SHORT ANSWERS:

1)CHARACTERISTICS OF NEGOTIABLE INSTRUMENT

 Essential characteristics of a negotiable instrument are as follows:

 Negotiability- means the instruments are transferable from one person to another
without any formality. It requires no further evidence of transfer.

 Transferee can sue in his own name without giving notice to the debtor- means
the right of the creditors to recover his dues from his debtors either by himself or
transfer this right to another person. In case the right is transferred, the transferee
of the instrument is entitled to sue on the instrument in his own name in case of
dishonour.

 Better title to a bona fide transferee for value: A bona fined transferee of a
negotiable instrument gets the instrument free from all defects.

 He is not affected by any defect of title of the transferor or any prior party.

 There is general rule” nobody can transfer a better title than that of his own”
does not apply to negotiable instrument. Thus a stolen instrument is valid at the
hands of a buyer in good faith and the transferee obtains a good title. However
such instruments will restrict transferability.

 Presumptions: Section 118 and 119 of the Act presume certain aspects namely.

 Every negotiable instrument was made, drawn, accepted, endorsed or transferred

for consideration.

 A negotiable instrument bearing a date was made or drawn on the date

mentioned,

 Every bill of exchange was made and accepted at a reasonable time and before
its maturity.

 The endorsements appearing on a negotiable instrument have been made in the

order in which they appear thereon.

 That the holder of a negotiable instrument is a holder in due course.

2) WHAT IS PRIVATE COMPANY?HOW TO CONVERT PRIVATE TO
PUBLIC COMPANY?

Private company: A private limited company is a company which is having a minimum

paid-up capital of Rs 1 lakh or such higher paid up capital as prescribed by its Article
and which- restricts the rights to transfer its shares, if any,
Limits the members to 200 prior to the amendment it was 50.(Minimum 2)Prohibits
any invitation to the public, to subscribe for any shares or debentures of the company.

Conversion of a private company into a public company:

The procedure for converting a private company into a public company is provided in
section14 of the Companies Act, 2013. They are:

1. The company must pass a special resolution for altering its Articles in such a
manner that they no longer include the provisions, which are required to be included in
the Articles.
2. In case the number of members is below seven, steps should bt taken to increase
it to seven. The number of directors is also to be increased to three, it is only two. This
should be done within six months of such conversion.
3. The word” Private” is to be deleted from the name of the company.
4. Within 30 days of passing of resolution altering the Articles the company has to
file to the Registrar-a printed copy of the special resolution, and a prospectus or a
statement in lieu of prospectors.

3) WHY INFORMATION TECHNOLOGY ACT IS IMPORTANT?WHAT IS

INFORMATION TECHNOLOGY?

The Information Technology Act, 2000

Introduction

 Now-a-days the information technology has played an important role in the

business transactions all over the world.
 The people were used digital technology and new communication systems for
communicating business transactions in the business.
  Now businessmen as well as individuals are increasingly using computers to
create, transmit and store information in the electronic form instead of traditional
paper documents, as it is cheaper, easier and speedier.
 Information stored in electronic form has many advantages.
 Although people are aware of these advantages of electronic medium, they are
reluctant to conduct business or conclude any transaction in the electronic form
due to lack of appropriate legal framework.
 It is, therefore, proposed to provide for legal recognition of electronic records
and digital signatures.
 To prevent the possible misuse arising out of transactions and other dealings
concluded over the electronic medium, it is also proposed to create civil and
criminal liabilities for contravention of the provisions of the proposed
legislation.
 The Information Technology Bill was passed by both Houses of Parliament and
it received the assent of the President on 9th June, 2000 and became The
Information Technology Act, 2000 (21 of 2000).
 The Act came into force on 17th October, 2000 vide G.S.R 788 (E) dated 17th
October, 2000.
 The Information Technology Act, 2000 is based on the Model Law on Electronic
Commerce which was adopted by the United Nations Commission on
International Trade and Law (UNCITRAL) in 1996.
 The Model Laws provide for equal legal treatment of users of electronic
communication and paper based communication.

4) WHAT ARE THE DIFFERENT WAYS OF DISCHARGING A CONTRACT?

