Saturday, December 23, 2006

Frienge Benefit Tax - FBT

  1. Contribution made by employer to approved superannuation fund is exempted from FBT up to the limit of Rs.1 Lac per employee per year.
  2. Expenditure towards 'Conveyance' attracts FBT @ 20% and expenditure towards 'Tour and Travel' attracts FBT @ 5%. This necessitates appropriate classification of expenses between conveyance and Tour Travel.
  3. In case employer recovers some portion of the expenses from the employees the FBT will be applicable on the net amount of expenses.
  4. When a common expenditure is shared by group companies, each company will be liable for FBT on its share of expenditure.
  5. FBT is not applicable on the amount of LTA paid to the employees.
  6. concessional ticket or sponsored tour of employee and family members attracts FBT.





Sunday, December 17, 2006

Circular Resolution

  1. Circular resolution can be passed for Board as well as Committee of Directors.
  2. An Additional director can be appointed by a circular resolution.
  3. Draft of the resolution will be circulated to all the directors then in India. However it is advisable to send the draft resolution ot all the directors.
  4. Circular resolution should be sent to the alternate director and not the original director.
  5. Circular resolution should be circulated to at least that number of directors as fixed for the quorum. In other words at least that number of directors must be present in India.
  6. A certified true copy of the resolution may be issued. It is advisable to mention the date of passing the resolution.


Thursday, December 14, 2006

Voluntary Retirement Scheme - VRS

Income Tax Benefits

Under the provisions of Section 10(10C) of the Income Tax Act, 1961, an employee is eligible to claim a one-time exemption up to Rs 5,00,000 in relation to the compensation received under a VRS



Conditions for claiming the benefit

  1. The scheme applies to an employee who has completed 10 years of service or attained 40 years of age. In case of employees of PSU this condition is waived for the purpose of enjoying the tax exemption.

  2. The vacancy resulting from an employee availing VRS should not be filled up and the retiring employee cannot take up employment with another company belonging to the same management where the employee was working.
  3. The scheme should be drawn to result in overall reduction in the existing number of employees.

  4. The scheme should apply to all employees (except directors) of the company.

  5. The amount receivable by employees on voluntary retirement should not exceed 3 months salary for each completed year of service; or salary for the balance months of service left before the date of retirement or superannuation. ‘Salary’ in this case means the last drawn salary and includes only Basic salary + dearness allowance and excludes all other allowances and perquisites.



Once in the Life Time

This is a one time exemption available in the lifetime. If at a later stage in life, an employee gets similar opportunity of VRS then he would not be eligible to claim any exemption under Sec. 10 (10C) of the Act.



Saturday, December 09, 2006

Bombay Stamp Act

Issue of Share Certificate
Rs. 1/- per Rs.1000. The amount of share certificate will include the amount of Premium paid.


Transfer of Shares
Stamp duty on transfer of shares is @ 0.25% of the market value of the shares on the date of the transfer. (w.e.f. March 2004)

Mortgage

Duty on Deposit of title deeds, mortgage of movables, pawn, pledge, and hypothecation deeds has been reduced from 0.5 % to 0.1%


Loans
Stamp Duty on unsecured loans, Loan agreements is 0.1%. Earlier the rate was 0.25%

Balance Sheet

Authentication - Sec.215

In the case of a company other than a Banking Company , by its or secretary, if any, and by not less than two directors of the

company one of whom shall be a managing director where there is one.

Thursday, December 07, 2006

Annual General Meeting

Adjournment

Adjourned annual general meeting must itself be held within statutory

period, including the period of extension thereof, if any allowed, as

provided in section 166(1)

Wednesday, December 06, 2006

Partnership Firm



A firm is an artificial person and upon dissolution it ceases to exist. therefore a contract of agency entered into aby a firm stands terminated upon its dissolution.

Power of Attorney

General

A Power of Attorney [PoA] is governed by the Powers of Attorney Act 1882, Indian Contract Act 1872 and Indian Registration Act 1908.

There is a specific distinction between an Agent and a PoA holder. An Agent is not empowered to use the name of the principal whereas the Attorney can use the principal’s name in the transaction entered into by him.

A PoA issued in regard to a single transaction is known as a Special PoA.

An Attorney who is appointed as agent to do a certain thing and if there is no express term for termination of agency, then it can’t be terminated.

A PoA issued for registration of documents must be registered before the Registrar of the district where the Principal resides. A PoA issued out of India must be executed before a Notary Public, Magistrate or Indian Consul.

A PoA ceases on the death of either party. Where 2 Attorneys are appointed to act Jointly and one of them dies the survivor can’t act alone
A minor can’t issue Power of Attorney [POA] as a minor does not have legal rights to execute a document. A minor can execute a document only through his guardian

Duration:


A General Power of Attorney [POA], unless expressly or impliedly limited for a particular period continues in force until revoked or determined by death of either party.
A Special POA to do an act is determined when the act is done.


