CMA Inter Paper 5: Business Laws and Ethics cheat sheet

Section 2(h): a contract is an agreement enforceable by law; agreement (S.2(e)) = offer + acceptance, so contract = agreement + consideration + enforceability.

Valid contract needs offer, acceptance, lawful consideration, capacity, free consent, lawful object and certainty; S.10.

S.11 capacity: minor, person of unsound mind, person disqualified by law. Agreement with a minor is void ab initio (Mohori Bibee v. Dharmodas Ghose); a minor can be a beneficiary.

S.14 free consent requires absence of coercion (S.15), undue influence (S.16), fraud (S.17), misrepresentation (S.18) and mistake (S.20-22); consent caused by these is voidable except bilateral mistake, which is void.

Consideration: 'something in return' - may be past, present or future, and may move from a third party (S.2(d)); need not be adequate but must be real and lawful.

S.56: agreement becomes void when performance impossible; initial impossibility of a known fact is void (S.20); supervening illegality also discharges.

Contingent contract (S.31): enforceable only on happening of a collateral event; S.32 void on impossibility of event, S.30 wagering agreements are void but not illegal (collateral transactions valid).

Quasi-contracts (S.68-72): necessaries supplied to a person incapable of contracting, payment by mistake or coercion, non-gratuitous acts, finder of goods, money paid by mistake - restitutionary, not consensual.

Remedies: damages under S.73 (natural consequence, remoteness - Hadley v. Baxendale), liquidated damages vs penalty, specific performance and injunction under Specific Relief Act, 1963.

Indemnity (S.124): promise to save another from loss caused by conduct of promisor or any other person; has two parties, no primary liability of indemnity-holder.

Guarantee (S.126): three parties - surety, principal debtor, creditor; surety's liability is secondary and co-extensive with the principal debtor's unless otherwise agreed (S.128).

Surety discharged by variance in terms without consent (S.133), release/discharge of principal debtor (S.134), creditor's act or omission impairing surety's remedy (S.139); S.135 composition/extension needs surety consent.

Bailment (S.148): delivery of goods for a purpose upon return or disposal; bailor, bailee, no transfer of ownership. Bailee's duties: reasonable care (S.151), no unauthorised use (S.154), return goods (S.160-161).

Bailee's lien: particular lien (S.170) for services involving labour/skill on those goods; general lien available only to bankers, factors, wharfingers, attorneys and policy-brokers (S.171).

Pledge (S.172): bailment of goods as security for debt or promise; pawnee has right of retainer (S.173), right to sell after notice on default (S.176), and pledge by mercantile agent is protected (S.178).

Finder of goods (S.168-169): duties of reasonable care and locating owner; has particular lien for expenses and may sell when goods are perishable or owner not found.

Agency (S.182): agent acts for principal; no consideration needed (S.185); agency may be express, implied, by estoppel or by necessity (S.188-189).

Agent's authority: actual (express/implied) and apparent; termination by revocation, renunciation, completion, death or insanity (S.201); irrevocable agency where agent has interest (S.202).

S.4 SOGA: sale = transfer of property in goods for a price; agreement to sell is a future transfer subject to conditions - risk prima facie passes with property (S.26), not with delivery.

Conditions vs warranties (S.12): breach of condition allows repudiation plus damages; breach of warranty only damages. S.13-16 cover implied conditions as to title, description, merchantability and fitness for purpose.

Caveat emptor (S.16) applies unless buyer relies on seller's skill, goods are of a description for which seller deals, or usage of trade implies a condition.

Unpaid seller's rights (S.45-54): lien, stoppage in transit, resale; right of resale where property has not passed and buyer defaults, with notice where goods are perishable.

S.27-30: nemo dat rule - seller without title passes none, except sale by mercantile agent, joint owner, or under voidable title, or sale by buyer in possession.

NI Act S.13: negotiable instrument = promissory note, bill of exchange or cheque, payable to bearer or order; S.4, S.5 and S.6 define note, bill and cheque respectively.

Holder in due course (S.9) takes free from defects; privileges under S.36, S.42, S.43 and S.120 (no maker defence against holder in due course).

S.138 dishonour of cheque for insufficiency of funds: 30-day notice, 15 days to pay, complaint within one month; offence punishable with imprisonment up to 2 years or fine up to twice the amount, or both.

S.118-119 presumptions: as to consideration, date, time of acceptance and transfer; S.20 inchoate instruments; S.123-131 crossing of cheques and protection of paying banker.

