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100+ Free CA Foundation Business Laws Practice Questions

ICAI CA Foundation Paper 2: Business Laws practice questions are available now; exam metadata is being verified.

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Which body in India primarily regulates banks and controls the issue of currency and monetary policy?

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2026 Statistics

Key Facts: CA Foundation Business Laws Exam

100

Marks in Paper 2

ICAI Foundation New Scheme Syllabus

3 hours

Exam Duration

ICAI Foundation New Scheme Syllabus

7 Acts

Legislations Covered

ICAI Foundation Paper 2 Study Material

40%

Per-Paper Pass Mark

ICAI Examination Rules

50%

Aggregate Pass Mark

ICAI Examination Rules

25-30%

Indian Contract Act Weight

ICAI Syllabus Analysis

ICAI CA Foundation Paper 2: Business Laws is a 100-mark, three-hour subjective (descriptive) paper under the New Scheme of Education and Training, 2023. It spans seven legislations, with the Indian Contract Act, 1872 carrying the highest weight, followed by the Sale of Goods Act, Indian Partnership Act, Companies Act, Negotiable Instruments Act, LLP Act, and the Indian Regulatory Framework. To pass, a candidate must score at least 40% in this paper and 50% in aggregate across all four Foundation papers. ICAI does not publish a separate question count or pass rate for Paper 2. This free bank offers 100 MCQs for knowledge prep aligned to the official syllabus.

Sample CA Foundation Business Laws Practice Questions

Try these sample questions to test your CA Foundation Business Laws exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the Indian legal system, which type of law deals with disputes between private individuals or organisations, such as breach of contract or recovery of debt?
A.Common Law
B.Constitutional Law
C.Criminal Law
D.Civil Law
Explanation: Civil Law governs disputes between private parties over rights and obligations, such as contracts, property, and torts, where the remedy is usually compensation or specific relief. Criminal Law deals with offences against the State and punishes wrongdoers.
2Which regulator in India is primarily responsible for regulating the securities market and protecting the interests of investors in securities?
A.Reserve Bank of India (RBI)
B.Insurance Regulatory and Development Authority (IRDAI)
C.Securities and Exchange Board of India (SEBI)
D.Insolvency and Bankruptcy Board of India (IBBI)
Explanation: SEBI, established under the SEBI Act, 1992, regulates the securities market, stock exchanges, and intermediaries, and protects investor interests. RBI regulates banking and monetary policy, IRDAI regulates insurance, and IBBI oversees insolvency professionals.
3The principle of natural justice 'audi alteram partem' means:
A.Justice delayed is justice denied
B.Ignorance of law is no excuse
C.No one should be a judge in their own cause
D.Hear the other side before deciding
Explanation: 'Audi alteram partem' means 'hear the other side', requiring that no person be condemned without a fair opportunity to be heard. The other key principle, 'nemo judex in causa sua', means no one should be a judge in their own cause.
4Which Ministry is the nodal authority for administering the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 in India?
A.Ministry of Law and Justice
B.Ministry of Commerce and Industry
C.Ministry of Finance
D.Ministry of Corporate Affairs (MCA)
Explanation: The Ministry of Corporate Affairs administers corporate laws, including the Companies Act, 2013 and the LLP Act, 2008, and oversees the Registrar of Companies. The Ministry of Finance handles fiscal and taxation matters.
5Which of the following is a primary source of law in India?
A.Personal opinions of judges in private
B.Corporate press releases
C.Newspaper editorials
D.Legislation (statutes enacted by Parliament)
Explanation: Legislation enacted by Parliament and State legislatures is a primary source of law in India, along with customs and judicial precedents. Newspaper opinions and press releases have no legal force.
6The Insolvency and Bankruptcy Board of India (IBBI) was established under which legislation?
A.SEBI Act, 1992
B.Reserve Bank of India Act, 1934
C.Companies Act, 2013
D.Insolvency and Bankruptcy Code, 2016
Explanation: The IBBI was established under the Insolvency and Bankruptcy Code, 2016, to regulate insolvency professionals, agencies, and information utilities. It is the key regulator overseeing the insolvency resolution framework in India.
7Which body in India primarily regulates banks and controls the issue of currency and monetary policy?
A.IRDAI
B.Competition Commission of India
C.SEBI
D.Reserve Bank of India
Explanation: The Reserve Bank of India is the central bank that regulates banks, issues currency, and frames monetary policy under the RBI Act, 1934. It is the principal regulator of the banking and payment systems.
8Under Section 2(h) of the Indian Contract Act, 1872, a 'contract' is defined as:
A.A promise without consideration
B.A social or domestic arrangement
C.Any agreement between two persons
D.An agreement enforceable by law
Explanation: Section 2(h) defines a contract as 'an agreement enforceable by law'. Thus, every contract is an agreement, but only those agreements that are legally enforceable become contracts.
9An agreement that is enforceable by law at the option of one party but not at the option of the other is called:
A.Illegal agreement
B.Unenforceable contract
C.Void agreement
D.Voidable contract
Explanation: Under Section 2(i), a voidable contract is enforceable at the option of one party (usually the aggrieved party) but not at the option of the other. This typically arises where consent is caused by coercion, undue influence, fraud, or misrepresentation.
10A proposal, when accepted, becomes a:
A.Promise
B.Consideration
C.Contract automatically
D.Counter-offer
Explanation: Under Section 2(b), when a person to whom the proposal is made signifies assent, the proposal is said to be accepted and becomes a promise. A promise plus consideration and other essentials then form an agreement and, if enforceable, a contract.

About the CA Foundation Business Laws Practice Questions

Verified exam format metadata for ICAI CA Foundation Paper 2: Business Laws is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.