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Legal aspects of business MB 0050

1. The classification of law, such as civil law and criminal law; substantive and

procedure law is illustrated. 2. This is the literal translation of maxim ignorantia juris non excusat. 3. Characteristics of law: Law is a body of rules Law is for the guidance or conduct of persons both human and artificial Law is imposed Law is enforced by the executive The state. Content of law. Two basic ideas involved in law Law is made to serve some purpose which may be social, economic or political. 4. Which one of the following possess the power of supreme legislation in India: The Parliament; 5. A state is a territorial division, with people therein subject to a uniform system of law administered by some authority of the state. 6. The main sources of modern Indian Law, as administered by Indian courts, may be divided into two broad categories: (i) Primary sources and, (ii) Secondary sources 7. The primary sources of Indian law are: (a) customs, (b) judicial precedents (stare decisis), (c) statutes and (d) personal law. 8. The secondary sources of Indian Law are English Law and Justice, Equity and Good Conscience. 9. The chief sources of English Law are: (i) the Common Law (ii) Equity, (iii) The law Merchant and (iv) The Statute Law. 10. The doctrine of judicial precedent is also known as the doctrine of: Stare decisis; 11. The important sources of law are custom, precedent, and legislation. Their appearance in the legal history has been in the following order: Custom, precedent and legislation; 12. Equity means a body of legal doctrines and rules emanating from the administrations of justice, developed to enlarge, supplement or override a narrow rigid system of existing law of the land. 13. Law and business are complement other. 14. Every aspect of business is controlled by law. 15. Statutes, common law, precedents, etc. are source of Indian business law. 16. Business law prescribes a set of rules for the governance of transactions and relations between business entities. 17. Custom is Unwritten law 18. The rights which pertain to the realm of status which indicates the proposition person in the eye of law in the society is known as. Personal rights 19. Out of the following, which one is not the source of English law? Business law 20. The Indian Legal System handles cases in two separate ways Civil law and criminal. 21. Private law include Law of contract 22. All the following laws include in public law EXCEPT Law of tort 23. IPR stands for Intellectual Property Rights 24. Equity: It refers to that branch of the English law which developed separately from the common law.
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Legal aspects of business MB 0050


25. Statute Law: The statute law refers to the law laid down in the Acts of

Parliament. 26. State: A state is a territorial division, with people therein subject to a uniform system of law administered by some authority of the state. 27. Some such laws are: Societies Registration Act, 1860; Co-operative Societies Act, 1912.

Unit: 2
1. Completion of communication of offer and acceptance (Sec.4) 2. Consideration (Secs.2(d), 23-25 and 185) 3. No consideration, no contract (Secs.10 and 25) 4. Agreements Declared Void (Secs.26-30) 5. Agreements against public policy (Secs.26-28) 6. Contingent Contract (Secs.31-36) 7. Contingent contract defined (Sec.31) 8. Performance of Contracts (Secs.37-67) 9. Different Modes of Discharge of Contracts (Secs.73-75) 10. Meaning of mutual consent (Sec.62) 11. A contract is an agreement, enforceable by law, made between at least two parties by

15.

24.

which rights are acquired by one and obligations are created on the part of another. 12. Sec.2 (e) defines an agreement as every promise and every set of promises forming consideration for each other. In this context, the word promise is defined by Sec.2(b) 13. Classification of contracts according to formation: A contract may be (a) Made in writing (b) By words spoken and (c) Inferred from the conduct of the parties or the circumstances of the case. Formal and informal contracts Classification according to validity: Contracts may be classified according to their validity as (i) Valid, (ii) Voidable, (iii) Void, (iv)Unenforceable 14. Modes of making an offer: Express offer Implied offer Offer by abstinence A promise for a promise is a good consideration. T 16. If the offered does not accept the offer according to the mode prescribed by the offer or, the offer does not lapse automatically. T 17. Commercial impossibility does not make the contract void. T 18. An attempt to deceive which does not deceive is not fraud. T 19. A contract terminates by breach of contract. T 20. The freedom of the parties is limited by four factors. T 21. Damages under Sec.75 are awarded according to certain rules as laid down in Sec.73-74. T 22. A contract is imposed by a party having a strong bargaining power on a party having a weak bargaining power. T 23. There are three remedies under the Specific Relief Act, 1963. T A stranger to consideration cannot maintain a suit. F 25. An agreement, the meaning of which is not certain or capable of being made certain, is valid. F 26. Communication of offer is complete when the letter of offer is posted. F

Legal aspects of business MB 0050


27. A proposal when accepted becomes a valid contract even though acceptance is not in the

34.