S.4 Partnership Act: relation between persons who agree to share profits of a business carried on by all or any acting for all; mutual agency is the test.

Essentials: agreement, business, profit-sharing, mutual agency; registration is optional but unregistered firm cannot enforce rights in court (S.69).

Types of partners: active, sleeping, nominal, partner in profits only, sub-partner, partner by estoppel (S.28) and partner by holding out.

S.18: partner is agent of the firm; S.19 implied authority; S.20 no authority to open a bank account in own name, compromise claims, withdraw suit or submit a dispute to arbitration without consent.

S.30: minor admitted to benefits is liable only to the extent of share, cannot sue for accounts except on severance; on attaining majority must elect within 6 months.

Dissolution: by agreement, compulsory (S.41), on contingency (S.42), by notice (S.43), by insolvency or death (S.44); consequences under S.45-55 - liability continues until public notice.

LLP Act S.3: body corporate with perpetual succession, separate legal entity, minimum 2 partners, no maximum, at least 2 designated partners with one resident in India (S.7).

LLP S.26-28: partner is agent of LLP, not of other partners; liability limited to agreed contribution; LLP is liable for wrongful acts of partners in course of business; S.30 investigation.

LLP conversion from firm/company under S.18 and Second Schedule; registration with ROC through Form FiLLiP; LLP agreement within 30 days of incorporation.

S.3: public company minimum 7 members, private 2, OPC 1; private company maximum 200 members excluding employees (S.2(68)).

S.7: incorporation by filing MOA, AOA, declarations and fee with ROC; certificate of incorporation is conclusive evidence of existence.

S.2(70)/(71): prospectus is any document inviting offers for subscription of securities; deemed prospectus where offer is made to the public by a company's allotment.

S.26: contents of prospectus - particulars of offer, capital structure, risk factors, auditor's report, details of directors and litigation; S.27 variation of terms requires special resolution and exit option.

S.34: criminal liability for misstatements in prospectus - imprisonment 6 months to 10 years or fine 3 times the amount raised, or both; S.35 civil liability to compensate investors.

S.42 private placement: limit of 200 persons in a financial year, no public advertisement, funds in separate bank account, return of allotment in PAS-3 within 15 days.

S.43-47: preference shares carry preferential dividend and repayment; equity shares carry voting rights; differential rights permitted under S.43(a) with rules.

S.53: no shares may be issued at a discount except sweat equity (S.54); S.52 securities premium; S.55 preference shares redeemable within 20 years.

S.2(55) member: subscriber to MOA, person agreeing in writing and entered in register of members, beneficial owner under S.89, or holder of share warrant.

S.149: minimum 3 independent directors for listed public companies (1/3 of total), 2 for other prescribed public companies; S.152 appointment of directors by members.

S.165: maximum 20 directorships per person (10 for a public company directorship limit under rules); S.167 vacation of office grounds.

Board meetings (S.173): at least 4 per year with gap not exceeding 120 days; notice of 7 days; quorum is 1/3 of total strength or 2 directors, whichever is higher (S.174).

AGM (S.96): first AGM within 9 months of first financial year end, thereafter within 6 months of financial year end and gap not exceeding 15 months; S.97 power of CG to call AGM.

EGM (S.100): called on requisition of members holding 1/10 of paid-up capital or voting power; S.101 notice of 21 clear days; S.102 explanatory statement.

S.105 proxy: instrument in Form MGT-11, deposited 48 hours before meeting; proxy cannot speak or vote except on a poll; S.106 voting by show of hands or e-voting.

Dividend (S.123): only out of profits of the year or undistributed profits, after providing depreciation; transfer to reserves as per rules; S.124 unpaid dividend account within 7 days, transfer to IEPF after 7 years.

S.128: books of account at registered office; S.129 financial statements; S.134 Board's report; S.135 CSR - 2% of average net profit of preceding 3 years for companies meeting thresholds.

S.139 auditor appointment for 5 years; S.141 disqualifications; S.143 powers and duties; S.148 cost audit for prescribed industries.

Factories Act, 1948: factory = 10 or more workers with power, 20 or more without power; S.51 weekly hours 48, S.54 daily 9 hours, S.55 rest interval, S.59 overtime at twice ordinary rate.

