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Answer Writing Practice DAY1 – CS Executive Session 1

Daily Answer Writing Practice For Group 1 

CS Executive


Hello guys today’s questions

Answers should be uploaded b/w 7pm to 8pm


Q1. Mr. Sunil Goyal, a director of XYZ Limited wants to go on foreign trip. He wants to assign his office to the Vice President of the company. Mr. Sunil Goyal seeks your advise whether he can do so. Referrning to the provisions of the Companies Act, 2013 advise him in the matter.

Q2. Alok, the Managng Director of Yellow Ltd, borrowed a large sum of money and misappropriated the same. Later, when the lender demanded his money, the company refused to repay, contending that the money borrowed by Managing Director was misappropriated by him and the company is not liable for repayment. Decide, giving reasons, whether the lender would succeed in recovering the money from the company.

Q3 Whether equity share already issued can be converted into redeemable preference shares ? Discuss.

Have a nice day……



Answer no.1

The given case pertains to the provisions relating to assignment of office of a director.

The provisions of the act states that a director can’t assign his office to any other person and any assignment so made shall be void (SEC. 166)

By applying the above provision to the given case while Mr. Goel wants to go on foreign trip and he wants to assign his office to the Vice President of the company, which is not allow and hence it shall be void.

Answer no.2

The given case pertains to the provisions of doctrine of indoor mgt.

(Brief of indoor mgt……….


In view of above provision the lender gives loan to the co. and not to its MD. So, if the MD has misused those funds it’s the company which can recover money from the MD & not the lender.

By applying the above provision to the given case the lender will have a right to recover money from the co. Since the loan amt was paid to the co , not to the director.

However the company reserves the right to recover the same from MD.

Answer no.3

Redeemable preference shares are those shares which gets redeem after a specified time.

(20yr/ 30yr for infra) 

Equity share constitute permanent capital of the company and such shareholders also enjoy exclusive voting right in the company.

If equity share capital is converted into redeemable preference shares, the permanent share capital of the company will be converted into temporary capital & therefore equity share capital cannot be converted into redeemable preference shares.

Note:- you can write answers like above if you don’t remember provision of relevent sections.

Best Answer Write by our Student.


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