44. 45.

prescribed mode. F 28. The communication of acceptance is complete, as against the person to whom it's made, when it comes to his knowledge. F 29. A married woman cannot enter into a contract. F 30. When the promise does not accept the offer of performance, the promise is not responsible for non-performance. F 31. Consent obtained by fraud makes the agreement void. F . 32. Cancellation of a contract by mutual consent of the parties is called waiver. F 33. Past consideration is no consideration. F An agreement to agree is a valid contract. F 35. Social agreements are enforceable in courts. F 36. A person who is usually of unsound mind cannot enter into a contract even when he is of sound mind. F 37. Payments made by a debtor are always appropriated in chronological order. F 38. A threat to commit suicide does not amount to coercion. F 39. NOVATION means substitution of a new contract for the original one. 40. A consent is said to be free when it is not caused by: (i) coercion, (ii) undue influence, (iii) fraud, (iv) misrepresentation or (v) mistake. 41. Some of the agreements which are against public policy and have been declared to be void by law. These are as follows: (i) Trading with enemy: (ii) Agreements for stifling prosecution. (iii) Contracts in the nature of champers and maintenance. (iv) Agreement for the sale of public offices and titles are void. (v) Agreements in restraint of parental rights are void. (vi) Agreements in restraint of marriage of any person other than a minor is void. 42. According to Dr Jenks, quasi contract is a situation in which law imposes upon one person, on grounds of natural justice, an obligation similar to that which arises from a true contract, although no contract, express or implied, has in fact been entered into by them. 43. Cases which are treated as quasi contracts: Claim for necessaries supplied to a person incapable of contracting or on his account. Reimbursement to a person paying money due by another in payment of which he is interested A contract may be discharged by (i) performance, (ii) tender; (iii) mutual consent; (iv) subsequent impossibility; (v) operation of law; (vi) breach The breach of contract may arise in two ways: (i) anticipatory and (ii) actual. 46. Damages under Sec.75 are awarded according to certain rules as laid down in Secs.73-74. Sec.73 contains three important rules: (i) Compensation as general damages will be awarded only for those losses that directly and naturally result from the breach of the contract. (ii) Compensation for losses indirectly caused by breach may be paid as special damages if the party in breach had knowledge that such losses would also follow from such act of breach. (iii) The aggrieved party is required to take reasonable steps to keep his losses to the minimum
47. Valid Contract: Contracts which satisfy all the essential elements of a valid contract are

enforceable in a court of law.

Legal aspects of business MB 0050


48. Void Contract: A contract which ceases to be enforceable by law becomes void when

it ceases to be enforceable. UNIT: 3 1. The law relating to the contracts of guarantee is given in the Indian Contract Act, 1872 (Secs.126-147). 2. The person 3. who gives the guarantee is called surety; the person for whom the guarantee is given is called the principal debtor, and the person to whom the guarantee is given is called the creditor. 4. A contract of guarantee may be either oral or in writing 5. A guarantee is a specific guarantee, if it is intended to be applicable to a particular debt and thus comes to end on its repayment. 6. A guarantee which extends to a series of transactions is called a continuing guarantee (Sec.129) 7. A contract of guarantee is for the security of the Creditor. 8. Obligations imposed on a creditor in a contract of guarantee: Not to change any terms of the original contract. Not to release or discharge the principal debtor. Not to compound, or give time to, or agree not to sue the principal debtor. Not to do any act inconsistent with the rights of the surety (Sec.139) 9. Rights of a surety may be classified under three heads: (i) rights against the creditor, (ii) rights against the principal debtor and (iii) rights against cosureties. 10. Rights against the principal debtor: Right of subrogation Right to be indemnified 11. Discharge of surety: By notice of revocation (Sec.130) By the death of surety (Sec.131) By variance in terms of the contract (Sec.133) By release or discharge of principal debtor (Sec.134) By compounding with, or giving time to, or agreeing not to sue, principal debtor (Sec.135) By creditors act or omission impairing suretys eventual remedy (Sec.139) Loss of security. 12. Contract of indemnity comes under which section: Secs. 125 and 126 13. A contract of indemnity may arise either by an express promise of operation of law. 14. Indemnity: Indemnity means to make good the loss or to compensate the party who has suffered some loss. 15. As per the Indian law, a contract of guarantee must be in writing. F 16. The creditor does not a right of general lien on the securities of the surety in his possession. F 17. For a contract of guarantee, the primary liability is of the surety. F 18. In the event of principal debtor being a minor, creditor cannot recover his money from the surety. T 19. The liability of a surety is secondary. T 20. The surety is a favored debtor. T
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Legal aspects of business MB 0050


