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CS Executive · Setting Up of Business, Industrial and Labour Laws · Selection of Business Organization

A partnership firm of Mehta and Iyer seeks registration as a company under the relevant Part. Which of the following is among the obligations that the text requires of the company seeking registration?

The company must ensure that its secured creditors have either consented to, or given no objection to, the registration. The law does not require unsecured creditors' approval, and advertising must be in English and vernacular, with an affidavit from all partners.

  1. AObtain approval of all unsecured creditors in writing
  2. BEnsure secured creditors have either consented or given no objection to the registrationCorrect
  3. CPublish advertisement only in English newspaper
  4. DFile an affidavit from only the managing partner

Explanation

Section 374(a) requires that secured creditors have either consented or given no objection. Clause (b) requires advertisements in one English and one vernacular newspaper, so English only is wrong. Clause (c) requires an affidavit from all members or partners, not just one. Unsecured creditor approval is not listed.

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