Advantages of PLC

Advantages of PLC

A Limited Company is a company where the liability of the members of the company is limited to what they invested or guaranteed in the company. These limited companies are further divided into three kinds i.e. public, private or one-person company.A company’s liability may be limited by shares, in which case the liability of the company’s members is limited to the amount of the shares held by them.Public Limited Company is a kind of company whose securities are traded publicly on the stock exchange. In simple words these are the companies that go to the people in to order to raise a capital for a consideration of being able to have an opportunity to be a member of that company and there are no restrictions on the number of stakeholders. It offers shares and debentures to the public and in times of profit the same is shared with the people owning them. The basic feature for a Public Limited Company is that it should be able to provide its shares to the public and in order to do the same it has to contain various things. Every company has to have a minimum share capital of Rs. 5,00,000 containing the words ‘limited company’ in its name. A minimum of 7 members are required to form a public limited company in this country and there should be no self-possession on maximum number of members. Also the shares should be transferrable. These companies can raise funds from general public through open invitations by selling its shares and accepting fixed deposits.Many organisations start their business as a private limited company and later become a PLC in order to raise capital for expansion and development of the company.

There are quite upsides of a Public Limited company. Since it is a limited company as suggested by the name itself the liabilities arising out of the company are only to what extend the shares have been purchased. So when there is a crisis which makes the liability clause comes into question the investors personal possessions are protected since they cannot lose more than what they have invested. Liability for debts is limited to the amount of issued share capital. A limited Company exists as a legal entity in itself, separate from its owners and managers.The business can be sued on its own and not involve its shareholders. The company does not belong to any person since one person can own only a part of it.This clearly signifies the capability of the firm to run independent of its people. This means that even if the shareholders leave the firm or die the firm will still continue to exist in the eyes of law. In the case of a director’s death, an election is held to replace the deceased director. This shows the democratic feature of the company.

Also the management of the company is not only confined to few of its members but to the shareholders as well. They can exercise control over management in general meetings of the company. Also the Minority shareholders are provided protection under the Companies Act against oppression and mismanagement.

These firms have no limit to the numbers of shareholders it can have and it is because of that reason the company can raise large amounts of money. Whenever the company needs capital it has the authority to issue more number of shares in order to expand their business. Also since all the shares are transferrable and accessible to people in all walks of life it is easy to buy and dispose them off when needed and vice versa. By disposing means to sell those shares away when one doesn’t wish to continue to be a member of the company.  Also since there shares are easily transferrable they are considered liquid by the investors which makes them flexible i.e. the investors who care all about the money don’t have to stick to the same company. Once they have earned profits and they do not think that being a part of the company would benefit them they can always sell the shares.

Because it is a Public Limited Company the company’s accounts and financial statements are required to be published annually as they are strictly regulated and required by law to do the same. This ensures that they reveal their true financial position to their owners and investors can determine the worth of the shares. This shows transparency in the company and the shareholders feel secure for their investment and also improve their confidence over the company.

From the view point of a Public Limited Company, it is easy to take loans from the bank itself if the share capital is as big as that of a PLC. The company has the opportunity to make acquisitions more easily as the capital gives it a backing to be a strong firm fit for taking on another firms and due to the same the company gets an admirable profile in the market which consequently affects its shares values and thus benefitting the people investing in them.

Thus we have seen the advantages of the PLC. To sum it up the advantages can be said to be as follows. It has limited Liability which does not lead to loss of personal assets of the members. Since there can be limitless number of shareholders the company can issue innumerable numbers of shares and also increase its capital for the development of the firm. Since the shares are transferrable and the company has to be transparent it gives easy transfer of the shares and also allows the investors to value the shares (not hold on to the same company). The acquisitions of the company give a benefitting profile to the company. At last the shareholders stay in confidence because of the continuity of existence and the unity of direction for it is them that makes the share capital for the company.

Author: This blog is written by Ms. Anmol Srivastava, student of Damodaram Sanjivayya National Law University, Visakhapatnam, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

Managing Director of Company

Managing Director of Company

Management as we know it is the key to a successful institution. Everything that runs now a group of people coming together to accomplish a particular task. In order to run the organisation there are various aspects which are to run efficiently so that the institution achieves its goals. Management is one such activity which is the main reason why a company does not crash on its first day. Basically managing means handling or controlling the activities of the company and deal with the errands which the company runs through every day. Management is a skill which requires due care and control of the situations & complexities which a company can face in its regular working. With every department there is a head which governs the same. As management is the most important of all the head for the same is the Managing Director of the Company.