Payment of Wages Act, 1936: wage period not exceeding one month; S.7 deductions limited to 50% of wages (75% where deductions include cooperative society payments); S.5 time limit 7th or 10th day.

Payment of Bonus Act, 1965: establishments with 20 or more employees; minimum bonus 8.33% and maximum 20% of salary/wages; eligibility wage ceiling and 30 working days.

Payment of Gratuity Act, 1972: 10 or more employees; 5 years continuous service; formula = last drawn salary × 15/26 × years of service; maximum ₹20 lakh.

EPF & MP Act, 1952: 20 or more employees; employee contribution 12% of basic plus DA; employer 12% (8.33% to EPS, 3.67% to EPF); wage ceiling ₹15,000.

ESI Act, 1948: establishments with 10 or more employees; wage ceiling ₹21,000 (₹25,000 for persons with disability); employee 0.75%, employer 3.25% of wages.

Industrial Disputes Act, 1947: works committee (100+), conciliation officer, Board of Conciliation, Court of Inquiry, Labour Court, Industrial Tribunal, National Tribunal; S.2A individual disputes.

Consumer Protection Act, 2019: District Commission up to ₹50 lakh, State ₹50 lakh to ₹2 crore, National above ₹2 crore; product liability and unfair trade practice covered; e-commerce included.

Competition Act, 2002: prohibits anti-competitive agreements (S.3), abuse of dominant position (S.4); combinations regulated under S.5-6; CCI is the regulator.

FEMA, 1999: current account vs capital account transactions; RBI regulates capital account; compounding of contraventions; PMLA, 2002: reporting entities, KYC, suspicious transaction reports to FIU-IND, offence punishable up to 7 years.

Business ethics concerns principles, values and standards guiding business conduct beyond legal minimum; core values include honesty, integrity, fairness, transparency and accountability.

Ethical theories: teleological (consequentialist, e.g. utilitarianism maximising welfare) vs deontological (duty-based, Kantian); virtue ethics focuses on character.

Code of conduct and code of ethics; whistle-blower policy under S.177(9) and SEBI LODR for listed companies; vigil mechanism mandatory for listed and prescribed companies.

Corporate governance: system of rules and practices by which a company is directed and controlled; pillars are transparency, accountability, fairness and responsibility.

Agency theory (separation of ownership and control) and stakeholder theory underpin governance; principal-agent conflicts mitigated by independent directors and disclosures.

Cadbury, OECD and SEBI (LODR) principles; Companies Act, 2013 provisions: independent directors, audit committee, nomination and remuneration committee, CSR committee.

S.135 CSR: 2% of average net profit of three preceding financial years for companies with net worth ₹500 crore, turnover ₹1,000 crore or net profit ₹5 crore.

Corporate social responsibility vs corporate sustainability vs triple bottom line (people, planet, profit); ethical decision frameworks: utilitarian, rights, justice and virtue approaches.

Fraud risk and ethics: conflict of interest, insider trading prohibited under SEBI (PIT) Regulations, 2015, and bribery under Prevention of Corruption Act, 1988.

Section 2(h): a contract is an agreement enforceable by law; agreement (S.2(e)) = offer + acceptance, so contract = agreement + consideration + enforceability.

Valid contract needs offer, acceptance, lawful consideration, capacity, free consent, lawful object and certainty; S.10.

S.11 capacity: minor, person of unsound mind, person disqualified by law. Agreement with a minor is void ab initio (Mohori Bibee v. Dharmodas Ghose); a minor can be a beneficiary.

S.14 free consent requires absence of coercion (S.15), undue influence (S.16), fraud (S.17), misrepresentation (S.18) and mistake (S.20-22); consent caused by these is voidable except bilateral mistake, which is void.

Consideration: 'something in return' - may be past, present or future, and may move from a third party (S.2(d)); need not be adequate but must be real and lawful.

S.56: agreement becomes void when performance impossible; initial impossibility of a known fact is void (S.20); supervening illegality also discharges.

Contingent contract (S.31): enforceable only on happening of a collateral event; S.32 void on impossibility of event, S.30 wagering agreements are void but not illegal (collateral transactions valid).

Quasi-contracts (S.68-72): necessaries supplied to a person incapable of contracting, payment by mistake or coercion, non-gratuitous acts, finder of goods, money paid by mistake - restitutionary, not consensual.

Remedies: damages under S.73 (natural consequence, remoteness - Hadley v. Baxendale), liquidated damages vs penalty, specific performance and injunction under Specific Relief Act, 1963.

