DEEKSHITH KUMAR PUTTUR

Formation of a company involves certain processes like. Incorporation Promotion Raising Capital Commencement of business Incorporation of a Company Before forming a company, certain preliminary and key decisions need to be taken about the business. Theses decisions are usually done by a person known as ''Promoter'. Promoter will do all the necessary work incidental to the formation of a company. Section 3 of the Companies Act, 2013 deals with the Mode of Forming Incorporated Company.  Procedural aspects with regard to Incorporation 1. Application for Availability of Name of company As per section 4(4) a person may make an application, in such form and manner and accompanied by such fee, as may be prescribed, to the Registrar for the reservation of a name set out in the application as (a) the name of the proposed company; or  (b) the name to which the company proposes to change its name. 2. Preparation of Memorandum and Articles of Association Before filing the documents and...

Meaning of Depreciation It refers to a decrease in the value of assets by wear and tear, caused by their use in the business over a period of time. Its cost is spread over its anticipated life by charging depreciation every year against the profits of the business. Conditions for allowance of depreciation. The asset must be owned by the assesse. It must be used for the purpose of business or profession. It must be used in the relevant accounting year. Assets eligible for depreciation A. Tangible Assets:  Buildings, Machinery, Plant and furniture B. Intangible Assets:  Know-how, Patents, Copyrights, Trademarks, Licences, Franchises or any other commercial rights of similar nature. Other assets like Investments, goodwill  etc., do not qualify under this category. Buildings means only superstructure and does not include the land on which it is constructed. Plants includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of business or...

In order to incorporate a company, there must be a person who initiates the idea of entity. So the,  the first persons who control a company’s affairs are its promoters.   He is a person who does the necessary preliminary work incidental to the formation of a company.  He is a person who identifies a business opportunity or idea, analyses its prospects, and takes steps to implement it. According to [Sec. 2(69)] Companies Act 2013, Promoter means a person  a) Who has been named as such in a prospectus or is identified by the company in the annual return referred to in Section 92; or b) Who has control over the affairs of the company, directly or indirectly, whether as a shareholder, director or otherwise or c) In accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act. However, if he is acting in a professional capacity, he shall not be treated as Promoter. According to Justice C Cockburn, Promoter is "one wh...

One of the important characteristics of the company is that the company is distinct form its members. This principle is known as "the veil of incorporation". The corporate veil protects the members from the liability of the company. It is a statutory privilege and it must be used for legitimate business purposes only. If it is used for any fraudulent or dishonest purpose, the court will breakthrough, this shelter of separate legal personality and and apply the principle/doctrine of what is called as “lifting of or piercing the corporate veil”. In this action, the court will look at the persons behind the company who are the real beneficiaries of corporate fiction. Cases in which the corporate veil has been lifted: 1. For protection of revenue The court will allow piercing of corporate veil if it is of the opinion that the company has been formed for evading the tax or to, circumvent tax obligations. If such is the case, the court will disregard the corporate entity and would ...

Meaning It refers to the ascertainment of marginal cost by differentiating between fixed and variable cost. It is a technique in which only variable costs are taken into account for purposes of product costing, inventory valuation and other allied important management decisions. It is developed to overcome the deficiencies of absorption costing. It is also known as variable costing. Definition J Batty defines, Marginal costing as, "a technique of cost accounting which pays special attention to the behavior of costs with changes in the volume of output” According to ICMA, London , “the ascertainment of marginal costs and of the effect on profit of changes in volume or type of output by differentiating between fixed costs and variable costs”. ICMA, London defines Marginal Cost as, “the amount at any given volume of output by which the aggregate costs are changed if the volume of output is increased or decreased by one unit”. It is a variable cost of one unit of a product or a servi...

Business law or Commercial law deals with the sale and distribution of goods. Whereas Corporate or Company Law is a legal field that governs the formation of companies, shareholder rights, mergers, and acquisitions.  Company law in India, is the cherished child of the English Parents. Company legislation in India owes its origin to the English Company Law. Joint Stock Companies Act, 1844 in England, the first Companies Act was passed in India in 1850. After this, The Amending Act of 1857 conferred the right of registration of companies with or without limited liability. Subsequently this right was aslo granted to banking and insurance companies by an Act of 1860. The Companies Act of 1856 was introduced which repealed all the previous Acts. This Act included the aspects of incorporation, regulation and winding up of companies and other associations. This act was also amended in the year 1882, 1913, 1936. In 1948, England passed a comprehensive Companies Act in England. By the mean ...

Under the head 'Income from house property' the basis of charge is the annual value of property (Sec. 22) 1) consists of any buildings or lands appurtenant thereto, 2) of which the assessee is the owner and 3) which is not used for purpose of assessee's business or profession. 1. B uildings or lands appurtenant thereto The land appurtenant to the building includes compound, play-ground, kitchen-garden, courtyard, etc. In the case of non residential building, car parking spaces, drying grounds, play grounds, connecting roads in the factory area shall be lands appurtenant to building. A land which is not appurtenant to any building does not come within the scope of this section. Income from such land is taxable under the head 'Income from other sources'. Exceptions: 1. Building or staff quarters let out to employees and others. 2. If building is let out to authorities for locating bank, post office, police station etc., 3. Composite letting of building with other asse...