The primary work of a managing director is to look over the daily operations of the company. In some divisions of the world the work of an MD is considered same as that of the CEO (Chief Executive Officer) but an MD is a member of the Board of directors and responsible for day to day business activities of the firm. Also an MD is responsible for the overall management of an organisation whereas it is the CEO’s responsibility to facilitate the business and have a strategic vision to assign the company both internally or externally.

The Companies Act, 2013 defines Managing directors under clause 54 of Section 2 of the act. According to which a managing director means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.

Provided that the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management.

In order to be qualified as a Director of a company the person should be a director of the company already, a non-director cannot be appointed as an MD. It is a pre-requisite to being appointed as an MD even if prior approval has been obtained by the government of the state.

The act also provides people who cannot be elected as Managing Directors (MD), which are:

• An undischarged insolvent or one who has been declared by the court as insolvent
• One who suspends or has suspended payment to his creditors, or has anytime made a composition with them
• One who has been convicted in the court on an offence which involves moral turpitude.

The maximum term of appointment can be five years at a time and a new term cannot be sanctioned earlier than two years from the date on which it is to come into force. An MD is also a director but with that he is an employer of the company as well in the form of a manager the tenure for which an MD can be appointed shall not exceed 5 years at once.

The substantial powers which are enjoyed by an MD are not to be exercised by a normal director. These power of management are entrusted upon the MD with an agreement or a resolution passed by members, Board of Directors, or by the Memorandums of Associations or Articles of Association of the company. Although to look whether the person is an MD or not one has to look into the position it holds and not the designation or name thereof. The Central Government may permit any person to be appointed managing director of more than two companies if the Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.

An Managing Director of Company is accountable to the shareholders of the company and also shall be responsible for the actions of the company thereof. As under section 269(1) a public company shall have an MD or an all-time director or manager to look over the operations. This excludes private companies therefore for a private company it is not mandatory to have an MD.

Therefore as seen before the job description of an MD is to look into the regular operations of the company and therefore he can do so without the prior permission of the Board of Directors and efficiently abide by its duties and responsibilities. Therefore, the managing director is usually considered to be a major player in organizational leadership, and is supposed to understand the major divisions in the company for efficient working of the same.

Author: This blog is written by Ms. Anmol Srivastava, student of Damodaram Sanjivayya National Law University, Visakhapatnam, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

Value Added Tax / CST in India

Value Added Tax

Tax is a compulsory contribution that is imposed by the government on the taxpayer for the services rendered in return by the same authority.It is a security taken by the government for which there is no exact amount decided in order to provide amenities to the people. Tax is there in every sector and therefore there are various types of taxes available. In this particular article the focus would be on VAT and CST tax.

VAT i.e. Value Added Tax is a multi-stage levied at each stage of value addition chain. VAT is levied to tax at every stage of sale where some value is added to the raw materials in order to make it a finished good. There is no ambiguity about double taxation as the taxpayers receive credit for the tax already paid in procurement of the stages. This aforementioned feature can also be called as an advantage as it is a multi-point tax with set-off for tax paid in purchases. This provides the government with the same revenue and lower rates. VAT is followed in over 160 countries and was introduced in the country to do away with the distortions in the earlier tax system. It is a form of indirect tax imposed on goods sold within a particular state. This tax can be imposed only on the tangible goods. All the states are provided with the plethora of rates ranging from 1 to 25 percentage. These taxes imposed by the states are governed by the respective state acts. VAT is basically a State subject, derived from Entry 54 of the State List Each and every state in the country has a separate and distinct VAT act reserved for their state which distinguishes their particular rates. The basic regime to levy VAT is, to multi-point levy on the price including value additions at each and every resale, the margins of either the re-seller or the manufacturer would be reduced unless the ultimate price is increased which would lead to the growth of the market to a one big open market rather than growth of large number of small markets. It is collected at every stage of the production and distribution. VAT registration is compulsory for dealers having turnover exceeding Rs. 5 lacks (or increased limit of Rs 10 lacks in some states). On the registration, every dealer is given a unique 11 digit Taxpayer’s Identification Number which is further how one is identified in the market. Taxes imposed under the name of VAT do not have any uniform rate. VAT follows a different practise of chargeability, where fulfilment of the following conditions generate chargeability:

• Existence of ‘goods’
• Sale of ‘goods’
• Within the state, i.e. both the buyer and seller should be in the same state.

