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CS Professional · Internal and Forensic Audit · Forensic Audit: Laws and Regulations

During a forensic review at Kaveri Agro Producer Company, an auditor finds that the company's own instrument provides a procedure that conflicts with the Companies Act chapter on Producer Companies. Which statement best reflects Section 378ZQ of the Companies Act, 2013?

The Producer Company Chapter overrides inconsistent provisions of the Companies Act, any other law or any instrument under such law. Provisions of those laws that are not varied by or inconsistent with the Chapter still apply to the Producer Company, so the override is limited to the extent of inconsistency.

  1. AThe Chapter prevails over inconsistent provisions of the Act, any other law or any instrument, while non-inconsistent provisions of other laws still apply to the Producer CompanyCorrect
  2. BThe Chapter prevails only over the memorandum and articles of the company
  3. COther laws always prevail over the Chapter in case of conflict
  4. DThe Chapter excludes the application of every other law to a Producer Company

Explanation

Section 378ZQ gives the Chapter effect notwithstanding anything inconsistent in the Act, any other law or any instrument having effect under such law. However, provisions of such Act, law or instrument that are not varied by or inconsistent with the Chapter continue to apply to the Producer Company. Hence the override is limited to inconsistency, not a total exclusion.

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