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100+ Free CA Foundation Business Laws Practice Questions

Prepare for the ICAI CA Foundation Paper 2: Business Laws exam with instant access — no signup required.

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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 Exam

ICAI CA Foundation Paper 2: Business Laws is a 100-mark, three-hour subjective paper under the New Scheme 2023 that tests general legal knowledge across the Indian Regulatory Framework, the Indian Contract Act 1872, the Sale of Goods Act 1930, the Indian Partnership Act 1932, the LLP Act 2008, the Companies Act 2013, and the Negotiable Instruments Act 1881.

Assessment

Question count not published by the exam provider

Time Limit

3 hours

Passing Score

40% in the paper and 50% aggregate across all four Foundation papers

Exam Fee

Part of the combined ICAI CA Foundation registration and examination fees; no separate Paper 2 fee is published (Institute of Chartered Accountants of India (ICAI))

CA Foundation Business Laws Exam Content Outline

5-8%

Indian Regulatory Framework

Meaning and sources of law, law-making process, civil, criminal and common law, principles of natural justice, and major regulators such as MCA, SEBI, RBI, IRDAI, and IBBI.

25-30%

The Indian Contract Act, 1872

Essentials of a valid contract, offer and acceptance, consideration, capacity, free consent, void and voidable agreements, performance, breach, damages, indemnity, guarantee, bailment, pledge, and agency.

15-18%

The Sale of Goods Act, 1930

Contract of sale, conditions and warranties, caveat emptor, transfer of ownership and risk, sale by non-owners, unpaid seller's rights, and performance of the contract of sale.

13-16%

The Indian Partnership Act, 1932

Nature and types of partnership, mutual agency, registration and its effects, rights and duties of partners, implied authority, minors, admission, retirement, expulsion, and dissolution.

6-9%

The Limited Liability Partnership Act, 2008

Concept and nature of an LLP, separate legal entity, perpetual succession, designated partners, incorporation, LLP Agreement, limited liability, and distinction from firms and companies.

12-15%

The Companies Act, 2013

Meaning and types of companies, separate legal personality, lifting the corporate veil, Memorandum and Articles of Association, doctrines of ultra vires, constructive notice, and indoor management.

8-12%

The Negotiable Instruments Act, 1881

Promissory notes, bills of exchange and cheques, parties to instruments, negotiation, endorsement, holder and holder in due course, crossing of cheques, presumptions, and dishonour under Section 138.

How to Pass the CA Foundation Business Laws Exam

What You Need to Know

  • Passing score: 40% in the paper and 50% aggregate across all four Foundation papers
  • Assessment: Question count not published by the exam provider
  • Time limit: 3 hours
  • Exam fee: Part of the combined ICAI CA Foundation registration and examination fees; no separate Paper 2 fee is published

Keys to Passing

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

CA Foundation Business Laws Study Tips from Top Performers

1Prioritise the Indian Contract Act, 1872, since it carries the highest weight and underpins concepts used across the other Acts.
2For a subjective paper, practise writing structured answers with the relevant section number, the legal rule, and a brief application.
3Memorise key section numbers and landmark cases such as Mohori Bibee, Salomon, Carlill, and Turquand's rule for quick recall.
4Use MCQ drills to test conceptual clarity, then convert weak topics into full descriptive answer practice.
5Maintain an error log by Act and section to track recurring confusion, such as conditions versus warranties or indemnity versus guarantee.
6Revise the Negotiable Instruments Act provisions on cheque dishonour and Section 138 timelines, which are frequently examined.

Frequently Asked Questions

How many questions are on the CA Foundation Business Laws paper?

Paper 2: Business Laws is a 100-mark subjective (descriptive) paper under the ICAI New Scheme 2023. ICAI does not publish a fixed question count, as the paper uses descriptive questions rather than a set number of MCQs. This free bank provides 100 MCQs to build knowledge across all seven Acts.

What is the passing score for CA Foundation Business Laws?

A candidate must secure a minimum of 40% marks in Paper 2 individually and at least 50% marks in aggregate across all four CA Foundation papers to pass the Foundation examination.

What is the syllabus of CA Foundation Paper 2 Business Laws?

Under the ICAI New Scheme 2023, the syllabus covers seven legislations: the Indian Regulatory Framework, the Indian Contract Act 1872, the Sale of Goods Act 1930, the Indian Partnership Act 1932, the LLP Act 2008, the Companies Act 2013, and the Negotiable Instruments Act 1881.

Which is the most important Act in CA Foundation Business Laws?

The Indian Contract Act, 1872 carries the highest weight in the paper, typically around 25-30% of the marks. It is followed by the Sale of Goods Act, the Indian Partnership Act, and the Companies Act 2013.

How long is the CA Foundation Business Laws exam?

Paper 2: Business Laws is a three-hour paper carrying 100 marks. Under the New Scheme 2023, it is a fully descriptive (subjective) paper conducted at ICAI examination centres.

Is CA Foundation Business Laws an MCQ or subjective paper?

Under the New Scheme 2023, Paper 2: Business Laws is a subjective (descriptive) paper. Papers 3 and 4 are objective MCQ papers with negative marking, but Paper 2 requires written, descriptive answers.

What are the eligibility requirements for CA Foundation?

A candidate can register provisionally after passing Class 10 and can appear in the Foundation examination after appearing in the Class 12 (senior secondary) examination, subject to completing the required study period with the ICAI Board of Studies.

Does ICAI publish a pass rate for Paper 2 Business Laws?

ICAI publishes overall CA Foundation pass percentages by examination attempt but does not release a separate pass rate for Paper 2 Business Laws specifically.