learn

Preference shares or preferred stocks are company stocks which extend dividends to its shareholders. Though such shares extend a fixed dividend, they do not come with any voting rights. Notably, a company often issues different types of preference shares which are distinct in their features and associated benefits. What are Preference Shares? Preference shares or preferred stocks come with a preferential right when it comes to the distribution of dividends or during the liquidation of a company. It means, in both situations, preference shareholders are given more priority than other shareholders. Typically, preference shares are released to raise capital for the company, which in turn is known as preference share capital. It must be noted that preferred stockholders are partial owners of a company, but unlike common shares, preferred shares do not come with any voting rights. However, shareholders’ opinions may be taken into consideration during dissolution or altering the functions of an existing venture. Notably, the decision to announce dividends on preference shares lies entirely on the company’s management. Experienced investors and those who wish to stay invested in the market for a long time, find this share suitable. The fact that preference shares generate substantial earnings makes it a viable option for risk-takers. Types of Preference Shares Cumulative Preference Shares Holders of cumulative preference shares are entitled to receive the divided for a year in which dividends could not be paid due to losses or inadequate profit in the subsequent year(s) whenever there are sufficient profits. Non-Cumulative Preference Shares Holders of non-cumulative preference shares are NOT entitled to receive the dividend for a year in which dividends could not be paid in the subsequent year(s). Therefore, for non-cumulative preference shares, the right to dividend for a year cannot be carried over in subsequent years. Participating Preference Shares Participating preference shares are eligible to receive surplus profit or dividends in the company, in addition to being entitled for fixed dividend. Non-participating Preference Shares Non-participating preference shares are those shares that are not entitled to participate in surplus profits of the company. Non-participating preference shares are only entitled to fixed dividend payments. Redeemable Preference Shares Redeemable preference shares are those shares that would be redeemed by the company within a period of 20 years from the date of issue. Irredeemable Preference Shares Irredeemable preference shares are those preference shares that would NOT be redeemed by a company. Companies in India are not allowed to issue irredeemable preference shares. Convertible Preference Shares Convertible preference shares can be converted into equity shares of the company as per the terms and conditions of their issue. Non-convertible Preference Shares Non-convertible preference shares are not convertible into equity shares of the company but still have preferential rights to payment of capital in the event of winding up of the company. Issuing Preference Shares in a Private Limited Company A private limited company or limited company having share capital may issue preference shares, if authorized by the articles of association of the company, subject to the following conditions: The issue of preference shares by the company is authorized by passing a special resolution in a general meeting of the company; AND The company, at the time of such issue of preference shares, has not defaulted in the redemption of preference shares issued either before or after the commencement or in payment of dividend due on any preference shares. In addition to the above, the company issuing preference shares must set out in the articles of association of the company, the following regulations: Priority of preference shares with respect to dividend payment and repayment of capital over equity shares; Participation in surplus funds of the company; Participation in surplus assets and profits, on winding up of the company; Payment of dividend on cumulative or non-cumulative basis; Conversion of preference shares into equity shares; Voting rights of the preference shares; Redemption of preference shares; Difference Between Equity Shares and Preference Shares This table highlights the basic differences between equity shares and preference shares. Parameter Preference Share Equity Share Definition It offers preferential rights in terms of receiving dividend or capital amount. It represents shareholders’ ownership in a company. Rate of dividend Dividend payout’s rate is fixed. Dividend payout’s rate fluctuates with more earnings. Dividend payout Preferred stockholders are given more priority over common stockholders during dividend payment. Shareholders avail dividend only after other liabilities have been paid. Bonus shares Shareholders may receive bonus shares against current shareholdings. Shareholders may receive bonus shares against their shareholdings. Capital repayment Capital repayment is made before equity shares. Capital is repaid at the end. Voting rights Shareholders do not enjoy voting rights. Shareholders avail voting rights. Participation in management Shares do not come with management rights. Equity share allows shareholders to partake in company management. Convertibility Preferred stocks can be converted. Equity stocks cannot be converted. Arrears of dividend Shareholders may receive a cumulative dividend. Shareholders are not entitled to avail cumulative dividends. Types Preference shares and its types include, convertible, non-convertible, participatory, non-participatory, cumulative, non-cumulative, etc. They are simply classified as ordinary or common stock of a company. Issuance It is not mandatory to issue preference shares. Companies must issue equity shares. Suitability It is considered suitable for investors with low risk-taking capacity. It is considered for investors who can take risks. FAQs What is redeemable and non-redeemable preference shares? The redeemable preference shares are repurchased at a fixed rate on a certain fixed date or by an advanced announcement. On the other hand, non-redeemable preference shares cannot be redeemed or repaid during the company’s operational lifespan. What is the meaning of cumulative and non-cumulative preference shares? A cumulative preference share entitles an investor to dividends that were missed previously. While a non-cumulative preference share doesn’t provide investors to avail of any dividends that were missed earlier.