Discharge of Contract.

Discharge of a contract implies termination of the contractual relationship between the

parties and on such termination of such relationships the parties are released from their
obligations in the contract.

Modes of discharge of contract:

A contract can be discharged in the following modes.

a) By performance- Actual performance or attempted performance.

b) By mutual agreement-Novation, Alternation, Rescission and Remission.
c) By supervening impossibility- Destruction of subject matter of contract, non-
existence or non-occurrence of a particular state of things.
d) Change of law or stepping in a person with statutory authority.
e) Death or personal incapacity of the party.
f) Declaration of war.
g) By operation of Law.
h) Death of promissory, Insolvency, Merger and loss of evidence.
i) By lapse of time prescribed by the contract.
j) By material alteration- when the promise or his agent makes any material
alteration without the consent of the other party.
k) By breach of contract- actual or anticipatory breach.

5) WHAT IS DIGITAL SIGNATURE AND ELECTRONIC SIGNATURE?

DIGITAL SIGNATURE [SEC. 2 (1) (P)]

Digital signature means authentication of any electronic record by a subscriber by

means of an electronic method or procedure in accordance with the provisions of
Section 3 of the Act.

ELECTRONIC SIGNATURE

The Information Technology Act, 2000 (IT Act) specifically confirms that contracts
cannot be denied enforceability merely because they are concluded electronically. To
prove a valid contract, parties sometimes have to present evidence in court. Leading
digital transaction management solutions can provide electronic records that are
admissible in evidence under Section 65B of the Evidence Act, 1872, to support the
existence, authenticity and valid acceptance of a contract.

6) WHAT IS CURRENT ACCOUNTS TRANSACTION AND CAPITAL

ACCOUNT TRANSCATION?

Meaning of Capital Account Transaction

A Current Account Transaction has been defined as a Transaction other than Capital
Account Transactions, means all transaction which do not alter assets or liability
outside India of resident or assets or liability in India of Non Resident treated as
Current Account Transactions and without prejudice to the generality of the foregoing
such transaction includes,

1. Payments due in connection with foreign trade, other current business, services,
and short term banking and credit facilities in the ordinary course of business.

2. Payments due as interest on loans and as net income from investments,

 3. Remittances for living expenses of parents, children, and spouse residing abroad,

4. Expenses in connection with foreign travel, education and medical care of

Parents, Spouse and children’s.

LONG ANSWERS:

1) WHAT ARE THE FEATURES OF COMPETITION ACT AND WHAT ARE

THE POWERS OF COMPETITION COMMISIION?

Competition Act, 2002.

Consequent to opening of Indian economy to global economy and liberalization several
procedures and rules relating to economic activity have been liberalized and have been
made more competitive and ease of doing business.
The MRTP Act has been repealed and a new act to deal with the new economic
situation has been introduced. The Competition Act, 2002 was enacted keeping in mind
the following objectives.
1. To prevent practices having adverse effect on competition.
2. To promote and sustain competition in the market.
3. To protect the interests of the consumers and
4. To ensure freedom of trade carried on the other participants in markets in India.

Competition Commission of India.

 The Act empowers the Central Government to appoint a commission

called as the “Competition Commission of India”.
 It is a corporate body having perpetual succession and a common seal.
 It has the power to acquire, hold and dispose of property and sue and be
sued.
 The commission shall consist of a Chairperson, and between 2 to 10
persons appointed by the Central Government.

The qualifications required for the Chairperson and other members are:
a) Are or have been qualified to be the Judge of a High Court or,
b) Should have special knowledge and professional knowledge for not less than
15 years in the field of International Trade, economics, business, commerce,
law, finance, accountancy, management etc.
2) WHAT ARE THE OBJECTIVES OF CONSUMER PROTECTION
ACT.UNFAIR TRADE PRACTICES AND RESTRICTIVE TRADE
PRACTICES?

OBJECT OF THE ACT

 Promoting and protecting the rights of the consumers.

 Providing for the establishment of consumer councils and other authorities.

Providing speedy and simple redressal machinery at district, state and central
levels for settling consumer disputes and matters connected there with.