21. Between co-sureties there is equality of burden and benefit. T 22. Specific guarantee is different from continuing guarantee. T UNIT: 4 1. Definition of bailment (Sec.148) 2. Bailment is defined as the delivery of goods by one to another person for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of person delivering them 3. Bailments may be, classified into six kinds as follows. (i) Deposit. Delivery of goods by one person to another for the use of the former, i.e., bailor; (ii) Commodatum. Goods lent to a friend gratis to be used by him; (iii) Hire. Goods lent to the bailee for hire, i.e., in return for payment of money; (iv) Pawn or Pledge. Deposit of goods with another by way of security for money borrowed; (v) Delivery of goods for being transported, or something to be done about them, by the bailee for reward. (vi) Delivery of goods as in (v) above, but without reward. 4. Delivery of good is essential for effecting bailment. T 5. Placing of ornaments in a bank locker is not a contact of bailment. T 6. A gratuitous bailment can be terminated by the bailor even before the stated time. T 7. A finder may sell goods when they are in danger of perishing or losing the greater part of their value. T 8. The pledgee has a right to claim any damages suffered because of the defective title of the Pledgor. T 9. The pledgee is bound to return the goods on payment of the debt. T 10. Bailee need not return to the bailor any accretion to the goods on completion of the contract of bailment. F 11. A bailee has a general lien on the goods bailed. F 12. The ownership of the goods bailed passes to the bailee. F 13. All are the kind of bailments. EXCEPT: Loan 14. To disclose know faults in the goods (Sec.150) 15. To take care of the goods bailed (Sec.151) 16. To return any accretion to the goods bailed (Sec.163) 17. Another right of bailee is the right of lien (Secs.170-171) 18. Not to make unauthorized use of goods (Sec.154) 19. Not to mix bailors goods with his own (Secs.155-157) 20. To return the goods bailed without demand (Sec.160). 21. Right against wrongful deprivation of or injury to goods (Secs. 180-181) 22. A gratuitous bailment may be terminated at any time (Sec.159). 23. Right to retain the goods (Sec.168) 24. A person who delivers the goods as security is known as: Pledgor 25. Sec.172, defines a pledge as the bailment of goods as security for payment of a debt or performance of a promise. 26. Right to sell comes under which section. Sec.168 27. A mercantile agent as per Sec.2(9) of the Sale of Goods Act, 1930. 28. the pledge notice that the pawn or has no authority to pledge (Sec.178).
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Legal aspects of business MB 0050


29. Under Sec.30 of the Sale of Goods Act, a seller left in possession of goods

after sale, and a buyer. 30. Pledge by a person having limited interest (Sec.179) 31. According to Sec.176 in case the Pledgor fails to pay his debt or complete the performance of obligation at the stipulated time, the pledgee can exercise any of the following right: (i) bring a suit against the Pledgor upon the default in redemption of the debt or performance of promise and retain possession of goods pledged as a collateral security; (ii) (ii) Sell the goods pledged on giving the Pledgor a reasonable notice of sale. 32. A pledge by a mercantile agent to be valid if he must be in good faith and acting in the ordinary course of business. 33. 12. A mercantile agent comes under sec 2(9) of sales of good act 1930. 34. Pawnee's right of retainer [Sec.173]. 35. A pledgee has a right to recover any extraordinary expenditure incurred for the preservation of the goods pledged (Sec.175). 36. Bailment: A bailment is the delivery of goods by one person to another for some purpose upon a contract that they shall when the purpose is accomplished, be returned or otherwise disposed of according to the direction of the person delivering them. 37. pledge: The bailment of goods as security for payment of a debt or performance of a promise is called pledge. 38. Bailor: The person delivering the goods is called the bailor. 39. Bailee: The person to whom the goods are delivered is called the bailee. Unit: 5 1. Agent and Agency (Sec.182) 2. Express agency (Sec.187) 3. Implied agency (Sec.187) 4. Agency by estoppel (Sec.237) 5. Agency of necessity (Sec.189) 6. Agency by ratification (Secs.196-200) 7. Sub-agent and substituted agent (Secs.190-195) 8. Circumstances under which agency terminates or comes to an end (Sec.201) 9. Agent is a person employed to do any act for another or to represent another in dealings with third person.
10. no person who is not of the age of majority and of sound mind can become agent, as

