SAWBUCK

When I first time read this term, wondered if its the sibling of a duck ..!!..:-)

But surprisingly, its a financial term. Lets see what does it mean..

SAWBUCK = SAW + BUCK

Where BUCK is a slang commonly used for currency in US and SAW itself associates to a carpenter. So, can you guess..?

Ok, check out the answer:-

Sawbuck is a Slang term for the US ten dollar paper currency. The slang is derived from the Roman numeral for ten. "X". The "X" looks like the shape of a Sawbuck; a device used to hold wood in place for sawing it into pieces and so the slang formed SAW + BUCK = SAWBUCK.

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CORPORATE STOCK - A Layman's view

CORPORATE STOCK: It can trigger in anybody's mind that stock held in a corporate is Corporate Stock. Yes, its right.

Lets check out the definition:-

An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation's assets and profits. However, the claim to a company's assets and earnings of most stockholders is subordinated to the claim that the company's debtors have on its assets and earnings.

Two inferences can be drawn from the above definition-

- There must be an Ownership Position.

AND

- It must represent a claim in the Corporation's assets and profits.

The above inferences conclude that Debt i.e. Debentures and Bonds do not constitute Corporate Stock, Since there is a Claim but no ownership position.

So, Corporate Stock includes Common Stock i.e. equities and Preferred Stock i.e. Preference Shares but not the Debt Instruments.

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Calculate EMI - Manually

Usually while preparing Project Reports for banks, we need to calculate EMI for the proposed loan so as to frame out the loan repayment schedules. Though, there are many online calculators available, I believe its the Best when you can do it Yourself.

Moving on the same lines, I found a simple formula to find out EMI, given the other particulars as detailed below:

EMI = (P*r) [(1+r) ^ n /(1+r) ^ n -1]

Where

P= Principal i.e. Amount of Loan

r= Rate of Interest per installment period i.e. monthly, quarterly etc.

n= The tenure of the loan.

** These days we usually, actually mostly use spreadsheets for preparing Project Reports. Use 'PMT' function to calculate EMI and add to your productivity.

P.S.: EMI payment loan are heavily tilted towards interest payments at the start and principal repayments at the end of the loan tenure.

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THE RULE OF 72 - Quite Interesting

Yesterday, while surfing a book, I got something interesting to share with you..THE RULE OF 72; some of you might be knowing it but for me it was quite new and may be for most of you. So here it goes..

I have Rs. 10000/- to invest into but i want to know how long it will take to get my money doubled if a rate of 6% p.a. is offered. Of course, there are many other ways to find the same, but the easiest one I have found is the 72 RULE i.e.

Divide 72 with the rate of return i.e. 6% which comes out to be 72/6 = 12. So, it will take 12 full years to get my money doubled.

Wait..there is one assumption, the simple one actually i.e. any part of amount is not withdrawn during the period.

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DURABLE POWER OF ATTORNEY

A legal document that an individual to designate another person, called the Attorney-in-fact, to act on his/her behalf, even in the event the individual becomes disabled or incapacitated. An advanced directive (sometimes called a 'healthcare directive' ) combines a Living will and 'durable power of attorney' either in one document or two separate ones.

The above definition includes two new terms i.e.

Attorney-in-fact

Living will

Lets see what these two terms tell us:-

Attorney-in-fact: A person who holds power of attorney and therefore is legally designated to transact business and execute documents on behalf of other person.

Living will: A document in which one specifies which life-prolonging measure one does and does not want to be taken if one becomes terminally ill or incapacitated.

So, I guess the above two terms though appeared bit complex are quite simple to understand.

NOW, the question arises what is difference between a Regular Power-of-attorney and a Durable Power-of-attorney..!!

The definition of Power of Attorney: A legal document that enables an individual to designate another person, called the attorney in fact to act on his/her behalf as long as the individual does not become disable or incapacitated.

Difference: So, the explicit difference between a regular and durable power of attorney is that the regular power of attorney ceases to be effective if you become disabled, whereas the "durable" power of attorney continues to be effective despite your subsequent disability. The reason for this difference comes from the old English common law where there was no such thing as a "durable" power of attorney. At common law, if you signed a power of attorney naming someone to act on your behalf, they would have this authority only for as long as you remained competent. If you later became disabled or incompetent, the power of attorney was automatically revoked---they were not "durable".

Recognizing that it would be extremely beneficial if the power of attorney would remain effective even if you later became physically or mentally incapacitated. The creation of a "durable" power of attorney is quite simple by adding special language designed to make it clear that the powers are not be effected by your subsequent disability.

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Incorporation of a Company

Steps to be taken to get a new company incorporated:

• Select, in order of preference, at least one suitable name upto a maximum of six names, indicative of the main objects of the company.
• Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal.
• Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has apply for a fresh name on the same application. (HENCE, ONE NEEDS TO GET DIGITAL SIGNATURE BEFORE GETTING THE COMPANY INCORPORATED).
• After the name approval the applicant can apply for registration of the new company by filing the required forms (that is Form 1, 18 and 32) within 60 days of name approval
• Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.
• Arrange for stamping of the memorandum and aticles with the appropriate stamp duty. (STAMP DUTY WILL BE APPLICABLE AS PER THE STATE LAWS WHERE THE COMPANY IS GOING TO BE INCORPORATED.)
• Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father's name, occupation, address and the number of shares subscribed for and witnessed by at least one person.
• Ensure that the Memorandum and Article is dated on a date after the date of stamping.
• Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm
  
  Declaration of compliance - Form-1
  Notice of situation of registered office of the company - Form-18.
  Particulars of the Director's, Manager or Secretary - Form-32.

Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees and send the physical copy of Memorandum and Article of Association to the RoC

• After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC.

Additional steps to be taken for formation of a Public Limited Company:
To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance

• File a declaration in eForm 20 and attach the statement in lieu of the prospectus(schedule III) OR
• File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
• Obtain the Certificate of Commencement of Business.

Additional steps to be taken for registration of a Part IX Company:
The Part IX Company is required to file eForm 37 and eForm 39 apart from filing eForm 1, 18 and 32.

The company is required to file eForm 1 first and then the company can file all the other eForms (18, 32, 37 and 39) simultaneously or separately

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VAT

VAT- Value Added Tax

Persons liable to pay tax under the VAT Acts of their respective States are required to register under the Act. On registration, a VAT number, known as VRN (VAT Registration Number) in common parlance is allotted to the applicant.

The following provisions are with reference to Punjab VAT Act, 2005:-

In addition to the regular registration, the Act allows a person to take voluntary registration for VAT, provided his turnover is above the specified threshold. However, Casual traders and persons dealing exclusively in tax-free goods are exempted from registration.

TOT: TURNOVER TAX

There is a composition scheme for small traders if they are doing business within the state only and are not registered under the Central Sales Tax Act. They can get registered for TOT (Turnover Tax).

A person registered under VAT is referred to as “Taxable Person” and a person registered under TOT is referred to as “Registered Person”. The registration number granted to person registered for VAT is referred to as “VRN/TIN ” and registration number granted to person registered for TOT is referred to as “TRN”.

LIABILITY TO VAT

Liability to VAT arises when gross turnover exceeds following:

1. Imports taxable goods for sale or use in manufacture or processing any goods in the State- Rs. 1

2. Receives goods on consignment/branch transfer from within or outside the State on which no tax is paid under the Act.-Rs. 1.

3. Is liable to pay purchase tax - Rs. 1

4. Is a manufacturer -Rs. 1,00,000
5. Is a person running a hotel / restaurant - Rs. 5,00,000
6. Is person running a bakery -Rs. 10,00,000
7. Desires voluntary registration -Rs. 5,00,000
8. Is not covered above -Rs. 50,00,000
9. Is registered under the Central Sales Tax Act -Zero

Note: A person is required to get himself registered within 30 days from the date he becomes liable to VAT under the Act.

TAXABLE QUANTUM TO TOT LIABLITY

Liability to TOT arises when gross turnover of a person in the preceding year is more than Rs. 5,00,000 but less than Rs. 50,00,000.

PROCEDURE FOR REGISTRATION

The procedure for registration is as follows:

An application for registration in Form VAT-1 is required to be filed with the designated officer in charge of the area, where business of the person seeking to obtain registration is located. The said application is to be filed within 30 days from the date when such person becomes liable to pay tax. Detailed instructions for filling up the form are contained in the form itself.

The application for registration is to be accompanied by the following:

1. Deposit receipt of Rs. 500/- towards fees for registration. Such deposit receipt (in Form VAT-2) is to be obtained from the appropriate treasury after payment of the fee amount

2. Security in the form of:

- Bank guarantee from a local scheduled commercial bank for the amount of security

                                                         Or

- Personal Bond with two solvent sureties to the satisfaction of the designated officer for the amount of security/additional security in Form VAT-3.

Note: Rs. 100000 (50000 for tax under PVAT Act and Rs 50000 for tax under  CST Act)). The security furnished by a person can be enhanced enhanced by the designated officer for proper realization of tax while the certificate is in force. Such additional security can be demanded upto a sum of Rs. 2 lacs.

3. Copy of the constitution document e.g. partnership deed for a partnership firm, Memorandum and Articles of Association for a company.

4. Board Resolution authorizing the signatory to sign the application in case of company.

5. Proof of identification of the authorized signatory e.g. voter identity card, passport, driving license.

6. Proof of principal place of business e.g. rent receipt, lease agreement, electricity bill.

7. Two photographs for VAT and Centre —

In case of proprietorship Concern – Two Photo of Proprietor.

In case of Partnership firm :-Two Photo of all the partners,

In case of Company – Two Photo of managing director.

8. List of following categories of goods:-

-Goods to be traded.

-Goods to be manufactured.

-Goods to be purchased for use in manufacture.

Note: Every Photostat copy should be attested to be a true copy by the proprietor./partner/director as the case may be.

On satisfaction about the accuracy and completion of the application for registration, the designated officer will issue a registration certificate in Form VAT- 4 within 30 days of the date of receipt of completed application. The registration certificate will be issued for the principal place of business and a copy each for additional place/s of business

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