The primary objective of the revisions made to the Companies Act 1956 was to have a simplified law that will be able to address the changes taking place in the national and international scenario, enable the adoption of internationally accepted best practices and also provide flexibility in response to the ever-changing business models. One such aspect which was introduced in the Companies Act 2013 was the concept of Dormant Companies in section 455 of this act. In common parlance, the word “Dormant” means inactive or inoperative. A dormant company is an excellent opportunity to start a company for a future project or hold an asset/intellectual property without having significant accounting transactions. On the other hand if a company has not filed its annual returns for two consecutive years then such a company will also be called as a dormant company. Significant accounting transactions would mean transactions other than the basic procedural transactions i.e the payment of fees by a company to the Registrar and also payments to fulfil the requirements of this Act or any other law, allotment of shares to fulfil the requirements of this Act and payments for maintenance of its office and records.  Concept of Dormant Company A dormant company under Section 455 of the Companies Act 2013 is a registered entity that is inactive with no significant accounting transactions, existing for holding an asset, intellectual property, or for a future project, and has applied to the Registrar to obtain dormant status and successfully obtained the status of Dormant Company. A dormant company may either be a public company or a private company or a one person company (OPC). Invest now shine later serves as a core policy of dormant companies. The companies are in a position to hold assets or intellectual property and use it later and why would they do this? Cost Advantage is the reason for it. Well, the restart is always better than a fresh start and dormant companies offer this advantage. So if a company chooses to take a backseat for a good reason then they can always restart when they want to, without further procedures subject to certain conditions. The longer you exist the greater you are valued. So as a dormant company, the company may not be active but it still has a status of a company in the eyes of law. Procedural Formalities to get the Status of a Dormant Company There should have been no inspection, inquiry or investigation ordered/taken up/carried out against the company nor any prosecution initiated/pending against the company under any law. The company should have no outstanding deposits nor should have defaulted in payment of the amount or interest. The company should not have any outstanding loan, whether secured or unsecured.The company may apply under this rule after obtaining the concurrence of the lender and enclosing the same with Form MSC-1 There should be no dispute in the management or ownership of the company and a certificate in this regard is enclosed with Form MSC-1 The company should not have any outstanding statutory taxes, dues, duties etc. payable to the Central Government/State Government / local authorities etc.and also not defaulted in the payment of workmen’s dues; The securities of the company should not be listed on any stock exchange within or outside India. Special provisions applicable to a dormant company Directors Minimum number of directors: Public Company:3 Private Company:2 One Person Company:1 Rotation of auditors Not applicable Return of Dormant Company-MSC-3 Financial position duly audited by a chartered accountant should be filed within 30 days from the end of financial year Return of allotment and change in directors As specified in the act COMPLIANCES FOR DORMANT COMPANY 1) Company needs to have minimum number director as required by Companies Act, 2013 i.e. at least 3 Directors in case of a Public Company, 2 for Private Company and 1 for OPC. 2) The company shall continue to file the returns of allotment and change in directors, whenever the company allots any security to any person or there is any change in the directors of the company. 3) The Dormant Company is required to hold at least one meeting of the Board of Directors in every half year. The gap between two meetings shall not be more than 90 days. 4) The maximum tenure for which a company can remain dormant is 5 consecutive financial years. If a company remains dormant for more than 5 years, the Registrar commences the process of striking off the name of the company from the Records, i.e. the company will be removed. 5) A dormant company is required to file a “Return of Dormant Company” in Form MSC-3 annually, interalia, indicating financial position duly audited by a Chartered Accountant in Practice along with such annual fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 within a period of thirty days from the end of each financial year. 6) No need not enclose cash flow statements in its annual accounts. 7) The provisions of the Act in relation to the rotation of auditors are not applicable to dormant companies. Reactivation of a Dormant Company In order to move from red(inactive) to green(active) the company will have to: File form MSC-4 File MSC-3 And pay a prescribed fee Further, Once the above points are done, the Registrar will issue the fcertificate in form MSC-5 allowing the status of an active company. In some cases, If the registrar has a reason to believe that the company that has applied for the dormant company status has been actually functioning, after completing enquiry and also after giving the company a reasonable opportunity to be heard, may treat the company as an active one. If the company fails to comply with anything mentioned under the grounds of the application for status of the Dormant company, then the directors shall apply for obtaining the status of an active company within 7 days Eligibility i.Any inspection, inquiry or investigation has been ordered or taken up or carried out against

Ease of Doing Business Portal has been launched by the Ease of Doing Business Department of Assam from June 17, 2019.  Dept of Labour & Welfare -Inspectorate of Factories Dept of Revenue & Disaster Management. Dept of Health & Family Welfare Commissionerate of Food Safety. In addition to these departments, Single Window Agency under Department of Commerce and Industry has also been moved to the new portal. Application for Re-Classification of Land / Conversion of Land can be filed through the portal Online Services Department of Industries & Commerce Department of Labour Welfare Department of Home and Political Department of Urban Development Department of Guwahati Development Department of Environment & Forest Department of Revenue and Disaster Management Department of Education Department of Co-operation Department of Finance Department of Power Department of Health & Family Welfare Department of Mines and Minerals Department of Tourism Department of Excise Department of Food, Civil Supplies & Consumer Affairs Department of Public Works Department of Agriculture Judicial Department Applicability Proprietorship Partnership firm Limited Liability Partnership Private Limited Company Cooperative society Society Association of persons Trust Club Hindu Undivided Family Public Sector Undertaking Advantages of Ease Of Doing Business In Assam Portal Ease of Doing Business in Assam