Indemnity (S.124): promise to save another from loss caused by conduct of promisor or any other person; has two parties, no primary liability of indemnity-holder.

Guarantee (S.126): three parties - surety, principal debtor, creditor; surety's liability is secondary and co-extensive with the principal debtor's unless otherwise agreed (S.128).

Surety discharged by variance in terms without consent (S.133), release/discharge of principal debtor (S.134), creditor's act or omission impairing surety's remedy (S.139); S.135 composition/extension needs surety consent.

Bailment (S.148): delivery of goods for a purpose upon return or disposal; bailor, bailee, no transfer of ownership. Bailee's duties: reasonable care (S.151), no unauthorised use (S.154), return goods (S.160-161).

Bailee's lien: particular lien (S.170) for services involving labour/skill on those goods; general lien available only to bankers, factors, wharfingers, attorneys and policy-brokers (S.171).

Pledge (S.172): bailment of goods as security for debt or promise; pawnee has right of retainer (S.173), right to sell after notice on default (S.176), and pledge by mercantile agent is protected (S.178).

Finder of goods (S.168-169): duties of reasonable care and locating owner; has particular lien for expenses and may sell when goods are perishable or owner not found.

Agency (S.182): agent acts for principal; no consideration needed (S.185); agency may be express, implied, by estoppel or by necessity (S.188-189).

Agent's authority: actual (express/implied) and apparent; termination by revocation, renunciation, completion, death or insanity (S.201); irrevocable agency where agent has interest (S.202).

S.4 SOGA: sale = transfer of property in goods for a price; agreement to sell is a future transfer subject to conditions - risk prima facie passes with property (S.26), not with delivery.

Conditions vs warranties (S.12): breach of condition allows repudiation plus damages; breach of warranty only damages. S.13-16 cover implied conditions as to title, description, merchantability and fitness for purpose.

Caveat emptor (S.16) applies unless buyer relies on seller's skill, goods are of a description for which seller deals, or usage of trade implies a condition.

Unpaid seller's rights (S.45-54): lien, stoppage in transit, resale; right of resale where property has not passed and buyer defaults, with notice where goods are perishable.

S.27-30: nemo dat rule - seller without title passes none, except sale by mercantile agent, joint owner, or under voidable title, or sale by buyer in possession.

NI Act S.13: negotiable instrument = promissory note, bill of exchange or cheque, payable to bearer or order; S.4, S.5 and S.6 define note, bill and cheque respectively.

Holder in due course (S.9) takes free from defects; privileges under S.36, S.42, S.43 and S.120 (no maker defence against holder in due course).

S.138 dishonour of cheque for insufficiency of funds: 30-day notice, 15 days to pay, complaint within one month; offence punishable with imprisonment up to 2 years or fine up to twice the amount, or both.

S.118-119 presumptions: as to consideration, date, time of acceptance and transfer; S.20 inchoate instruments; S.123-131 crossing of cheques and protection of paying banker.

S.4 Partnership Act: relation between persons who agree to share profits of a business carried on by all or any acting for all; mutual agency is the test.

Essentials: agreement, business, profit-sharing, mutual agency; registration is optional but unregistered firm cannot enforce rights in court (S.69).

Types of partners: active, sleeping, nominal, partner in profits only, sub-partner, partner by estoppel (S.28) and partner by holding out.

S.18: partner is agent of the firm; S.19 implied authority; S.20 no authority to open a bank account in own name, compromise claims, withdraw suit or submit a dispute to arbitration without consent.

S.30: minor admitted to benefits is liable only to the extent of share, cannot sue for accounts except on severance; on attaining majority must elect within 6 months.

Dissolution: by agreement, compulsory (S.41), on contingency (S.42), by notice (S.43), by insolvency or death (S.44); consequences under S.45-55 - liability continues until public notice.

LLP Act S.3: body corporate with perpetual succession, separate legal entity, minimum 2 partners, no maximum, at least 2 designated partners with one resident in India (S.7).

LLP S.26-28: partner is agent of LLP, not of other partners; liability limited to agreed contribution; LLP is liable for wrongful acts of partners in course of business; S.30 investigation.

LLP conversion from firm/company under S.18 and Second Schedule; registration with ROC through Form FiLLiP; LLP agreement within 30 days of incorporation.

S.3: public company minimum 7 members, private 2, OPC 1; private company maximum 200 members excluding employees (S.2(68)).

