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The various sources through which a company can meet its fund requirements are:..
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Share is a smaller unit into which the total capital of the company is subdivided. ..
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A company can issue two types of shares to raise long term funds: Equity Shares,Preference Shares..
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Company: The Company does not accept any obligation while issuing equity shares…
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Cost of issue of equity shares is high, The excessive use of equity shares is likely to result in over capitalization of the company…
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Preference shares are those shares which are given preferential treatment as compared to equity shares….
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Types of Preference Shares - Cumulative Preference Shares, Non cumulative Preference Shares, Participating preference shares…
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Convertible Shares are those shares which can be converted in the equity shares whereas…
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Cumulative Shares are those preference shares in which the arrears of dividend go on accumulating if the company…
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Debenture means a document issued by the company as an acknowledgement of indebtedness to its debenture-holders…
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Company : Controlling position of the existing equity shareholders does not get affected as debentures do not carry any voting rights….
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The disadvantages of debentures are as follows:…
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Various types of debentures issued by companies: 1) Registered Debentures…
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Registered debentures are recorded in the company’s debenture-holders’ register with full details…
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Convertible debentures are the debentures which can be converted into equity shares of the company…
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Companies Act 1956 has made certain provisions to protect the interest of Debenture holders….
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Term Loan is a liability accepted by the company for purchasing the fixed assets. These are repayable over a period of …
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Term Loan agreement is a written contract between the borrowing company and lending bank or financial institution….
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The additional covenants in term loan agreement to protect lenders are:…
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Public deposits are the source for meeting the working capital needs of the company. Companies find public…
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The control over public deposits was exercised by introducing Sec 58A and 58B to the Companies Act, 1956 vide Amendment Act,…
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Following are the requirements need to comply with before accepting the deposits…
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If a company wants to invite public deposits, it should publish an advertisement in the state in which the registered office…
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Following details are included in a deposit receipt: 1) Date of receipt…
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For example, if a company purchases a machine and that machine become obsolete in terms of the rapid technological development;…
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Hire purchase is an agreement between the owner of goods, called Hiree and the user of the goods…
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Accounting for lease transactions are done on the following basis:…
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Accounting for hire purchase transactions are done on the following basis:…
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Financial lease, Operating lease, Sale and lease back is a financial transaction in which the lessee purchases…
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Financial lease is a method of raising finance to pay for assets. It is also known as capital lease….
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Operating lease is a lease contract which has a smaller period of time compared to the useful ….
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Sale and lease back is a financial transaction in which the lessee purchases the asset of his own choice…
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The profit earned by the company is diversified in three ways: taxation, dividend payments and ploughing back profits. …
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Following details are covered in a deposit register:….
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If a deposit is repaid after 6 months from the date of deposit but before its expiry, the rate of interest…
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Small depositor is a depositor who has deposited a sum not exceeding Rs. 20000 in a company in a financial year. ..
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Lease financing is a contractual agreement between the owner of the assets (lessor) and user of the assets…
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Lease agreement is a written agreement and also known as lease deed which starts the legal relationship between…
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Following are the advantages of leasing for the lessee:…
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Yes, leasing increases borrowing capacity of a firm. For example, if a company at present has a 1:1 debt equity ratio…
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