encourages economies to compete towards more efficient regulation; it looks at the domestic small and medium-size companies and measures the regulations applying to them through their life cycle. The government of Assam provides guidance and help the entrepreneur to set up the Industry in the State of Assam via Ease Of Doing Business In Assam Portal. Documents Required Board Resolution/Authorised Letter Proof of Identity Proof of Address PAN Card of the enterprise Procedure to Create a User ID Step 1: Access the home page of Ease of Doing Business In Assam Portal and select the Login option from the home page. Step 2: Select the Signup option for new user registration in this single window portal. Step 3: The new user registration page will be displayed. Verify the PAN of your Company or Proprietor. Enter the following details for user registration: Name (No Special Character will be accepted) Mail Id Mobile Number User Name Password Step 4: After furnishing the details, submit the application form for new user registration. Step 5: A small window will be displayed, enter the six-digit OTP you have received in the mobile number and enter the verification code that you have received in the email ID. Step 6: By clicking on the submit button, the User ID will be created Whenever you want to apply online login to EODB portal with this User ID and Password. Business Plan Approval Government business plan approvals are required for establishing the Industry / Enterprise in the State of Assam. All approvals have been divided into two primary stages of Business Enterprise as given below: Pre-Establishment Approvals which are prerequisite to starting the business Pre-Operation Approvals which are essentially needed before you commence the operation of the business Note: For more specific approvals, please email to [email protected] with the business details. Visit the official webpage of Ease Of Doing Business In Assam, select the EODB menu and click on “Know your Approvals” option. In the new page, select the following details from the drop-down menu Type of activity, Manufacturing, Service Sector, Subsector and Business/Industry. On successful selection, the list of Approvals will be displayed. By clicking on the respective department, you can apply for approvals in Ease of doing business in Assam Portal. FAQs What is the Ease of Doing Business in Assam Portal? The Ease of Doing Business (EoDB) in Assam Portal is a government initiative aimed at simplifying and streamlining the processes for starting and running a business in Assam. It provides a single-window platform where businesses can access various services, approvals, and licenses, ensuring transparency and reducing procedural delays. What are the key objectives of the Ease of Doing Business Portal? To provide a user-friendly platform for businesses to obtain approvals and clearances. To reduce administrative bottlenecks and promote online application processes. To enhance transparency and accountability in government procedures. To facilitate investment and attract businesses to Assam by offering a simplified regulatory environment.

Futures and options are the major types of stock derivatives trading in a share market. These are contracts signed by two parties for trading a stock asset at a predetermined price on a later date. Such contracts try to hedge market risks involved in stock market trading by locking in the price beforehand. Future and options in the share market are contracts which derive their price from an underlying asset (known as underlying), such as shares, stock market indices, commodities, ETFs, and more. Futures and options basics provide individuals to reduce future risk with their investment through pre-determined prices. However, since a direction of price movements cannot be predicted, it can cause substantial profits or losses if a market prediction is inaccurate. Typically, individuals well versed with the operations of a stock market primarily participate in such trades. What is F&O (Futures and Options)? Futures and options are financial derivatives that allow traders to speculate on the price movements of an underlying asset without actually owning it. Futures contracts obligate the buyer to purchase an underlying asset, while the seller must deliver it at a predetermined price and date. In options contracts, the buyer has the right, but not the obligation, to buy or sell the underlying asset at a predetermined price and date, while the seller must honour the contract if the buyer chooses to exercise their option. Futures and options trading can be complex and involve significant risk. The value of these derivatives can be affected by various factors, including market volatility, changes in interest rates, and fluctuations in currency exchange rates. Traders may face substantial losses if their positions move against them. Difference between Futures and Options Future and option trading are different in terms of obligations imposed on individuals. While futures act a liability on an investor, requiring him/her to follow up on a contract by a pre-set due date, an options contract gives an individual the right to do so. A futures contract to buy/sell underlying security has to be followed up on the predetermined date at a contractual price. On the other hand, an options contract provides a buyer with a choice to do the same, if he/she profits from a trade. Types of Futures and Options While futures contract holds the same rules for both buyers and sellers of a contract, an options derivative can be divided into two types. Individuals entering an options contract to sell a particular asset at a pre-asserted price on a future date can do so by signing a put option contract. Similarly, individuals aiming to purchase a particular asset in the future can enter into a call option to lock in the price for future exchange. Who Should Invest in Futures and Options? Traders engaging in future and option trading can be classified into the following types. Hedgers Such individuals enter into futures and options contracts in the share market to reduce investment volatility concerning price changes. Locking in a price for transaction at a future date helps individuals realise relative gains if the price moves adversely with respect to a trading position assumed by a buyer. However, in case of a favourable fluctuation, individuals entering into a futures contract can incur significant losses. Such risk is mitigated in an options contract, as an investor can pull out of a deal in case of favourable price swings. Hedgers aim to secure their gains or expenditures in the future by entering into a derivative contract. Such traders are popular in the commodity market, wherein individuals try to secure an expected price of a particular item for a successful exchange. Understand it with the help of a future and option trading example. A farmer can enter into a futures contract with a wholesaler to sell 50 kg of potato for Rs. 20 per kg three months from the current date. On the day of maturity, if the price of potatoes falls below that level, the farmer successfully hedged his position to minimise the overall risk associated with trading in the future. However, in case of a price rise in the potato market, a farmer stands to lose out on profits. Such losses can be offset through a put option contract, which gives the farmer a right