S.7: incorporation by filing MOA, AOA, declarations and fee with ROC; certificate of incorporation is conclusive evidence of existence.

S.2(70)/(71): prospectus is any document inviting offers for subscription of securities; deemed prospectus where offer is made to the public by a company's allotment.

S.26: contents of prospectus - particulars of offer, capital structure, risk factors, auditor's report, details of directors and litigation; S.27 variation of terms requires special resolution and exit option.

S.34: criminal liability for misstatements in prospectus - imprisonment 6 months to 10 years or fine 3 times the amount raised, or both; S.35 civil liability to compensate investors.

S.42 private placement: limit of 200 persons in a financial year, no public advertisement, funds in separate bank account, return of allotment in PAS-3 within 15 days.

S.43-47: preference shares carry preferential dividend and repayment; equity shares carry voting rights; differential rights permitted under S.43(a) with rules.

S.53: no shares may be issued at a discount except sweat equity (S.54); S.52 securities premium; S.55 preference shares redeemable within 20 years.

S.2(55) member: subscriber to MOA, person agreeing in writing and entered in register of members, beneficial owner under S.89, or holder of share warrant.

S.149: minimum 3 independent directors for listed public companies (1/3 of total), 2 for other prescribed public companies; S.152 appointment of directors by members.

S.165: maximum 20 directorships per person (10 for a public company directorship limit under rules); S.167 vacation of office grounds.

Board meetings (S.173): at least 4 per year with gap not exceeding 120 days; notice of 7 days; quorum is 1/3 of total strength or 2 directors, whichever is higher (S.174).

AGM (S.96): first AGM within 9 months of first financial year end, thereafter within 6 months of financial year end and gap not exceeding 15 months; S.97 power of CG to call AGM.

EGM (S.100): called on requisition of members holding 1/10 of paid-up capital or voting power; S.101 notice of 21 clear days; S.102 explanatory statement.

S.105 proxy: instrument in Form MGT-11, deposited 48 hours before meeting; proxy cannot speak or vote except on a poll; S.106 voting by show of hands or e-voting.

Dividend (S.123): only out of profits of the year or undistributed profits, after providing depreciation; transfer to reserves as per rules; S.124 unpaid dividend account within 7 days, transfer to IEPF after 7 years.

S.128: books of account at registered office; S.129 financial statements; S.134 Board's report; S.135 CSR - 2% of average net profit of preceding 3 years for companies meeting thresholds.

S.139 auditor appointment for 5 years; S.141 disqualifications; S.143 powers and duties; S.148 cost audit for prescribed industries.

Factories Act, 1948: factory = 10 or more workers with power, 20 or more without power; S.51 weekly hours 48, S.54 daily 9 hours, S.55 rest interval, S.59 overtime at twice ordinary rate.

Payment of Wages Act, 1936: wage period not exceeding one month; S.7 deductions limited to 50% of wages (75% where deductions include cooperative society payments); S.5 time limit 7th or 10th day.

Payment of Bonus Act, 1965: establishments with 20 or more employees; minimum bonus 8.33% and maximum 20% of salary/wages; eligibility wage ceiling and 30 working days.

Payment of Gratuity Act, 1972: 10 or more employees; 5 years continuous service; formula = last drawn salary × 15/26 × years of service; maximum ₹20 lakh.

EPF & MP Act, 1952: 20 or more employees; employee contribution 12% of basic plus DA; employer 12% (8.33% to EPS, 3.67% to EPF); wage ceiling ₹15,000.

ESI Act, 1948: establishments with 10 or more employees; wage ceiling ₹21,000 (₹25,000 for persons with disability); employee 0.75%, employer 3.25% of wages.

Industrial Disputes Act, 1947: works committee (100+), conciliation officer, Board of Conciliation, Court of Inquiry, Labour Court, Industrial Tribunal, National Tribunal; S.2A individual disputes.

Consumer Protection Act, 2019: District Commission up to ₹50 lakh, State ₹50 lakh to ₹2 crore, National above ₹2 crore; product liability and unfair trade practice covered; e-commerce included.

Competition Act, 2002: prohibits anti-competitive agreements (S.3), abuse of dominant position (S.4); combinations regulated under S.5-6; CCI is the regulator.