Termination:

  1. A POA may be terminated -
    1. by the Donor by revoking the attorneys authority, or
    2. by the attorney renouncing his authority. or
    3. after the activity is completed.
    4. by the death of either party or
    5. by the donor is declared as insolvent.
  2. Termination of authority to the agent terminates the authority of all the sub-agents.

Irrevocable POA

A POA can not be revoked without the express consent of the attorney Where the attorney has an interest in the subject matter of the POA. Where the authority is given to the attorney by deed or for a valuable consideration or a security or for securing the interest of the attorney the POA is irrevocable during the subsistence of such security or interest.

When a POA can not be Revoked.

  1. The POA can not be revoked after the agent has partly used the power vested in him.
  2. Where there is an express or implied contract that the agency should be continued for a period of time. in case of revocation the Principal has to pay compensation for early revocation.
  3. POA can not be revoked without giving notice.

Revocation

Revocation should be made known to the agent. The revocation does not take effect till the same is notified by the principal to the Agent.


POA ineffective

A suit filed by a POA holder on behalf of the principal is considered as nullity where the principal is dead at the time of filing the suit.


POA issued Jointly.

Death of one of the joint principals will not revoke the POA.


Authority

The power of attorney once utilised would not terminate or cease in relation to future acts which are only consequential to the previous acts already done.

An Advocate can not act simultaneously in processional capacity and also as an agent of the principal.



Friday, December 01, 2006

Corporate Governance Requirements.

  1. The Company must publish its philosophy on code of Governance.
  2. It is recommended that Chairman and CEO should not be the same person.
  3. To disclose the Tenure and age limit of Directors including Independent Directors.
  4. Disclose of Definition of Independent Director, Financial Expert and selection criteria for Board of Directors.
  5. A Director shall not be a Chairman of more than 5 committees and shall not be a member of more than 10 committees across the companies where he is a director.

  6. To have in place post Board meeting follow up system and compliance of Board procedures.
  7. Appointment of Lead independent Director.
  8. To setup a Remuneration Committee. Disclosure of Remuneration policy and remuneration of Directors.
  9. to disclose Code of Conduct.
  10. Audit Committee
    1. Transparency in composition of Audit Committee
    2. In case the Chairman is executive director 50% of the Committee members should be Independent directors.
    3. In case the Chairman is non-executive director 1/3rd Committee members should be Independent directors.
    4. At least 4 meetings in a year with duration between the two meetings of not more than 4 months.
    5. To disclose the participation of invitees in the committee meetings.
    6. Disclosure of Audit committee charter and terms of reference.
    7. Publishing the Audit committee report.
  11. To provide half yearly financial results to Share holders.
  12. Disclose Audit Qualifications in the Annual Report.
  13. To establish a Whistle Blower Policy.
  14. To disclose details of last 3 AGM and EGM with details of Special resolutions passed in those meetings.
  15. A Company shall have a code on Prohibition of Insider Trading.

(c) Copyright 2006, Shreerang Ketkar

Wednesday, November 29, 2006

Functions of Company Secretary of Listed Company



  1. Submission of Quarterly financial results to Stock Exchanges and publication of the same in the local news papers.
  2. Get certificate from Practising Company Secretary towards number of Demat equity shares and number of physical shares comparing them with the number of paid up equity shares.
  3. To conduct meeting of Share Transfer committee.
  4. To submit Quarterly report on Corporate governance to Stock exchanges within 15 days from the end of the quarter.

Tuesday, November 28, 2006

Annual Return - Companies Act 1956

The entire list of shareholders with their details are not required to be filed every year with ROC along with Annual Return. The full details of shareholders shall be filed once in 6 years. Changes in the shareholding between two Annual General Meetings should be filed every year.





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Friday, November 03, 2006

FEMA - Foreign Ex. Transactions by ressident Indian

RBI has allowed resident Indians for any current or capital account transactions or a combination of both up to $50,000 per Calendar year.However the amount can not be used for purchasing lottery tickets or investment in Bhutan, Nepal, Mauritius or Pakistan.No entity other than a licensed banking company could solicit foreign currency deposits from residents.

Friday, June 16, 2006

Palmistry E-book

You may down load the palmistry E-book from the link mentioned below

  1. http://www.orbitfiles.com/download/id183528074 - Palmistry by Barret V David in PDF format

Sunday, June 11, 2006

Doctor and the Law

  1. Consent of a patient before carrying out treatment: If its very urgent and if the patient is not in a condition to give his consent the doctor can do whatever is necessary to save the patient’s life without his consent.

Whatever the doctor does in such situation must be in the best interest of the patient. Same rule applies to minor. In life threatening situations doctors are not required to consult with parents or the guardians of minor patients.

  1. Miscarriage: Causing miscarriage is an offence even if it is done with the consent of the woman or her guardian. It will not be an offence if such miscarriage is done for saving the life of the woman. (Sec. 91 IPC)

© 2006, Shreerang Ketkar, All rights reserved.