but not an obligation to meet the conditions of a contract. In case of a fall in the market price level, he/she can execute the options contract to ensure negligible losses. Price rise on the other hand, allows the farmer to withdraw from the contract and sell the items in the marketplace at the prevailing price. Hedgers primarily opt for physical trade wherein the asset is exchanged upon maturity of the contract. It is particularly popular in the commodity market, wherein physical trade is undertaken by producers and companies to keep the cost of raw materials at a fixed level. It ensures stability in the price levels in an economy. Speculators  Speculators predict the direction of price movement in a market as per an intrinsic valuation and economic condition and choose to take an opposite stance in the present to gain from such price fluctuations. Taking a futures and options example, if an investor predicts the price to increase in the future, he/she can assume a short position in the derivatives market. It indicates a purchase of a stock/derivative in the present to sell it on a later date, at a higher price. Subsequently, a long position is undertaken by individuals expecting the prices to fall in the future as per their market analysis. Investors plan on buying securities in the future at a reduced price through such contracts, to profit in relative terms. Most speculators engaging in derivatives trading aim to opt for cash settlement, wherein the physical transfer of an asset is not conducted. On the contrary, a difference between spot price (current market price) and the price quoted to the derivative is settled between two parties, thereby reducing the hassles of such trade. Arbitrageurs Arbitrageurs aim to profit from price differences

Silpa Sathi, established by the West Bengal Corporation Ltd. (WBIDCL), is a singular digital portal facilitating seamless access to essential services governed by applicable rules. Serving as a digital gateway, it aids investors in obtaining necessary services for establishing and operating businesses within the state.  Features of Silpa Sathi Online submission of the application for grant or issue of permissions, approvals, certificates, enrolments, registrations, licenses, allotments, consents, no objection certificates and the like including incentives, by any Department or Organization of the Government including local bodies to set up and operate a business Online payment of fees Online approval, tracking of the real-time status of application and issuance of the certificate(s) Notification alert to applicants through SMS/ e-mail notification as and when the form is submitted and the query is raised and/, or application is approved/ rejected. Automated SMS/ e-mail notification to the respective Head of Competent Authorities with status information on the applications in which clearances are likely to breach the stipulated time frame specified in the West Bengal Right to Public Services Act. Purpose and Objectives In a dynamic era of digital transformation, the West Bengal government has pioneered the Silpa Sathi Portal, a revolutionary platform designed to empower entrepreneurs and businesses. The portal, launched with a specific set of objectives, aims to streamline various processes, foster economic growth, and catalyze entrepreneurship across the state. Initiating Body/Authority The driving force behind the Silpa Sathi Portal is the West Bengal Industrial Development Corporation (WBIDC), an instrumental authority committed to propelling industrialization and economic development in the state. This visionary initiative aligns with WBIDC’s mission to create a business-friendly environment and stimulate investment. Key Functionalities Include Business Registration: Streamlined processes for entrepreneurs to register their businesses hassle-free. Information Hub: A centralised repository of business-related information, guidelines, and resources. Financial Assistance Programs: Access to various government schemes and financial aid for eligible businesses. Networking Opportunities: Facilitation of networking events, collaborations, and partnerships within the business community Benefits and Impact Economic Growth and Job Creation The Silpa Sathi Portal plays a pivotal role in propelling economic growth within West Bengal. By facilitating business establishment and expansion, the portal contributes to job creation and increased economic output. Small businesses, in particular, stand to benefit significantly from the streamlined processes and financial aid programs. Improved Business Environment One of the key impacts of the Silpa Sathi Portal is the creation of a conducive business environment. The simplified registration processes, coupled with easy access to information and resources, reduce bureaucratic hurdles. This, in turn, fosters a more favorable climate for businesses to thrive. Enhanced Competitiveness Businesses that leverage the Silpa Sathi Portal gain a competitive edge. The platform provides insights into market trends, connects businesses with potential partners, and offers financial support to enhance competitiveness. By fostering collaboration and innovation, the portal positions West Bengal businesses on a trajectory of sustained growth. Eligibility Criteria To harness the benefits of the West Bengal Silpa Sathi Portal, businesses must adhere to specific eligibility criteria. Typically, eligibility revolves around the nature of the business, its scale, and its alignment with the state’s economic development objectives. Startups, small and medium-sized enterprises (SMEs), and large enterprises may have different criteria tailored to their respective needs. West Bengal Silpa Sathi Portal Registration Process Step 1: Visit the Silpa Sathi Portal to access the desired online services. Step 2: Click “Apply Online” to open the Silpa Sathi single-window portal. Step 3: Click the “Click Here” hyperlink to open the Sign-Up Page. Step 4: Ensure the username is under 10 characters and unique. Step 5: Create a password with one numeric, one uppercase, one lowercase, and a minimum of 8 characters. Step 6: Confirm that the password matches. Step 7: Provide a unique email ID and mobile number. Step 8: Complete all details and click the register button. Step 9: Upon registration, Silpa Sathi will display a message stating, “Email has been sent to” the registered email ID. Step 10: Check your email for a validation message and click “Click here to validate the account.” Step 11: Upon successful validation, the message “User Validate Successful” will appear. Users can then log in using the registered username and password. FAQs How does the Silpa Sathi Portal plan for future developments and improvements? The Silpa Sathi Portal adopts a forward-thinking approach, planning future developments through technological upgrades, expanded services, and regional outreach. Regular assessments of user feedback and evolving business needs guide ongoing improvements and enhancements. What are the primary advantages or benefits of utilising the Silpa Sathi Portal for entrepreneurs and businesses? The Silpa Sathi Portal offers advantages such as streamlined registration, access to financial aid, expert guidance, and networking opportunities. It creates a conducive environment for businesses to thrive, fostering competitiveness, growth, and innovation.

