Skip to content

CS Executive · Capital Market and Securities Laws · Collective Investment Schemes

A scheme run by a firm has pooled investor money and is managed on behalf of the investors, who have no day-to-day control. Under Section 11AA(2), the scheme would still fail the definition if which feature were absent?

The scheme would fail if contributions were not made with a view to receive profits, income, produce or property, since that is one of the four cumulative conditions in Section 11AA(2). Identifiability of property, the type of person offering it, and a corpus threshold are not required under sub-section (2).

  1. AThe contributions being made with a view to receive profits, income, produce or propertyCorrect
  2. BThe property forming part of the scheme being identifiable
  3. CThe scheme being offered by a company
  4. DThe scheme having a corpus of at least one hundred crore rupees

Explanation

The profit-motive condition, a view to receive profits, income, produce or property, is one of the four cumulative conditions in Section 11AA(2). Without it the definition is not satisfied. The text says property may be identifiable or not, and the scheme may be offered by any person. The 100 crore corpus applies only in the proviso deeming provision.

Did you get it right without looking?

One question tells you little. A timed set on Collective Investment Schemes shows your real accuracy, how long you take and where you lose marks.

Practise Collective Investment SchemesFree diagnostic mock

More Collective Investment Schemes questions