to be responsible to his principal (Sec.184) 11. Any person who is of the age of majority according to the law to which he is subject and who is of sound mind, may employ agent (Sec.183). 12. A substituted agent is as good agent of the agent as a sub-agent. F 13. A principal can always revoke agent's authority. F 14. Agent being merely a connecting link is never personally liable. F 15. Agent cannot renounce his agency. F 16. Agent can never delegate his authority. F 17. A wife can always pledge her husband's credit. F 18. Death or insanity of the principal or the agent, not terminates the agency. F 19. An agent coupled with interest is irrevocable. T 20. An ostensible agency is as effective as an express agency. T
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Legal aspects of business MB 0050


21. Ratification tantamount to prior authority. T 22. Notice of revocation is essential to the agent as well as to the third parties. T 23. Agents may be classified from different points of view. One broad classification

of agents is: (i) mercantile or commercial agents and (ii) non-mercantile or noncommercial agents. Another classification of agents is: (1) general and (2) special. 24. To conduct the business of agency according to the principals directions (Sec.211) 25. The agent should conduct the business with the skill and diligence (Sec.212). 26. To render proper accounts (Sec.213) 27. To communicate with the principal in case of difficulty (Sec.214) 28. Not entitled to remuneration for misconduct (Sec.220) 29. To take all reasonable steps for the protection and preservation of the interests entrusted to him when the principal dies or becomes of unsound mind (Sec.209) 30. Right to remuneration (Secs.219-220). 31. Right of retainer (Sec.217) 32. Right of lien (Sec.221) 33. Right of indemnification (Secs.222-224). 34. bound to indemnify the agent against the consequences of all lawful acts 35. done by such agent in exercise of the authority conferred upon him (Sec.222) 36. liable to indemnify agent against the consequences of an act done in good faith, though it causes an injury to the rights of third persons (Sec.223) 37. bound to compensate his agent in respect of injury caused to such agent by the principle's neglect or want of skill (Sec.225). 38. Agent being a mere connecting link binds the principal for all his acts done within the scope of his authority (Sec.226) 39. What he does as is within his authority, is binding as between him and the principal (Sec.227). 40. Misrepresentations made or frauds committed by agents in matters beyond their authority do not affect their principals (Sec.238). 41. Sec.223 provides an option to the third parties to either sue the principal or agent or both. 42. The principal is not liable for criminal acts done by the agent at the instance of the principal. 43. The liability of an undisclosed principal is similar to that of a disclosed principal unless there is a trade custom making the agent liable 44. A broker is a mercantile agent engaged to buy and/or sell property. 45. Personal Liability of Agent: sec 230 46. Insanity or death of the principal or agent: sec 209 47. By renunciation of agency by the agent: sec 205 48. The termination of the authority of agent does not, so far as regard the agent, takes effect before it becomes known to him (Sec.208) 49. As regards third parties, they can continue to deal with the agent till they come to know of the termination of the authority (Sec.208) 50. A power of attorney is defined by Sec.2(21) of the Stamp Act .Powers of Attorney Act, 1882 51. Sec.32 (c) of the Registration Act, 1908, 52. Sec.4 of the Power of Attorney Act, 1882 53. The person executing the deed is known as the principle or donor. 54. 16. The power of attorney is required to be engrossed on non judicial stamp paper.

Legal aspects of business MB 0050


Unit: 6
1. 2. 3.

Registration of Firms (Secs.58-59) Liability of a firm for wrongful acts of a partner (Secs.26-27) Dissolution by court (Sec.44) 4. The law relating to partnership in India is contained in the Indian Partnership Act, 1932 5. An unregistered partnership is illegal. F 6. It is obligatory for a firm to be registered under the Indian Partnership Act. F 7. A minor can be a partner in a firm. F 8. There can be thirty partners in a firm. F 9. Sharing of profits is a conclusive evidence of partnership. F 10. An unregistered partnership firm is not illegal but its rights are not enforceable. T 11. A firm is liable for the wrongful acts of a partner. T 12. Partnership and firm are synonymous. T 13. A firm can enter into a partnership agreement with another firm. T 14. A partner is not entitled to claim remuneration. T 15. Dissolution of firm always implies dissolution of partnership. T 16. Registration of a partnership firm is effective from the date when the registrar files the statement & makes entries in the register of firm. 17. A firm cannot sue a person for the price of goods it supplied. 18. The Indian Partnership Act has effectively ensured the registration of firms without making it compulsory. T 19. The partnership deed is required to be stamped according to the provisions of the Stamp Act, 1899. 20. In France and Italy, the law requires all partnership agreements to be in writing. But in England, USA and India, written agreement is not compulsory. 21. A person can be admitted as a partner in a firm with the consent of the majority of partners. 22. Dissolution of firm by agreement comes under sec 40. 23. Proprietorship: A proprietorship is a company which is not registered with the state as a limited liability company or corporation. 24. dissolution: Dissolution (law), in law, means to end a legal entity or agreement such as a marriage, adoption, or corporation. UNIT: 7 Conditions and Warranties (Secs.11-17) Transfer of Title by Non-owners (Secs.27-30) Lien on goods (Secs.47-49) Suit for price (Sec.55) Suit for damages for non-acceptance (Sec.56) Suit for interest (Sec.61) Sale by Auction (Sec.64) Transactions in the nature of sale of goods form the subject matter of the Sale of Goods Act, 1930. 9. No sale can take place without a price. T
1. 2. 3. 4. 5. 6. 7. 8. 8