The National Pension System or NPS is a measure to introduce a degree of financial stability for Indian citizens after they have retired. It was previously known as the National Pension Scheme. Anyone over the age of 60 is eligible to use the amount gathered in the pension corpus. You will need an NPS calculator to determine how much the total accumulation amounts to. Any resident of the country who is between 18 and 60 years of age is eligible to build up a pension corpus. It is an investment and an asset after retirement. Since most people in India have private jobs with little security, they need a National Pension Scheme calculator. Pension schemes in the country are not market-linked instruments and earn sound returns. What is the NPS Calculator? One tool that can help you determine the returns on your NPS investments is an NPS calculator. You can provide a few simple details to get an idea of the retirement corpus you can accumulate over time. You can use the NPS calculator to see how much of a tax-free lump sum payment and how much lifetime pension income you will receive from NPS investments if you begin investing in NPS right now. You may also see how much money you might save on taxes by investing in NPS using the NPS calculator. This is by Income Tax Act sections 80CCD(1) and 80CCD(1B). Moreover, you pay no capital gains tax on the lump sum you withdraw from retirement, and your retirement corpus is tax-free.  Formula for calculating Pension amounts NPS, like all pension schemes around the world, uses compounding interest to calculate returns. The formula that the National Pension Scheme calculator India uses is: A = P (1 + r/n) ^ nt In the equation, the amount is A. The other variables are the following. P Principal sum R/r Rate of interest per annum N/n Number of times interest compounds T/t Total tenure An example of how pension aggregates is essential here. If you are 34 years old and your monthly contribution is Rs 3000, you will need to add to the pension account for 26 more years. Assuming that the rate of interest or ROI is expected at 10% every year, the following are the details the National Pension Plan calculator offers. Total Principal invested= Rs 9.36 Lakh Sum expected on Maturity = 44.35 Lakh How Does the NPS Calculator Work? You can see your overall gains, the predicted future value of your retirement corpus, and the total amount invested using the NPS calculator. It will also display the maximum tax-free lump sum withdrawal you can take out at retirement (60%) and the monthly pension income you will receive for the remainder of your life. After you pass away, 40% of the NPS corpus goes to your nominee. Illustration on NPS Calculation Consider an example to elucidate how the NPS calculator computes the monthly pension. Mr A, a 21-year-old central government employee, participates in the National Pension Scheme. He opts to contribute Rs 3,600 monthly towards the scheme. The NPS matures upon reaching 60 years of age for the subscriber. Accordingly, Mr A will contribute for the subsequent 39 years until the scheme’s maturity. Mr. A anticipates an annual return on investment (ROI) of 8%. Additionally, he intends to allocate 40% toward purchasing an annuity with an expected return rate of 6%. Upon retirement, the NPS calculator projects the status of Mr. A’s pension account. The total investment made by Mr A throughout the period amounts to ₹ 16,41,600. The projected corpus generated at retirement stands at ₹ 1,07,06,420. Additionally, the calculator provides a summary of Mr. A’s pension account. The lump sum value of the corpus at retirement is calculated to be ₹ 64,23,852. Furthermore, the estimated monthly pension Mr A can expect to receive amounts to ₹21,413. FAQs What is an NPS Calculator? An NPS Calculator is an online tool designed to help individuals estimate the corpus they can accumulate at retirement and the potential monthly pension they can receive under the National Pension System (NPS). By entering basic details like investment amount, tenure, and expected returns, users can calculate the expected retirement savings and monthly pension. How does the NPS Calculator work? Investment amount (contribution): The monthly or yearly contributions made by the individual. Investment tenure: The period over which contributions are made (typically until retirement). Rate of return: The expected annual rate of return on the NPS investments. Annuity purchase percentage: The portion of the NPS corpus that will be used to buy an annuity, which provides monthly pension. Annuity rate: The expected rate of return on the annuity purchased.

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company. Making capital expenditures on fixed assets can include repairing a roof if the useful life of the roof is extended, purchasing a piece of equipment, or building a new factory. What is CapEx? CapEx is the funds a company uses to acquire, maintain and update its physical assets. It can use them to invest in projects on fixed assets, like repairing a roof or purchasing additional equipment. These expenses typically are tangible items, though they can be intangible, like a patent, trademark or copyright. Companies consider capital expenditures as assets because they can sell them. The main goal of capital expenditure is to increase operations, add revenue or give another economic benefit from the spending. Most accounting and financial roles in commercial businesses involve monitoring and calculating capital expenditures.Capital expenditures may require approval from shareholders or a board of directors before the company uses them. An expense generally is a capital expenditure item when the asset or investment has a lifespan greater than one year. In record-keeping, you place it on the balance sheet instead of expensing it on the income statement when calculating financial reports. Cash flow statements and investing activity documents can also include capital expenditure figures. Some industries, such as utilities, manufacturing, telecommunications and oil and gas, focus more on capital expenditures than others. What’s the importance of calculating capital expenditure? Capital expenditure helps show how much a company is investing in its fixed assets, and the figure often covers the lifetime of an asset. Investors and financial analysts often review cash flow statements to analyze the expenditure values through acquisitions, capital spending or purchasing property, plant and equipment (PP&E). Calculating capital expenditure also helps in reviewing a company’s spending using the balance sheet’s depreciation expense section.To assess overall business performance, you can subtract the capital expenditures amount from operating expenses to determine the free cash flow for a company, which is the amount of cash a business gas after accounting for capital expenditures and operating expenses. Here’s the formula for calculating capital expenditure: CapEx = current PP&E – previous PP&E + current depreciation Types of Capital Expenditures There are normally two forms