FEMA, 1999: current account vs capital account transactions; RBI regulates capital account; compounding of contraventions; PMLA, 2002: reporting entities, KYC, suspicious transaction reports to FIU-IND, offence punishable up to 7 years.

Business ethics concerns principles, values and standards guiding business conduct beyond legal minimum; core values include honesty, integrity, fairness, transparency and accountability.

Ethical theories: teleological (consequentialist, e.g. utilitarianism maximising welfare) vs deontological (duty-based, Kantian); virtue ethics focuses on character.

Code of conduct and code of ethics; whistle-blower policy under S.177(9) and SEBI LODR for listed companies; vigil mechanism mandatory for listed and prescribed companies.

Corporate governance: system of rules and practices by which a company is directed and controlled; pillars are transparency, accountability, fairness and responsibility.

Agency theory (separation of ownership and control) and stakeholder theory underpin governance; principal-agent conflicts mitigated by independent directors and disclosures.

Cadbury, OECD and SEBI (LODR) principles; Companies Act, 2013 provisions: independent directors, audit committee, nomination and remuneration committee, CSR committee.

S.135 CSR: 2% of average net profit of three preceding financial years for companies with net worth ₹500 crore, turnover ₹1,000 crore or net profit ₹5 crore.

Corporate social responsibility vs corporate sustainability vs triple bottom line (people, planet, profit); ethical decision frameworks: utilitarian, rights, justice and virtue approaches.

Fraud risk and ethics: conflict of interest, insider trading prohibited under SEBI (PIT) Regulations, 2015, and bribery under Prevention of Corruption Act, 1988.

Section 2(h): a contract is an agreement enforceable by law; agreement (S.2(e)) = offer + acceptance, so contract = agreement + consideration + enforceability.

Valid contract needs offer, acceptance, lawful consideration, capacity, free consent, lawful object and certainty; S.10.

S.11 capacity: minor, person of unsound mind, person disqualified by law. Agreement with a minor is void ab initio (Mohori Bibee v. Dharmodas Ghose); a minor can be a beneficiary.

S.14 free consent requires absence of coercion (S.15), undue influence (S.16), fraud (S.17), misrepresentation (S.18) and mistake (S.20-22); consent caused by these is voidable except bilateral mistake, which is void.

Consideration: 'something in return' - may be past, present or future, and may move from a third party (S.2(d)); need not be adequate but must be real and lawful.

S.56: agreement becomes void when performance impossible; initial impossibility of a known fact is void (S.20); supervening illegality also discharges.

Contingent contract (S.31): enforceable only on happening of a collateral event; S.32 void on impossibility of event, S.30 wagering agreements are void but not illegal (collateral transactions valid).

Quasi-contracts (S.68-72): necessaries supplied to a person incapable of contracting, payment by mistake or coercion, non-gratuitous acts, finder of goods, money paid by mistake - restitutionary, not consensual.

Remedies: damages under S.73 (natural consequence, remoteness - Hadley v. Baxendale), liquidated damages vs penalty, specific performance and injunction under Specific Relief Act, 1963.

Indemnity (S.124): promise to save another from loss caused by conduct of promisor or any other person; has two parties, no primary liability of indemnity-holder.

Guarantee (S.126): three parties - surety, principal debtor, creditor; surety's liability is secondary and co-extensive with the principal debtor's unless otherwise agreed (S.128).

Surety discharged by variance in terms without consent (S.133), release/discharge of principal debtor (S.134), creditor's act or omission impairing surety's remedy (S.139); S.135 composition/extension needs surety consent.

Bailment (S.148): delivery of goods for a purpose upon return or disposal; bailor, bailee, no transfer of ownership. Bailee's duties: reasonable care (S.151), no unauthorised use (S.154), return goods (S.160-161).

Bailee's lien: particular lien (S.170) for services involving labour/skill on those goods; general lien available only to bankers, factors, wharfingers, attorneys and policy-brokers (S.171).

Pledge (S.172): bailment of goods as security for debt or promise; pawnee has right of retainer (S.173), right to sell after notice on default (S.176), and pledge by mercantile agent is protected (S.178).

Finder of goods (S.168-169): duties of reasonable care and locating owner; has particular lien for expenses and may sell when goods are perishable or owner not found.

Agency (S.182): agent acts for principal; no consideration needed (S.185); agency may be express, implied, by estoppel or by necessity (S.188-189).

Agent's authority: actual (express/implied) and apparent; termination by revocation, renunciation, completion, death or insanity (S.201); irrevocable agency where agent has interest (S.202).