Legal aspects of business MB 0050


10. Consideration in a contract of sale of goods can also be paid partly in money

and partly in goods. T 11. The word lien means to retain possession of. T 12. Risk follows ownership. T 13. There are can be an agreement to sell goods. T 14. The delivery of ascertained goods is essential for the completion of sale. F 15. The right of lien by an unpaid seller can be exercised for the non-payment of price of goods and other charges. F 16. The amount of damages is not to be determined in accordance with the provisions laid down in Sec.73 of the Indian Contract Act, 1872. F 17. A Hire-purchase agreement is a bailment plus an agreement to sell. F 18. Contingent goods are a part of future goods. 19. Existing goods may be either specific or ascertained 20. Price is an integral part of a contract of sale. 21. The former stipulations are called conditions and the latter warranties. 22. Conditions and warranties are said to the express when the terms of the contract expressly, provide for them. 23. The Doctrine of caveat emptor is a fundamental principle of the law of sale of goods. 24. The Possession of goods refers to the custody of goods. 25. Secs.18 to 25 lay down the rules which determine when property passes from the seller to the buyer. 26. Sec 27 lays down a general rule as to transfer of title. 27. Sec 31- 44 provide for the duties of the seller and the buyer. 28. Delivery is defined as a voluntary transfer of possession from one person to another.
29. Warranty: A warranty is a stipulation collateral to the main purpose of the

contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. UNIT: 8 1. Ambiguous instrument (Sec.17) 2. Inchoate stamped instruments (Sec.20) 3. Forged endorsement (Sec.85) 4. Maturity (Secs.21-25) 5. Protesting (Sec.100) 6. Negotiable instruments are primarily contained in the Negotiable Instruments Act, 1881, which came into force on 1st March, 1882. 7. A negotiable instrument need not be in writing. F 8. A holder in due course is one who receives the instrument for value and without any notice as to the defect in the title of the transferor. 9. A Ambiguous instrument is one which may be construed either as a promissory note or as a bill of exchange. 10. An inchoate instrument means an instrument that is incomplete in certain respects. 11. Signature of the maker is not required in the case of a promissory note. F 12. Bills in set are used in foreign trade transactions. T 13. It is not necessary to put any date in the case of promissory notes payable on demand. T 14. A cheque must always be crossed to make it a valid instrument. F
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Legal aspects of business MB 0050


15. One can get a post-dated cheque encased across the bank counter at any time. F 16. The life of a cheque is three months from the date of issue. F 17. A Holder in due course is a person who for consideration became the possessor of