of capital expenditures. These expenses can be both tangible (machine) and intangible (patent) Expenses for fostering an increase in a company’s future growth Expenses for maintaining present operating levels. Importance of Capital Expenditures in Business CapEx is often used to undertake new projects or investments by a company, smart capital expenditures help businesses grow. From a long-term financial planning perspective, CapEx analysis helps leaders understand whether an asset offers an attractive rate of return. That way, companies can balance maintaining existing equipment and property with having enough capital to invest in growth. Other important considerations include: Initial costs: Depending on the industry, capital expenditures are generally more expensive than acquiring the use of the same asset on an operating basis. Think purchasing a fleet vehicle versus leasing or signing on a contract delivery service. It’s crucial to understand the long-term benefits of owning an asset. Irreversibility: A company will most likely incur losses when undoing a capital expenditure. That’s because the market for capital equipment tends to be poor, which means acquired assets are likely better off used by the company itself. Depreciation: Once an asset is being put to use, depreciation begins and may lead to a decrease in an organization’s asset accounts. Operating Expense vs. Capital Expense Operating expense (OpEx) An operating expense (OpEx) is an expense required for the day-to-day functioning of a business. This means a business incurs an operating expense on a recurring basis. Operating expenses include things like insurance, payroll, and marketing. A capital expense (CapEx) Capital expense (CapEx), on the other hand, is incurred to create a benefit in the future. They are long-term in nature and are generally used to acquire things like property, equipment, and technology.   Capital expenditure Operating expenditure Purpose Assets meant to benefit the business for more than one year Costs to run day-to-day operations Listed as Equipment or property Operating cost When it is accounted for Depreciated over the asset’s useful life (in years) Current month or year FAQs What Type of Investment Is CapEx? CapEx is the investments that a company makes to grow or maintain its business operations. Capital expenditures are less predictable than operating expenses that recur consistently from year to year. A company that buys expensive new equipment would account for that investment as a capital expenditure. It would therefore depreciate the cost of the equipment throughout its useful life.  What Is an Example of CapEx? The purchase is often capitalized and treated as CapEx when a company acquires a vehicle to add to its fleet. The cost of the vehicle is depreciated over its useful life and the acquisition is initially recorded on the company’s balance sheet. This is treated differently than OpEx, such as the cost to fill up the vehicle’s gas tank. The tank of gas has a much shorter useful life to the company so it’s expensed immediately and treated as OpEx.

A partnership is a kind of business where a formal agreement between two or more people is made. They agree to be co-owners, distribute responsibilities for running an organisation and share the income or losses that the business generates. These features of partnerships are documented in a document which is known as partnership deed. What is a Partnership Deed? Partnership deed is a partnership agreement between the partners of the firm which outlines the terms and conditions of the partnership between the partners. The purpose of a partnership deed is to provide clear understanding of the roles of each partner, which ensures smooth running of the operations of the firm. The Partnership comes into the limelight when: There is an outcome of agreement among the partners. The agreement can be either in written or oral form. The Partnership Act does not demand that the agreement has to be in writing. Wherever it is in the form of writing, the document, which comprises terms of the agreement is called ‘Partnership Deed.’ It usually comprises the attributes about all the characteristics influencing the association between the partners counting the aim of trade, the contribution of capital by each partner, the ratio in which the gains and losses will be divided by the partners and privilege and entitlement of partners to interest on loan, interest on capital, etc,   Importance of a Partnership Deed It helps partners to define the terms of their relationship. It regulates the nature of business and liabilities, rights and duties of all partners. It helps to avoid misunderstandings between the partners since all of the terms and conditions of the partnership are specified in the deed.  In the case of a dispute amongst the partners, it will be settled as per the terms of the partnership deed. There will be no confusion between the partners regarding the profit and loss sharing ratio amongst them.   It mentions the role of each individual partner. It contains the remuneration that is to be paid to partners, thereby avoiding any dispute or confusion.  It ensure smooth functioning of the firm as the terms and liabilities between partners are in a written form. Types of Partnership Deeds General Partnership Deed: The general partnership deed contains the terms and conditions of a general partnership, where each partner shares equal responsibility for the management of the firm business and are jointly liable for debts or obligations. Limited Partnership Deed: The limited partnership deed establishes a limited partnership, which includes general and limited partners. The general partners have unlimited liability for the debts of the partnership firm, while the limited partners have limited liability and do not participate actively in the management of the business. Contents of a Partnership Deed The partnership deed contains the following details: Name of the firm The partners of the firm should decide the firm’s name which adheres to the provisions of the Partnership Act. The firm name is the name under which the business is conducted. Details of the partners  The deed should include details of all the partners, such as their names, addresses, contact number, designation, and other particulars. Business of the firm  The deed should mention the business that the firm undertakes. It may be dealing with producing goods or rendering services. Duration of firm  The deed should mention the duration of the partnership firm, i.e. if the firm is constituted for a limited period, for a specific project or for an unlimited period. Place of business  The deed should contain the principal place of business where it carries on the partnership business. It should also mention the names of any other places where it conducts business.  