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October 28, 2013

Need of Right Issue



Rights issue is a method by which companies  raises their share capital by offering new shares  to their existing equity shareholders, thus new  shares issued by a company must first be offered  to the existing shareholders in proportion to their  holding of old shares, i.e. on pro rata basis.

Sometimes companies come out with a batch of new shares and may choose not go to the public (like IPO). Company may just approach only the existing shareholders (those who own the shares of that company). These shares are called a rights issue. In other words, only the existing shareholders have a right to buy these shares.

Section 81 contains provisions on "Further issue of capital", and provide a statutory right of existing shareholders to have offered the new shares. Thus, this section gives a Company's existing equity shareholders a pre-emptive right to get the further shares

Whereas Section 81(1A) provides for relaxation from Section 81(1).It provides that further shares may be offered to any person other than existing shareholders. 

Unlike Bonus shares, you have to pay for the these shares  acquired.

The shareholders, who receive offers for  subscribing to the rights shares are entitled to  renounce (i.e. surrender to someone else of their  rights to new shares) it in favour of any body  else if they do not want to subscribe to such a  rights issue. It is one of the statutory right of the  shareholder.

The person to whom the shares are offered has to  fill up the renunciation form (usually attached  with the letter of offer) in favour of the person to  whom he wishes to renounce his rights.

This facility benefits both the shareholder as well  as the outsider, since the shareholder can sell the  benefit which accrues to him by the way of rights  issue in which he is not interested at this  moment, and the outsider is benefited since he  could purchase the shares of that company at the  face value of the shares rather than at the market  price.

October 20, 2013

Sections for Approaching Company Law Board




17,18,19
Alteration in Memorandum of association
58A
Not to accept deposit without advertisement
58AA
Default in repaying deposits of Small Public
79/80A
Issue of shares at discount
111
Refusal for registration of shares/debentures
113
Time for issue of share certificates
117
Debentures with Voting Rights
117C
Company to create debenture redemption reserve
118
Right to obtain copies and inspect trust deed
141
Change in Register of charges
144
Inspect documents creating charge
163
Inspection of returns & Registers
167
CLB to call Annnual General Meeting
169
To call Extra ordinary General Meeting
186
CLB to call meeting
196
Inspection of Minute Book of General Meeting
219
Right of members to get copies of Balance Sheet and Auditor Report
235
Investigation of Affairs of the company On request of company/court
237
Investigation of Affairs of the company On request of Shareholders
247/250
Investigation of Ownership of company
269
Appointment of Director
284
Removal of Directors
307
Inspection Register of Directors
388B
Against Management Personnel by Central Goverment
397/398
For relief in case of oppression/Mismanagement
614
Enforcement of Duty to company to make returns
621A
Forgiveness for Certain offences
634A
Enforcement of CLB orders
408
Central Govt to stop oppression and mismanagement
409
To prevent change in Board of Directors





October 15, 2013

Word excel link update frequency/ Interval



Update linked objects
By default, linked objects are updated automatically. This means that Word updates the linked information every time you open the Word file or any time the source Excel file changes while the Word file is open. However, you can change the settings for individual linked objects so that the linked object is not updated or so that it is updated only when the reader of your document chooses to manually update it.
You can also prevent Word from automatically updating links in all the documents that you open. You can do this as a security measure, to prevent updating documents with files that are potentially from an untrusted source.
 Important   When you open a document that contains linked objects, Word prompts you to update the document with data from the linked files. If you suspect that the linked files may be from an untrusted source, click No in this message.
In addition, you can permanently break the connection between a linked object and its source Excel file. When the connection is broken, you can no longer edit the object in the Word document; it becomes a picture of the Excel content.

Manually update a linked object
  1. Click the Microsoft Office Button , point to Prepare, and then click Edit Links to Files.
  1. Click the link that you want to update manually, and then under Update method for selected link, click Manual update. Or press CTRL+SHIFT+F7.
Prevent a linked object from being updated
  1. Click the Microsoft Office Button , point to Prepare, and then click Edit Links to Files.
  1. Click the link that you want to prevent from being updated, and then under Update method for selected link, select the Locked check box. Or press F11.
 Note   To unlock the link, click the linked object, and then press CTRL+SHIFT+F11.

Prevent Word from automatically updating links in all documents
  1. Click the Microsoft Office Button , and then click Word Options.
  1. Click Advanced, and then scroll down to General.
  2. Clear the Update automatic links at Open check box.

To update all Unformatted Text in the documents 

Simply update the appropriate fields in Word by clicking on the field and pressing F9; alternatively, select the entire document by pressing CTRL + A and then press F9 to update all fields.

October 4, 2013

Tax on Purchase of overseas Travel Package purchased by Tour operator




CASE
Agent providing sale and marketing services relating to cruises and holiday packages for overseas agents and their appointment in India is mainly for the purpose of collecting money in India, therefore, the entire sale proceeds received by the agents were received on behalf of the overseas agents and belonged to it subject to the rights of the agents.

As per Section 9(1)(i)
The following incomes shall be deemed  to accrue or arise in India :—
 (i)  all income accruing or arising, whether directly or indirectly, through or from any business connection in India….
Furher as per Explanation 1
[Explanation 1].—For the purposes of this clause—
(a)  in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India ;

 [Explanation 2.—For the removal of doubts, it is hereby declared that "business connection" shall include any business activity carried out through a person who, acting on behalf of the non-resident,—
(a)  has and habitually exercises in India, an authority to conclude contracts on behalf of the non-resident, unless his activities are limited to the purchase of goods or merchandise for the non-resident; or
(b)  has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non-resident; or
(c)  habitually secures orders in India, mainly or wholly for the non-resident or for that non-resident and other non-residents controlling, controlled by, or subject to the same common control, as that non-resident:
Provided that such business connection shall not include any business activity carried out through a broker, general commission agent or any other agent having an independent status, if such broker, general commission agent or any other agent having an independent status is acting in the ordinary course of his business :

[Explanation 4.—For the removal of doubts, it is hereby clarified that the expression "through" shall mean and include "by means of", "in consequence of" or "by reason of".


As clear from the reading of explanation (1) (a) when no business operations are carried out in India, even if a non resident has a business connection in India, no part of income of such business can be deemed to have accrued or arisen in India.