Class: Certificate in Accounting and Finance Total marks :100 Marks

CAF-03: Business Law Time allowed:3hours

Name: ___________________________________
RiseID:_________________________

Q.1 (a) Define Civil law. Give two examples of civil law. (02)
(b) How control is exercised over delegated legislation. (02)
(c) If President returns a bill passed by both the houses for reconsideration, how such bill can
become Act/Law? Discuss briefly. (02)

Q.2 (a) Differentiate between “general crossing” and “special crossing”. Comment on the effect of “Not
negotiable crossing”. (06)
(b) Any material alteration to a negotiable instrument renders the instrument void. What are the
exceptions to this rule? (03)
(c) What is meant by “blank endorsement”. What is the effect of such an endorsement. (02)

Q.3 (a) Atif, Raja and Nazir are partners in Buland Associates. Atif without informing Raja and Nazir
sold one of Buland Associates prime property to his friend Tariq and embezzled the money
received in consideration. In the light of the provisions of Partnership Act, 1932 advise the rights
available to Raja and Nazir under the circumstances. (04)

(b) Sharing net profits usually creates a very strong inference that the parties have formed a
partnership. But in certain situations, the fact that the profits are shared or the parties have agreed
to share the profits will not by itself create a presumption that a partnership was intended. List
such situations as given in the Partnership Act, 1932. (02)

(c) Under the provisions of the Contract Act, 1872 describe the following:
(i) Undue influence (02)
(ii) Fraud (02)

Q.4 (a) Explain the nature of a bailee’s particular lien. How does it differ from the general lien of a
banker? (03)
(b) Under what circumstances a contract of bailment may be terminated? (04)

(c) A, finds a horse which carries a reward of Rs 200 to the finder offered by B, the owner.A
telegraphically informs B about the horse and spends Rs 15 thereon. B comes to take the horse
after two days and during the intervening period A spent Rs 80 on feeding the horse. A returns the
horse to B without insisting prepayment of his lawful charges of Rs 95 and the amount of reward.
Subsequently B refuses to pay. A files a suit against B for the recovery of Rs 295. Will he succeed?
(03)

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Q.5 (a) Explain the term “Quasi contract”. Briefly describe three types of relationships commonly
referred to as quasi contracts under the Contract Act, 1872. (04)
(b) Describe the circumstances under which an agreement made without consideration is
considered valid and binding under the Contract Act, 1872. (06)

(c) Talat supplied computers to Bilal on credit. He agreed not to sue Bilal for a year at the request of
Rafiq who agreed to indemnify Talat. Bilal failed to make payment. Talat initiated legal proceedings
for the recovery of the amount against Rafiq and Bilal. Rafiq pleaded that Talat was not entitled to
sue before the year expires. In the light of the provisions of Contract Act, 1872, state whether Rafiq
is justified in his contention. Also state if there are any exceptions to the general rule. (03)

Q.6 (a) Under the provisions of the Companies Ordinance, 1984 explain the statutory duties of an
auditor with regard to the audit report. (05)
(b) Narrate the circumstances in which SECP becomes empowered to appoint auditors under the
Companies Ordinance, 1984. (05)

Q.7 (a) Alpha Technologies Limited (ATL) is in the process of being incorporated as a public limited
company.
Required:
Advising promoters about the period within which ATL is required to hold:
(i) Statutory Meeting.
(ii) First Annual General Meeting. (04)

(b) In a general meeting, ordinary as well as special businesses are put up for consideration of
members. Distinguish between ordinary business as opposed to special business. (03)

(c) Alpha Technologies Limited (ATL) is in the process of being incorporated as a public limited
company.
Required:
Write a letter to the promoters of ATL, on behalf of Best Financial Services who are their
consultants, advising them about appointment authority and the terms of holding of office of the
following:
(i) the first chief executive.
(ii) and subsequent chief executive. (04)

Q.8 (a) The Directors of Sigma Limited wish to recommend a final dividend. Under the provisions of the
Companies Ordinance, 1984 advise the directors about the restrictions, if any, with regard to the
declaration of dividend. (03)
(b) What are the consequences if a company fails to pay the dividend on time. (03)
(c) Can the accounts of a company exceed twelve months period? Explain with legal stipulation.
(02)
(d) The Chief Executive of a Public Limited Company is out of country for some official assignment.
The annual accounts of the company have to be approved and signed. What must be done to comply
with the legal requirements? (02)

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Q.9 (a) Explain the provisions specified in the Companies Ordinance, 1984 relating to requirements to
be completed before the commencement of business by a public company. (04)

(b) RA Limited is a public limited company. It has two classes of shares namely ‘A’ and ‘B’. The
directors of the company have decided to restrict the voting rights of Class ‘A’ shareholders. In lieu
thereof, they shall be allowed to get preference in payment of dividend.
State the procedures through which the decision of directors can be put into effect. (03)

(c) An allottee of shares of a limited company has sought action against the directors in respect of
false statements in the prospectus. The directors contend that the errors were not deliberate and
were made inadvertently.
(i) Discuss the liability of the directors for the false statement in the prospectus in the above
situation. (03)
(ii) State where there are any circumstances in which directors may claim relief from the above
liability. (02)

Q.10 (a) A change in the name of company requires a special resolution and approval of Registrar in
writing. Explain exception to it. (02)
(b) State briefly the restrictive conditions under which a private company is incorporated. (02)
(c) Write short note on Company Limited by Guarantee. (03)

(THE END)

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