Capital contribution Each partner will contribute an amount of capital to the firm. The entire capital of the firm and the share contributed by each partner are to be mentioned in the deed. Sharing of profit/loss  The ratio of sharing profits and losses of the firm amongst partners should be noted in the deed. It can be shared equally amongst all partners, or according to the capital contribution ratio or any other agreed ratio.  Salary and commission The details of the salary and commission payable to partners should be mentioned in the deed. The salary and commission can be paid to the partners based on their role, capabilities or any other capacity. Partner’s drawings The drawings from the firm allowed to each partner and interest to be paid to the firm on such drawings, if any should be mentioned in the deed. Partner’s loan  The deed should mention whether the business can borrow loans, the interest rate of loans, properties to be pledged, etc. It can also mention if a partner of the firm can borrow loans from the business or not. Duties and obligations of partners  The rights, duties and obligations of all the partners of the firm should be mentioned in the deed to avoid future disputes.  Admission, death and retirement of partners The deed should mention the date of admission of the partner, the regulations governing the admission of a new partner, resignation, or changes after the death of a partner of the firm. Accounts and audit  The deed should contain details about the audit procedure of the firm. It should mention the details of how the partnership accounts are to be prepared and maintained.  Documents Required for Partnership Deed Registration PAN card of all the partners. Address proof of all the partners, such as voter ID, Aadhar card, driving licence, etc. Address proof of the firm Partnership Deed Registration The partnership deed is registered under the Indian Registration Act, 1908. It must be printed on non-judicial stamp paper with a value of Rs.200 or more based on the capital of the partnership firm. It has to be signed by all the partners and each partner should have a copy of the partnership deed. After the deed is signed by the partners, it must be registered with the Sub-Registrar/ Registrar Office of the jurisdiction where the partnership firm is located. The stamp duty for registering the partnership

Mutation is the process through which the name entry is changed in the government records once a property has been transferred in the name of a new owner. Land and property mutation helps the local authority to fix property tax liability and charge it accordingly. Land Mutation Mutation of land is the change of title ownership from one person to another when a property is sold or transferred. By mutating a property or land, the new owner gets the title of the property recorded on his/her name in the land revenue records of the local municipal corporation, and the government of Uttar Pradesh can charge property tax from the rightful owner. The change in title ownership that occur due to the reasons such as the death of the original owner and following transfer of the owner due to inheritance or succession Importance of Property Mutation Mutating a property is a mandatory process in all legal transactions involving property. Mutation becomes essential for deciding the tax liability when the property ownership gets changed. One needs to get mutation done and get the new owner details updated in the revenue records maintained by civic bodies like Municipalities, Panchayats or Municipal Corporations. Through mutation of land, a person can acquire the rights of the land.  To avoid the controversy over the ownership of the land, the mutation is worked out by both the parties, i.e. buyer and seller. Concerned Authority The parties can approach the Offices of the concerned Revenue Inspector and submit the application forms relating to Mutation of the property at the Gram Panchayat level or in the Office of the relevant Block Land and Land Reforms Officer at the Panchayat Samiti level or in the office of district magistrate of particular block or district. Documents Required for Mutation Process Death certificate Copy of Succession Certificate Affidavit on stamp paper Up-to-date property tax payment receipt in case of Power of Attorney Copy of Power of Attorney Application for mutation with stamp affixed Registration deeds (Both current & previous) Sale deeds Affidavit on stamp paper of requisite value Receipt of current property tax payment Ration Card Aadhaar Card The below are the respective documents to be enclosed for Mutation in case of sale of a property along with the application form. Application for mutation with stamp affixed Registration deeds (Both current & previous) Sale deeds Affidavit on stamp paper of requisite value  Up-to-date property tax payment receipt Ration Card Aadhaar Card Property Mutation Application Procedure In Uttar Pradesh, the applicants must follow the following steps to apply for the land mutation by submitting the application form offline. Step 1: The applicant can visit the nearest responsible block or sub-registrar office for the complete registration process of the mutation. Step 2: You have to get the application form from the concerned office and have to fill out an application form in a prescribed format. Step 3: You have to fill the mutation application form with requested details without any mistakes.  Provide the details such as old owner details, new owner details and also mention the cause of mutation. Step 4: You have to submit the application form in the prescribed format to the concerned operator along with all the supporting documents. Step 5: After applying, you have to attach the specified documents along with the application form. Step 6: Sub-registrar officer will forward the request for a Mutation certificate online to the concerned authority. Step 7: The concerned Department will process the mutation request, and after successful verification, the authorised Government Officer will issue the mutation document. n Uttar Pradesh, the applicants must follow the following steps to apply for the land mutation by submitting the application form online. Step 1: The applicants have to go to the official e-NagarSewa Portal of Uttar Pradesh to apply for the land mutation online. Step 2: You have to click on the “Online Mutation” tab that is visible on the home page. Step 3: Then you will be taken to the Online Facility page where you have click on the Apply button. Step 4: After that, the citizen log in page will be displayed. In case if you’re a new user, then you will have to register yourself with the portal by clicking on the ‘Register’ option to avail the services. Step 5: Upon clicking on the register button, the citizen’s registration page  Step 6: Then you have to fill out all the mandatory details such as the applicant’s name, applicant’s address, mobile number and e-mail address. Then you must create a password and enter the captcha text image. After that, click on the “Submit” button. Step 7: Once you got registered with the portal, log in to the portal using your user id and user password. Step 8: You have to make a request with the ULB (Urban Local Body) for a New Property Mutation. There are two types of