a promissory note, bill of exchange or cheque. 18. All types of bills are entitled for three days of grace. F 19. Post dated cheque is valid and negotiable. T 20. An Endorsement is the mode of negotiating a negotiable instrument. 21. Maturity date is not required to be determined in the case of cheque. F 22. A payee of a cheque is entitled to claim interest. T 23. A negotiable instrument is said be Dishonored by non-payment. 24. The Protests the formal notaries certificate attesting the Dishonor of the bill and based upon the noting. 25. A cheque having the cross mark such as X is not generally regarded as a CROSSED CHEQUE 26. PAYING BANKER is a banker upon whom a cheque is drawn. 27. A payment is a payment in due course if it is made to a person entitled to receive it. F 28. Negotiable Instrument: Means a promissory note, bill of exchange or cheque payable either to order or to bearer. 29. Promissory Note: A promissory note is an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument. 30. Bill of Exchange: A bill of exchange is an instrument in writing containing an unconditional to the order of a certain person or to the bearer of the instrument. Unit: 9 Who can file a complaint? [Sec.12] Procedure on admission of complaint [Sec.13] Power of the district forum [Sec.13(4)] Reliefs available to consumers (Sec.14) Limitation period (Sec.24A) Vacancies or defects in appointment not to invalidate order (Sec.29A) The Consumer Protection Act, 1986 was substantially amended in 1991, 1993 and 2002. 8. Goods under this Act shall have the same meaning as assigned to them under the Sale of Goods Act, 1930. 9. Consumer Protection Act, applies to All products and services 10. Any of the following made a complaint EXCEPT 11. (a) A consumer (b) The Central Government (c) In case of death of consumer, his legal heir or representative (d) None 12. Right to acquire the knowledge and skill to be an informed consumer is a: Right to consumer education. 13. Right to choose means right to be assured, wherever possible, access to a variety of goods and services at competitive prices. 14. The expression Manufacturer for the purpose of this Act, means any of the following, EXCEPT. A Hindu Undivided Family 15. The complaint can be filled in the District Forum if The value of goods or services and compensation, if any, claimed exceeds rupees twenty lakhs.
1. 2. 3. 4. 5. 6. 7.

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16. Which amendment of Consumer Protection Act, permitted representative complaints.

Consumer Protection Act, 1993 17. Transfer of cases comes under which section. Sec.22 B 18. Sec.28 A inserted in which amendment of Consumer Protection Act, Amendment Act, 2002 19. AGMARK stands for Agricultural Products and Grading and Marketing Act, Unit: 10 Regulation of Combinations (Secs.5 and 6) Procedure for enquiry on complaints under Sec.19 3. The Consumer Protection Act. In this unit you will study about the Competition Act, 2002. 4. CCI stands for Competition Commission of India 5. Director General appointed under. Sec.16(1) 6. Value of sales of goods or service includes in Turnover 7. Any agreement between enterprises or persons referred Bid-rigging 8. Design registered under the Design Act, 2000 9. The expression Dominant position means a position of strength, enjoyed byan enterprise, in the relevant market.
10. A market comprising the area in which the conditions of competition for supply of

1. 2.

good known as: Relevant Geographic Market 11. Sec.5 deals with combination of Enterprises and persons 12. Commission shall maintain proper accounts and other relevant records and prepare an annual statement of accounts under section. 52 13. CCI established under Sec.7 14. All of the following are the power and functions of commission EXCEPT? 15. (a) Power to award compensation (b) Power to reject the orders 16. Prohibition of entering into anti-competitive agreement comes under (d) Sec.3 17. Section 40 provides that any person aggrieved by any decision or order of the Commission may file an appeal to the Supreme Court within sixty days from the date of communication of the decision. 18. Any person may make an application to the Commission for an order for the recovery of compensation from any enterprise for any loss or damage. T 19. Section 52 provides that the Commission shall maintain proper accounts and other relevant records. 20. 16. The accounts of the Commission shall be audited by the Comptroller and Auditor-General of India. T Unit: 11 1. Banks powers to issue directions to authorized persons (Sec.11) 2. Dealings in foreign exchange etc. (Sec. 3) 3. Contravention and Penalties [Secs.13 to 15] 4. Adjudication and Appeal [Secs.16-35] 5. the Foreign Exchange Management Act (FEMA), 1999 (FEMA) replaces the Foreign Exchange Regulation Act (FERA) 1973. 6. Overseas Corporate Body (OCB)
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Legal aspects of business MB 0050


7. Person of Indian Origin (PIO). 8. FERA stands for Foreign Exchange Regulation Act 9. In which year FEMA replaces the FERA 1999 10. Means of Indian currency which is expressed or drawn Indian rupees 11. Foreign currency means any currency same as Indian currency. F/T 12. An authorized person is allowed to credit the account of any person without any corresponding remittance from any place outside India. F 13. Sec.7 deals with export of goods and services. (True/False) 14. Section 5explains dealings in current account transactions. 15. If the contravention continues, the penalty of Rs. ____________ after the first day during the period in which the contravention continue shall be imposed. Rs. 500 per day 16. Sec.15 empowers the Directorate of enforcement 17. IPC stands for Indian Penal Code 18. Which section provides that any person aggrieved by any decision or order to the Appellate Tribunal may file an appeal to the High Court. Sec.35