S.4 SOGA: sale = transfer of property in goods for a price; agreement to sell is a future transfer subject to conditions - risk prima facie passes with property (S.26), not with delivery.

Conditions vs warranties (S.12): breach of condition allows repudiation plus damages; breach of warranty only damages. S.13-16 cover implied conditions as to title, description, merchantability and fitness for purpose.

Caveat emptor (S.16) applies unless buyer relies on seller's skill, goods are of a description for which seller deals, or usage of trade implies a condition.

Unpaid seller's rights (S.45-54): lien, stoppage in transit, resale; right of resale where property has not passed and buyer defaults, with notice where goods are perishable.

S.27-30: nemo dat rule - seller without title passes none, except sale by mercantile agent, joint owner, or under voidable title, or sale by buyer in possession.

NI Act S.13: negotiable instrument = promissory note, bill of exchange or cheque, payable to bearer or order; S.4, S.5 and S.6 define note, bill and cheque respectively.

Holder in due course (S.9) takes free from defects; privileges under S.36, S.42, S.43 and S.120 (no maker defence against holder in due course).

S.138 dishonour of cheque for insufficiency of funds: 30-day notice, 15 days to pay, complaint within one month; offence punishable with imprisonment up to 2 years or fine up to twice the amount, or both.

S.118-119 presumptions: as to consideration, date, time of acceptance and transfer; S.20 inchoate instruments; S.123-131 crossing of cheques and protection of paying banker.

S.4 Partnership Act: relation between persons who agree to share profits of a business carried on by all or any acting for all; mutual agency is the test.

Essentials: agreement, business, profit-sharing, mutual agency; registration is optional but unregistered firm cannot enforce rights in court (S.69).

Types of partners: active, sleeping, nominal, partner in profits only, sub-partner, partner by estoppel (S.28) and partner by holding out.

S.18: partner is agent of the firm; S.19 implied authority; S.20 no authority to open a bank account in own name, compromise claims, withdraw suit or submit a dispute to arbitration without consent.

S.30: minor admitted to benefits is liable only to the extent of share, cannot sue for accounts except on severance; on attaining majority must elect within 6 months.

Dissolution: by agreement, compulsory (S.41), on contingency (S.42), by notice (S.43), by insolvency or death (S.44); consequences under S.45-55 - liability continues until public notice.

LLP Act S.3: body corporate with perpetual succession, separate legal entity, minimum 2 partners, no maximum, at least 2 designated partners with one resident in India (S.7).

LLP S.26-28: partner is agent of LLP, not of other partners; liability limited to agreed contribution; LLP is liable for wrongful acts of partners in course of business; S.30 investigation.

LLP conversion from firm/company under S.18 and Second Schedule; registration with ROC through Form FiLLiP; LLP agreement within 30 days of incorporation.

S.3: public company minimum 7 members, private 2, OPC 1; private company maximum 200 members excluding employees (S.2(68)).

S.7: incorporation by filing MOA, AOA, declarations and fee with ROC; certificate of incorporation is conclusive evidence of existence.

S.2(70)/(71): prospectus is any document inviting offers for subscription of securities; deemed prospectus where offer is made to the public by a company's allotment.

S.26: contents of prospectus - particulars of offer, capital structure, risk factors, auditor's report, details of directors and litigation; S.27 variation of terms requires special resolution and exit option.

S.34: criminal liability for misstatements in prospectus - imprisonment 6 months to 10 years or fine 3 times the amount raised, or both; S.35 civil liability to compensate investors.

S.42 private placement: limit of 200 persons in a financial year, no public advertisement, funds in separate bank account, return of allotment in PAS-3 within 15 days.

S.43-47: preference shares carry preferential dividend and repayment; equity shares carry voting rights; differential rights permitted under S.43(a) with rules.

S.53: no shares may be issued at a discount except sweat equity (S.54); S.52 securities premium; S.55 preference shares redeemable within 20 years.

S.2(55) member: subscriber to MOA, person agreeing in writing and entered in register of members, beneficial owner under S.89, or holder of share warrant.

S.149: minimum 3 independent directors for listed public companies (1/3 of total), 2 for other prescribed public companies; S.152 appointment of directors by members.

S.165: maximum 20 directorships per person (10 for a public company directorship limit under rules); S.167 vacation of office grounds.