cases to search for mutation details: Case 1: Registered Property in the E-Nagarsewa portal You can verify your property details by entering your property ID or else you can search for the property. Case 2: Property is not in the E-Nagarsewa portal In this case, you have to search the property at the particular ULB website. Step 9: Enter your property ID and click on the ‘Show Property Detail’ Step 10: Then you have to click on the Add mutation application form a click on the ‘save record’ button. Step 11: You have to fill out all the requested details such as old owner details and new owner details. Step 12: You have to select the cause for mutation from the following drop-down list: Due to Death of Recorded Owner Due to a Registered Sale Deed Will Deed Registered Gift Deed Family Settlement By Order of Court Hibba   Step 13: Fill in the details further in the application form and upload the requisite/mandatory documents and submit the application. Step 14: After uploading all the requested documents (scanned documents), click on the “Save Record” button. Step 15: The payment for mutation is dependent at the ULB based on the cause of mutation that you have mentioned. Step 16: Now you

TDS (Tax Deducted at Source) means collection of taxes by the Indian government at the source of income. TDS is applicable on various income like salary, rent, dividend, asset sales etc. TDS (Tax Deducted at Source) is an important part of Income Tax compliance. TDS has to be deducted at the rates prescribed by the tax department. Below you’ll find the TDS rate chart, which summarises all the TDS provisions of the Income Tax Act. Budget 2024 introduces reductions in the TDS rates for specific payments to foster business operations and improve compliance among taxpayers. These changes are set to take effect on either October 1, 2024 or April 1, 2025. Budget 2024: Rationalization of TDS Rates Section Current TDS Rate New TDS Rates Effective Date Section 194H – Payment of commission or brokerage 5% 2% October 1, 2024 Section 194-IB – Payment of rent by certain individuals or HUF 5% 2% October 1, 2024 Section 194M – Payment of certain sums by certain individuals or Hindu undivided family 5% 2% October 1, 2024 Section 194-O – Payment of certain sums by e-commerce operator to e-commerce participant 1% 0.1% October 1, 2024 Section 194F – Payments on account of repurchase of units by Mutual Fund or Unit Trust of India Proposed to be omitted — October 1, 2024 TDS Rate Chart for FY 2024-2025 The TDS rates as applicable in the Financial Year 202-2024 (Assessment Year 2024-2025) are highlighted in the TDS Rate Chart table below – Section Nature of payment Threshold limit (INR) Rate of TDS 192 Salary Taxable income liable to income tax Any of the following rate as opted by the employee – ·        Normal slab rate; or ·        New tax regime slab rate. 192A Premature withdrawal from Employees’ Provident Fund INR 50,000 10% 193 Interest on securities INR 2,500 10% 194 Dividend INR 5,000 10% 194A Interest (other than interest on securities) Bank deposit/ banking co-operative society deposits/ post office deposit – ·        In case of senior citizens – INR 50,000; ·        Any other case – INR 40,000. Deposits (other than above) – INR 5,000 10% 194B Winning from lottery/ crossword puzzle 10,000 30% 194BA Winning from online games – 30% 194BB Winning a horse race 10,000 (notably, a threshold of INR 10,000 will apply to aggregate winning during the Financial Year) 30% 194C Payments to contractors Single transaction – INR 30,000; and Aggregate of transactions – INR 1,00,000 In case of individuals/ HUF – 1% Any other case – 2% 194D Insurance commission INR 15,000 In the case of individuals – 5% In case of company – 10% 194DA Payment relating to life insurance policy INR 1,00,000 5% 194E Payment to non-resident sportsmen/ sports association – 20% 194EE Payments relating to deposits under NSS (National Savings Scheme) INR 2,500 10% 194F Payment towards repurchase of the unit by Unit Trust of India/ Mutual Fund – 20% 194G Commission/ prize, etc. on sale of the lottery tickets INR 15,000 5% 194H Commission/ Brokerage INR 15,000 5% 194-I Rent INR 2,40,000 In the case of plant and machinery – 2% In the case of land/ building/ factory/ furniture/ fittings – 10% 194-IA Payment towards transfer of certain immovable property (other than agricultural land) INR 50 Lakhs 1% 194-IB Payment of rent by HUF/ individual (not liable to tax audit) INR 50,000 per month 5% 194-IC Payment under JDA (Joint Development Agreement) NIL 10% 194J FTS (Fees for Professional or Technical Services) INR 30,000 In the case of fees for technical services/ specified royalties – 2% In any other case – 10% 194K Income relating to specified units INR 5,000 10% 194LA Payment towards compensation for acquisition of certain specified immovable property [land (other than agricultural land)/ building or part thereof] INR 2,50,000 10% 194LB Income relating to interest from infrastructure debt fund NIL 5% 194LBA Income from the units of business trust NIL 10% 194LBB Income from units of investment funds NIL 10% 194LBC Income relating to investment in securitization trust NIL In case the payee is individual/ HUF – 25% In any other case – 30% 194LC Income relating to interest from Indian Company/ business trust NIL 5% 194LD Income relating to interest on certain specified bonds/ government securities NIL 5% 194M Payment of certain sums (i.e. commission/ brokerage/ fees for professional INR 50 Lakhs 5% 194N Payment of certain amounts in cash, i.e. cash withdrawals INR 20 Lakhs in case the recipient has not furnished income tax return for three previous years (immediately preceding the previous year in which cash is withdrawn) INR 1 crore in any other case In case amount/ aggregate amounts exceed INR 20 Lakhs – 2% In case amount/ aggregate amounts exceed INR 1 crore – 5% 194-O Payment of sum by an e-commerce operator to participant INR 5 Lakhs 1% 194P Tax deduction in case of senior citizen of 75 or more years age Taxable income which is liable to tax As per rates in force 194Q Payment towards purchase of goods INR 50 Lakhs 0.10% 194R Benefit/ perquisite in respect of business/ profession INR 20,000 10% 194S Payment relating to transfer of virtual digital asset Payment done by specified person – INR 50,000 Payment done by any other person – INR 10,000 1% 195 Payment of any other amount/ sum to a non-resident Income relating to investment done by a non-resident Indian Citizen NIL 20% Income relating to LTCG referred in section 115E of the Income Tax Act with regard to a non-resident Indian Citizen NIL 10% Income relating to LTCG referred in section 112(1)(iii) of the Income Tax Act NIL 10% Income relating to LTCG referred in section 112A of the Income Tax Act NIL 10% Income relating to STCG referred in section 111A of the Income Tax Act NIL 15% Any other income relating to LTCG NIL 20% Income relating to interest payable by the Government/ Indian concerns on money borrowed/ debt incurred in foreign currency NIL 20% Any other income NIL 30% 206AA TDS deduction