19. Directorate of Enforcement make provisions under Secs.36 and 38 20. The arrest warrant may be issued by the adjudicating authority if the defaulter

fails to make an appearance in pursuance of the notice issued by him. T Unit: 12 1. Registration (Secs.12 and 33) 2. Cumulative Convertible Preference Shares (CCPs) 3. Statutory meeting (Sec.165) 4. Annual General Meeting (AGM) (Secs.166-168) 5. Extra-ordinary Meeting (EGM) Sec.169 6. The Companies Act, 1956 defines the word company as a company formed and registered under the Act or an existing company formed and registered under any of the previous company laws (Sec.3). 7. The whole process of formation of a company may be roughly divided, for Convenience, into three parts. These are: (i) Promotion; (ii) Registration and (iii) Floatation. 8. The persons who assume the task of promotion is known Promoters 9. How may partners involved in the case of private company? 2 10. _________ tells us the objects of the companys formation and the utmost possible scope of its operations beyond which its actions cannot go. Memorandum of association 11. Section 16 provides that the company cannot alter the conditions contained in memorandum except in the cases and in the mode and to the extent express provision has been made in the Act. 12. Change of name must be communicated to the Registrar Companies within ________________ of the change. 30 days 13. Article of association of a company have a contractual force between Company and its members

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Legal aspects of business MB 0050


14. section 56 lays down that the matters and reports stated in Schedule II to the Act must

be included in a prospectus. Stock Exchange Board of India 15. The most common classes of shares are: (1) Preference; (2) Equity or Ordinary; and (3) Deferred or Founders. A public company and a private company which is a subsidiary of a public company may not issue shares other than equity, preference and Cumulative Convertible Preference Shares (CCPS). 16. Sec.83 requires that each share in a company having a share capital must be distinguished by its appropriate number. T 17. The holders of equity shares have voting rights. (True / False) 18. _____________ defines a director. 19. The directors act as agents of the company. (True / False) 20. How many days before of statutory meeting a notice to be sent to every member of the company. (a) 11 days (b) 31 days (c) 41 days (d) 21 days 21. _____________ empowers the Board of Directors to manage the affairs of the company. 22. Prospectus: Any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting from the public. UNIT: 13 1. Electronic Governance [Secs.4 to 16] 2. Legal recognition of electronic records (Sec.4) 3. Legal recognition of digital signatures (Sec.5) 4. Use of electronic record and digital signatures in government and its agencies (Sec.6) 5. Secure Electronic Records and Secure Digital Signatures [Secs.14 to 16] 6. Secure electronic record (Sec.14) 7. Secure digital signature (Sec.15) 8. Security procedure (Sec.16) 9. Digital Signature Certificates [Secs.35 to 39] 10. Certifying authority to issue digital signature certificate (Sec.35) 11. Representations upon issuance of digital signature certificate (Sec.36) 12. Revocation of digital signature certificate (Sec.38) 13. Cyber Regulations Appellate Tribunal a. Establishment of cyber appellate tribunal (Sec.48) b. Composition of cyber appellate tribunal (Sec.49) c. Qualifications for appointment as presiding officer of the tribunal (Sec.50) d. Term office (Sec.51) e. Salary, allowances and other terms and conditions of service of presiding officer (Sec.52) f. Resignation and removal (Sec.54) g. Orders constituting appellate tribunal to be final and not to invalidate its proceedings (Sec.55) 14.RTI Act, 2005 was implemented in our country on 15th June, 2005 and became operational on 12.10.2005. 15. What rights are available under RTI Act, 2005 Right to Information Act, 2005 empowers every citizen to: Ask any questions from the Government or seek any information. Take copies of any Govt. documents. Inspect any Govt. documents. Inspect any Govt. works. Take samples of materials of any Govt. work.
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Legal aspects of business MB 0050


14. Right to information is a part of fundamental rights under Article 19 (1) of the

Constitution.
15. RTI enhances transparency & credibility of public authority. 16. Effective information flow helps citizen to secure their right and entitlement. 17. The Indian IT Act also needs to evolve with the rapidly changing technology

environment that breeds new forms of crimes and criminals. T


18. Information Technology Act apply more than 43 countries in the world. T 19. IT Act facilitates electronic storage of data in place of PAPER BASED

methods of storage of data.