Board meetings (S.173): at least 4 per year with gap not exceeding 120 days; notice of 7 days; quorum is 1/3 of total strength or 2 directors, whichever is higher (S.174).

AGM (S.96): first AGM within 9 months of first financial year end, thereafter within 6 months of financial year end and gap not exceeding 15 months; S.97 power of CG to call AGM.

EGM (S.100): called on requisition of members holding 1/10 of paid-up capital or voting power; S.101 notice of 21 clear days; S.102 explanatory statement.

S.105 proxy: instrument in Form MGT-11, deposited 48 hours before meeting; proxy cannot speak or vote except on a poll; S.106 voting by show of hands or e-voting.

Dividend (S.123): only out of profits of the year or undistributed profits, after providing depreciation; transfer to reserves as per rules; S.124 unpaid dividend account within 7 days, transfer to IEPF after 7 years.

S.128: books of account at registered office; S.129 financial statements; S.134 Board's report; S.135 CSR - 2% of average net profit of preceding 3 years for companies meeting thresholds.

S.139 auditor appointment for 5 years; S.141 disqualifications; S.143 powers and duties; S.148 cost audit for prescribed industries.

Factories Act, 1948: factory = 10 or more workers with power, 20 or more without power; S.51 weekly hours 48, S.54 daily 9 hours, S.55 rest interval, S.59 overtime at twice ordinary rate.

Payment of Wages Act, 1936: wage period not exceeding one month; S.7 deductions limited to 50% of wages (75% where deductions include cooperative society payments); S.5 time limit 7th or 10th day.

Payment of Bonus Act, 1965: establishments with 20 or more employees; minimum bonus 8.33% and maximum 20% of salary/wages; eligibility wage ceiling and 30 working days.

Payment of Gratuity Act, 1972: 10 or more employees; 5 years continuous service; formula = last drawn salary × 15/26 × years of service; maximum ₹20 lakh.

EPF & MP Act, 1952: 20 or more employees; employee contribution 12% of basic plus DA; employer 12% (8.33% to EPS, 3.67% to EPF); wage ceiling ₹15,000.

ESI Act, 1948: establishments with 10 or more employees; wage ceiling ₹21,000 (₹25,000 for persons with disability); employee 0.75%, employer 3.25% of wages.

Industrial Disputes Act, 1947: works committee (100+), conciliation officer, Board of Conciliation, Court of Inquiry, Labour Court, Industrial Tribunal, National Tribunal; S.2A individual disputes.

Consumer Protection Act, 2019: District Commission up to ₹50 lakh, State ₹50 lakh to ₹2 crore, National above ₹2 crore; product liability and unfair trade practice covered; e-commerce included.

Competition Act, 2002: prohibits anti-competitive agreements (S.3), abuse of dominant position (S.4); combinations regulated under S.5-6; CCI is the regulator.

FEMA, 1999: current account vs capital account transactions; RBI regulates capital account; compounding of contraventions; PMLA, 2002: reporting entities, KYC, suspicious transaction reports to FIU-IND, offence punishable up to 7 years.

Business ethics concerns principles, values and standards guiding business conduct beyond legal minimum; core values include honesty, integrity, fairness, transparency and accountability.

Ethical theories: teleological (consequentialist, e.g. utilitarianism maximising welfare) vs deontological (duty-based, Kantian); virtue ethics focuses on character.

Code of conduct and code of ethics; whistle-blower policy under S.177(9) and SEBI LODR for listed companies; vigil mechanism mandatory for listed and prescribed companies.

Corporate governance: system of rules and practices by which a company is directed and controlled; pillars are transparency, accountability, fairness and responsibility.

Agency theory (separation of ownership and control) and stakeholder theory underpin governance; principal-agent conflicts mitigated by independent directors and disclosures.

Cadbury, OECD and SEBI (LODR) principles; Companies Act, 2013 provisions: independent directors, audit committee, nomination and remuneration committee, CSR committee.

S.135 CSR: 2% of average net profit of three preceding financial years for companies with net worth ₹500 crore, turnover ₹1,000 crore or net profit ₹5 crore.

Corporate social responsibility vs corporate sustainability vs triple bottom line (people, planet, profit); ethical decision frameworks: utilitarian, rights, justice and virtue approaches.

Fraud risk and ethics: conflict of interest, insider trading prohibited under SEBI (PIT) Regulations, 2015, and bribery under Prevention of Corruption Act, 1988.