Wednesday, 18 September 2019

Companies and partnership act

COMPANIES & PARTNERSHIP ACT

1. A modification of charge under Section 125 of Companies Act, 1956, is registered by using which

Form Nos. Form Nos 8 & 13. The revised system for registration of charge with ROC is through

Electronic mode – MCA 21 (E-filing)

2.While granting advances to a company with charge created on securities which require registration

under Section 125, what is to be seen as a banker? As a banker, we should ensure that there is no

prior charge on the same securities by inspecting register of mortgages and charges at the office of

registrar of companies

3.Under Section 125 of Companies Act, a charge created by a joint stock company is required to be

registered with whom? With Registrar of Companies (ROC) under whose jurisdiction company’s

registered Office is located.

4. Which of the following charges is required to be registered with ROC under Section 125 of

Companies Act?

Charge on Plant & Machinery, hypothecation of stocks, furnitures and fixtures, stores, spares, EQM,

Registered Mortgage etc

5. M/S ABC Corporation Ltd borrowed from IOB on the security of plant and machinery by executing

loan papers on 22.10.08. The company borrowed from Canara Bank against the hypothecation of

same machinery by executing loan papers on 29/10/08. Canara Bank got their charge registered on

5.11.08 and IOB got their charge registered on 10.11.08. Who will get precedence in this case?

Charge of IOB will have precedence. Both the banks have registered their charge with ROC within the

stipulated time of 30 days, the date of execution of loan papers by IOB is earlier and hence IOB will

have the precedence.

6. The Board of Directors of a company can exercise powers to borrow money in excess of limit

specified in Section 293 (i) (d) provided - Such a resolution is passed in general body meeting of

share holders.

7. An advance to a limited Company does not require registration of charges with Registrar of

Companies if the advance is in the nature of Pledge (Effective possession is within the bank)

8. Execution of security documents by a Limited Co. should be - By affixing common seal only if

required by Articles of Association.

9. The effect of Non Registration of charge within the time limit is that Advance becomes an

unsecured advance.

10. Registration of the charge under Companies Act in the following case is not required- In case of

physical possession is delivered (IF NO COLLATERAL SECURITY OF STOCK, IMMOVABLE PROPERTY IS

TAKEN) In case of Hypothecation, Mortgage and book debts, registration is required.

11. The ceiling imposed by Companies Act, 1956 for a public Limited Company to borrow from banks

under Section 293 (1) (d) is Paid up capital + free reserves

12.The resolution of a company to borrow from a bank must be passed by whom? Resolution in a

Board Meeting

13. In case of private limited company loan document should be executed by - The delegated

authorities as per board of Directors.

14. A public limited company is sanctioned guarantee limits (performance guarantee) against

mortgage of land and building belonging to the company. As per lawyer‘s opinion instead of equitable

mortgage registered (simple) mortgage was put through; whether registration of charge is required?

Required. Charge is to be registered with the Registrar of Companies in case of EQM/Regd Mortgage

of company’s properties.

15. In the case of a company advance, what is the position of a secured creditor? Can stand outside

the winding up and satisfy his debt out of the property charged without proving his claim before

the liquidator

16. The winding up order of a company is effective from - Date of petition of winding up

17. Whether a secured creditor of a company can file a winding up petition despite the creditor

having security? YES.A Secured creditor of a Company can file a winding up petition despite the

Creditor having security.

18. In the case of a partnership firm, mandate may be revoked - By any Partner.

19. Partnership is to be registered with before advance is granted to customer - Registrar of Firms

20. If the partnership firm is not registered, what is the implication? The firm cannot sue others

legally

21. In case of a conflict in the operations condition of a firm‘s account, the provisions contained in

the following document will prevail- Partnership Letter to the bank

22. In the case of a mortgage transaction of a property standing in the name of the firm, the

mortgage papers have to be executed by All the partners of the firm (or by the partner who

has been specifically Authorized to execute mortgage papers by all the remaining

partners).

23. X and Y are authorised to sign cheque on behalf of the firm. A cheque dated 10 1 04 duly signed

by them is presented in clearing on 17 1 04. X expired on 14 1 04. Bank loses protection if paid

24. One of the partners of a firm has become insolvent. What should be done if a cheque drawn by

other partner is presented for payment? The cheque should be returned with the remark, “Refer to

drawer”

25. A HUF directly or indirectly cannot become partner of a firm because The firm is an association of

individuals. HUF is a floating body whose composition changes by births, deaths, marriages and

divorces. A HUF is not being “a legal person” cannot enter into an agreement of partnership. Hence

HUF cannot become partner of the firm.

26. Whether Branches are required to open current/TD accounts of partnership firms where one or

more of the partners are HUF - Cannot open CA/TD account.

27 What precautions branch is required to take in respect of partnership accounts already opened

where one or more of the partners are HUF. The branch should exercise caution in the transactions &

take Undertaking letter duly signed by all the co-parceners and Kartha.

28 Whether finance can be provided to Partnership firms where one or more of the partners are HUF

– No

29. Simple mortgage is to be registered with which office With Sub - Registrar of assurances under

whose jurisdiction the mortgaged property is situated

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