UNFAIR TRADE PRACTICES.

 The Act defines unfair trade practice as a means of trade practice for the purpose
of promoting sale, use or supply of any goods, provision of service, adopts any
unfair method or unfair or deceptive practice.

 Unfair trade practices include the following practices.

 Misleading advertisement and false representation.

 Bargain sale.

 Offering gifts, prizes with the intention of not providing and lottery.

 Non confirming to the prescribed standards.

 Hoarding or destruction of goods.

RESTRICTIVE TRADE PRACTICE

A commercial practice operated by a firm which has the effect of restricting,distorting

or eliminating competition (especially if operated by a dominant firm) to the detriment
of other suppliers andconsumers. examples of restrictive practices include exclusive
dealing, refusal to supply, full line forcing, tie-in sales, aggregated rebates, resale price
maintenance and loss leading.
under the competitionact, 1998, exclusive dealing, full line forcing, tie-in sales and agg
regated rebates can beinvestigated by the office of fair
trading and (if necessary) the competition
commission, and prohibited iffound to unduly restrict competition. the resale price
acts 1964,1976 make the practice of resale price maintenanceillegal unless it is, very ex
ceptionally, exempted by the office of fair trading.

SHORT ANSWERS:

1 IRDA

Insurance Regulatory and Development Authority of India established under sub-

section (1) of section 3 of Insurance Regulatory and Development Authority Act, 1999
(41 of 1999);

2 MINOR

According to section 3 of the Majority Act, 1875 read with amendment 1999 a person
is a minor if he has not completed 18 years of age.

3 DOCTRINE OF ULTRA VIRES

The objects of the company are set out in the MOA and are to be strictly adhered to.
Companies are not suppose to do anything outside the powers stipulated in the MOA
and such acts if any are considered ultra vires and will not bring the company.
All ultra vires acts are null and void ab initio and it cannot be ratified even by the
unanimous vote lf all the members of the company.

4 INDEPENDNT DIRECTORS

 An independent director is “a director other than a managing director or a whole

time director or a nominee director.
 The qualification of an independent director, include being a person of integrity
and possess relevant expertise and experience.
 An independent director is not entitled to any remuneration other than sitting
fee, reimbursement of expenses for attending meeting.
 He should be promoter of the company.
  Should not be related to promoter of any holding or subsidiary or associate
companies.
 He should have any pecuniary relationship with the company, and its
subsidiaries etc.

5 WHO IS CONSUMER

CONSUMER- DEFINATION.

 The Act defines the word “Consumer” which includes

 A) A person who buys any goods for a consideration which has been paid or
promised or partly paid and partly promised or under any system of deferred
payment. It also included any other user of such goods when such use is made
with the approval of the buyer.

6 DOCTRINE OF INDOOR MANAGER

The doctrine of Indoor management is an exception the rule of constructive notice.

According to this doctrine, persons dealing with the company are entitled to
presume that the internal requirements prescribed in the MOA and AOA have been
properly observed.

7 BILL OF EXCHANGE

A bill of exchange is an instrument in wring containing an unconditional order signed

by the maker directing a certain person to pay a certain sum of money only to, or to
the order of, a certain person or to the bearer of the instrument
8 COMPOSITE BROKER

Composite broker- means an insurance broker who for the time-being registered by the
Authority to act as such, for a remuneration or fee, arranges insurance for its clients
with insurers and/or reinsurance for its client/s with insurers and reinsurers located in
India and abroad

9 ELECTRONIC GOVERNANCE

The object of the Information Technology Act, 2000 is to provide legal recognition for
transactions carried out by means of electronic data interchange and other means of
electronic communication commonly referred to as 'electronic commerce'. The Act
facilitates electronic governance to accord legal recognition to electronic record,
digital signatures, and electronic form of dealing with government offices and its
agencies.

10 AUTHORISED PERSON

 Section 10 deals with the procedure of appointing authorised person by the

Reserve Bank,

 Section 11 specifies the powers of the RBI to issue directions to authorised

person and

 Section 12 prescribes the power of the RBI to inspect authorised person.