board of directors of Swarn Ltd. had five directors. One of them died and the Board appointed Rajat in his place to fill-up the casual vacancy. However, Rajat resigned from the Board after two months of his appointment. The Board wishes to appoint Bhagat in place of Rajat to fill-up the casual vacancy. What would be your advice to the Board and why ?

Companies Act_Practical Problems_73

Vivek purchased 5,000 equity shares of Prosperous Ltd. and lodged the same for transfer with the company. The company returned these shares under objection that the share transfer stamps affixed on the transfer deed were not cancelled. Vivek thereafter cancelled the stamps and re-lodged the shares for transfer. At this time, the company effected the transfer and returned the duly transferred shares to Vivek. In the meantime, the market price of the shares went down substantially. Vivek filed a case against the company claiming that, due to unwarranted objection raised by the company, he was deprived of the profits which he could have earned by disposing of the shares at higher price. State with reasons whether the claim of Vivek is tenable.

Companies Act_Practical Problems_72

Mrs. Rakhi is a member of ABC Producer Company since its inception. She was so involved in the activities of the company that she acquired fullest knowledge of its activities, processes, marketing, etc. After gaining confidence of highest order, she got incorporated another XYZ Producer Company with the same objects and commenced its operations.

At the meeting of the members of ABC Producer Company, other members objected to the continuation of the membership of Mrs. Rakhi. You are required to explain whether the objection raised by other members is valid or not.

Companies Act_Practical Problems_71

Aman Ltd. has resolved at its annual general meeting to shift its registered office from Mumbai to some other place in the State of Maharashtra, which falls in the jurisdiction of other Registrar of Companies. In terms of section 17A, Aman Ltd.
filed e-Form 1AD with Regional Director along with enabling fee and the following
documents :
(i) certified copy of minutes of the annual general meeting; and
(ii) certified copy of newspaper advertisement.
After scrutiny of the filed form, the Regional Director rejected the request of Aman Ltd. In terms of provisions of section 17A, what remedy is available to Aman Ltd. ?

Companies Act_Practical Problems_70

Following information has been extracted from the balance sheet of Richy Rich Ltd. :
(i) Paid-up share capital Rs.20 crore
(ii) Reserves and surplus Rs.80 crore
(iii) Capital reserve Rs.5 crore
(iv) Investment in securities Rs.10 crore
(v) Loan to companies Rs.30 crore

DEF Ltd. has requested Richy Rich Ltd. for a loan of Rs.50 crore which the Board
of directors will consider at its ensuing meeting. Explain the legal position and
advise the Board.

Companies Act_Practical Problems_69

Ajay sold his shares and executed a transfer deed in favour of Vijay. The documents were lodged for transfer with the company. However, before effecting and registering the transfer by the company, Ajay, the transferor passed away. What is the impact of the death of Ajay on the registration of transfer of shares in favour of Vijay, if the death of Ajay is – (i) intimated to the company before the registration; and (ii) intimated to the company after registration of the transfer of the shares in favour of Vijay ?

If Vijay dies before registration of the transfer of shares, what will be the consequences (i) if the death of Vijay is intimated to the company before registration of transfer; and (ii) if the death of Vijay is not intimated to the company before the registration of transfer ?

Companies Act_Practical Problems_68

For a breech of a contract by a company a proprietary firm filed a suit against, inter alia, a non-executive director who negotiated and concluded a written contract on behalf of the company. Will the suit filed against the non-executive director stand to legal scrutiny?