20. IT Act provides legal recognition for transactions carried out by means of electronic

data interchange, and other means of electronic communication. 21. RTI extends to whole of India. 22. A trust is defined in the Indian Trust Act, 1882 23. Authentication is not a process used to confirm the identity of a person. F 24. Legal recognition of electronic records come under Electronics governance 25. Secure digital signature come under section 15 26. Any person may make an application to the Certifying Authority for the issue of a Digital Signature Certificate. T 27. A Certifying Authority may not revoke a certificate. F 28. Every appeal shall be filed within a period of 45 days from the date on which a copy of the order made by the controller or the adjudicating officer is received by the person aggrieved. T 29. Right to legal representation comes under SECTION 59 30. Hacking with computer system comes under SECTION 66 31. No person shall publish a Digital Signature Certificate. T 32. T Act has been passed to promote efficient delivery of the Government services by means of reliable electronic records. T 33. IT Act excludes the provisions related to the negotiable instruments like promissory notes, bills of exchanges, cheque, etc. T 34. IT Act, 2000 was passed which is based on the UNCITRAL Model law on electronic Commerce. 35. Encryption: Encryption is a process of coding information which could either be a file or mail message in into cipher text a form unreadable without a decoding key in order to prevent anyone except the intended recipient from reading that data 36. Decryption: Decryption is the reverse process of converting encoded data to its original un-encoded form, plaintext. 37. Digital Signatures: a message signed with a sender's private key can be verified by anyone who has access to the sender's public key, thereby proving that the sender signed it and that the message has not been tampered with. This is used to ensure authenticity.
1. 2. 3. 4. 5.

UNIT: 14 Persons entitled to apply for patents (Sec.6) Form of application (Sec.7) Information and undertaking regarding foreign applications (Sec.8) Provisional and complete specification (Sec.9) Contents of specification (Sec.10)
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Legal aspects of business MB 0050


6. 7. 8. 9. 10. 11. 12.

The Patents Act, 1970 extends to the whole of India. Application for a patent made by a foreign national is known as convention application invention is a new product or process involving an inventive step and capable of industrial application. An invention which claims something obvious or contrary to the well established natural laws cannot be patented. formulation of an abstract theory cannot be called as invention. Every application for a patent shall be for one invention only. T Contents of specification come under SECTION 10 The controller is empowered to order either to maintain or to amend or to revoke the patent on the recommendation of the opposition board. T Secs.33 to 42 makes certain provisions for secrecy of certain inventions. F Deal with the grant of patents and the rights conferred on the patentee. Secs.43 to 53 An application may be for a patent in respect of any improvement in or modification of a patented invention. T Rights of Patentees of lapsed patents which have been restored under SECTION 62 An application for a compulsory license can be made by any person not withstanding that he is already the holder of a license under the patent. T Foreign exporter must be duly authorized under the law of export. T ___________ deals with the subject of suits concerning infringement of patents. Secs.104 to 115 Assignee: It includes an assignee of the assignee and the legal representative of a deceased assignee and references to the assignee of any person include references to the assignee of the legal representative or assignee of that person. Patentee: It means the person for the time being entered on the register as the grantee or proprietor of the patent. Unit: 15 1. Works in which copyright subsists (Sec.13) 2. Meaning of copyright (Sec.14) 3. Ownership of copyright (Sec.17) 4. Compulsory license in unpublished Indian works (Sec.31A) 5. License to produce and publish translation (Sec.3) 6. Registration of a copyright society (Sec.33) 7. Rights of Broadcasting Organization and of Performers Broadcasting reproduction rights (Sec.37) 8. Performers right (Sec.38) 9. Ownership of copyright comes under section 7 10. Copyright means the exclusive right, by virtue of, and subject to the provision of the Act. T 11. Every application shall state the proposed retail price of copy of the translation of the work . T 12. Payment of remuneration by copyrights society comes under section 34 A 13. The Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works. T 14. Every broadcasting organization shall have a special right known as_____________ in respect of its broadcasts. Broadcasting reproduction right
15

13. 14. 15. 16. 17. 18. 19. 20. 21.

22.

Legal aspects of business MB 0050


15. Section 40 authorizes the Central Government to extend copyright protection to

foreign works. 16. section 41 provides that works made or published by certain International Organisations are granted copyright protection in India. 17. Reproduction of a literary, dramatic, musical or artistic work in the form of a cinematograph film shall be deemed to be Infringing copyright 18. An application can be made for a license to translate foreign literary or dramatic work after 5 yrs from its publication. F 19. The reproduction of the artistic work in form of a movie is the infringement of the copyright. T 20. Copyright: The term copyright means the exclusive right, by virtue of, and subject to the provision of the Act: 21. Infringement of copyright: when any person without a license from the owner or the Registrar of copyrights does anything, the exclusive right to do which is by this Act conferred upon the owner of copyright.

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