Indian Penal Code

  1. Private defence: Every person has to right to protect himself or that of another against any offence. Even a stranger has the right to defend the person or property of another. If a police officer is acting without good faith, the right of private defence may be exercised against him.
  2. Shooting with an unlicensed gun is clearly an offence and a person can not claim that he killed / injured somebody by accident.

© 2006, Shreerang Ketkar, All rights reserved.

Saturday, June 03, 2006

Company Fixed Deposits

According to the latest RBI guidelines NBFC’s and Companies can not offer more than 14% interest PA on public deposits.

Saturday, May 27, 2006

Co- Operative Housing Society

  1. Formation: A builder has to initiate steps towards formation of society once he sells at least 10 Flats/ units in the building.
  2. Conveyance of land & Building: Within 4 months from the date of formation of the so-operative housing society the builder has to convey the Land and the building in favour of the society.
  3. Common electric Meter: Incase a builder provides electricity connection to the flat owners from a common electric meter it will be the builder’s responsibility to ensure the supply to each flat owner. In case of default, the flat owners can file a legal suit against the builder in the small causes court. The court may direct the builder to reinstate the supply of electricity. In case of default the builder will have to pay penalty @ Rs.100/- per day of default.
  4. Non-Occupancy charges: a society can’t charge an amount exceeding 10% of the service charges towards non-occupancy charges.
  5. Maintenance charges: can be laved on the basis of the area of the flat. All the members should share maintenance charges equally.

Agricultural Land

  • An Agricultural Land can’t be sub-divided or fragmented below 0.25 Acres. (10 Gunthe) Hence sale or Purchase of Agricultural land less than 0.25 Acres is not allowed.

Wednesday, May 24, 2006

Foreign Exchange Management Act

All transactions undertaken by a resident that do not alter his assets or liabilities outside India are Current Account Transactions. All other transactions are Capital Account Transactions. 

Foreign Exchange [FE] up to US $25,000 can be released for a business trip to any country other than Nepal and Bhutan. Travellers are allowed to carry Notes / Coins only up to US $ 2000. The balance amount will be in the form of Travellers cheques or Bank drafts. The FE can be acquired by the person 60 days prior the intended travel date. In case an individual wants more FE he can remit FE out side through the route of Liberalised Remittance Scheme. Under this scheme any resident Indian [RI] can freely remit upto US $ 25,000 per Calendar year for any permissible current or capital account transaction or a combination of both. Such amount can be used by the Individual during his visit out side India. 

Travellers must return the balance FE within 90 days and travellers cheques within 180 days.

An individual can retain up to US $ 2,000 in the form of Foreign currency notes of TCs or the FE can be credited to RFC account.

There is no limit on how much Foreign currency can be brought by a returning traveller ! Only condition is that he has to declare the amount to the customs officers at the Airport. However while coming back to India a person can bring up to Rs,5,000 in Indian currency.

A resident Indian can gift upto US$5,000 in a year to a person residing outside India. 

For private foreign visits such as Tourism FE upto US $ 10,000 in any one calendar year may be obtained.

A person going abroad for employment or migrating to other country can draw FE up to US$ 1,00,000 in India.

Cash only upto Rs.50,000/- can be used for purchasing FE. The balance amount should be through banking channels.

Sunday, May 21, 2006

Stamp Duty - Relinquishment of Right

No stamp duty will be paid in case a member of HUF relinquishes his right over a property in favour of another member of the same HUF. Such relinquishment should be on a Non Judiciary Stamp paper. The legal heirs of the Relinquishor should also accede the relinquishment. This transaction will not give rise to Capital Gains.

Thursday, May 18, 2006

Non Voting Shares

Non Voting shares can be issued by by that Pvt. Ltd. / Pub. Ltd Company which has distributable profits in terms of Section 205 for preceding 3 financial years and satisfaction of other conditions as specified in GSR 167(E) of 09/03/2001 issued by DCA.

Saturday, May 13, 2006

Maharashtra Right to Information Act 2002

The act applies to Govt. and any Public authority. The term Public Authority means a body which is constituted by any Central or State law. Owned and controlled by the state or which receives aid (Govt. land at concessional rate, exemption in tax etc.) also includes bodies whose composition and administration is controlled by Govt. or the functions of which are of public interest.

An application for information should be on a Plain paper in the format given and should be affixed with a Court fee stamp of Rs.10/-. The time limit given to the Public Information Officer [PIO] is 15 days for providing information. In case where the information involves the life and liberty of a person PIO must provide the information within 24 hrs.

The PIO may refuse to provide information based on grounds for rejection of information as stated in the law. The PIO may refuse to provide information if the information is available with him under trust, the information pertains to Service record of a person or if the information is a personal information which would cause unwarranted invasion of the privacy of the individual. However the PIO can not refuse to provide information about a prisoner even if the information is personal provided the information is used for the common benefit of the society.

Useful link à http://www.agnimumbai.org/rti.pdf