India, is a union of states and the strength of our country lies in its ability to handle these states collectively, which is where Central Sales Tax comes into play, by eliminating any confusion regarding inter-trade tax. Inserted in the constitution through Constitution (Sixth Amendment) Act, 1956 the taxes are allowed on sales and purchases of goods in course of inter-state trade or commerce. Central Sales Tax has been a major source of revenue for the government since its inception and is considered crucial in Indian trade and commerce. This amendment authorized Parliament to formulate principles for determining when a sale or purchase takes place in the course of inter-State trade or commerce or in the course of export or import or outside a State. Accordingly the Central Sales Tax (CST) Act, 1956 was enacted which came into force on 05.01.1957. Originally, the rate of CST was 1%, which was increased first to 2%, then to 3% and w.e.f. 1st July, 1975 to 4%. The CST Act, 1956 Act provides for declaration of certain goods to be of special importance in inter-State trade or commerce and lay down restrictions on the taxation of such items. This Act mentions the definitions of inter-state trade, situations where CST is applicable, penalties involved, important goods for interstate trade, trade restrictions, appeals and any other information which might be relevant.

Some of the main objectives of Central Sales Tax Act are mentioned below.

• Provide provisions for levying, collecting and distributing taxes collected via interstate sale of goods and products.
• Frame policies to determine when sale and purchase of goods occurs, with reference to interstate commerce.
• Classifying certain goods as being essential and important for trade and commerce.
• Establish which competent authority will settle interstate trade disputes.

The entire revenue accruing under levy of CST is collected and kept by the State in which the sale originates. The Act excludes taxation of imports and exports. CST being an origin based tax, is inconsistent with Value Added Tax which is a destination based tax with inherent input tax credit refund. Therefore Central Sales Tax are imposed when goods are sold interstate i.e. the seller and buyer should be in different states and doing business with each other. The registration of the same is not dependent on amount of turnover. In other words the registration of the dealer becomes compulsory once he affects an inter-state sale. The chargeability of the CST tax runs parallel to the VAT conditions, i.e. there should be existence of ‘goods’, there must be sale of ‘goods’ but the third condition deferrers in the form that the same should be from one state to another (the buyer and seller should be in the different states).

Author: This blog is written by Ms. Anmol Srivastava, student of Damodaram Sanjivayya National Law University, Visakhapatnam, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Get free expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

WHY PRIVATE LIMITED COMPANY OR LLP IS PREFERRED?

WHY PRIVATE LIMITED COMPANY OR LLP IS PREFERRED?

For the business start-up, both private limited company and LLP are preferred. But when it comes about the comparison between the both, LLP is best suitable for start-up. The reasons why private limited company or LLP is preferred are as following:

1. Initially, the important preferential factors which is considered with the private limited company or LLP has with the advantage of limited liability and separate assets and liabilities, distinct from that of its promoters or directors.
2. The second preference is with the limited capital and as in LLP or private limited company they both can be raised easily.
3. With the growth prospects, usually the LLP or private limited company converts soon after starting their business as a proprietorship, to overcome the business of team work and resources.
4. The continuity of the business, which totally depends upon the proprietors, in the absence or unavailability of these proprietors, the business, will suffer the great loose upon the extent. Therefore, the business continuity is limited unlike a LLP or private limited company.Private limited company offers its promoters a better image or standing than that of LLP. Private limited company also enjoys better access to funding from bank and foreign direct investors.

In case of private limited company and LLP the preferential conditions will considered apart from above mentioned aspects too. Private limited company has been in existence for the longer than LLP’s and enjoy widespread recognition in India and the world. Therefore there are well established processes and procedure for private limited company.

LLP’s on the other hand is recently introduces in India. Therefore, some of the rules, regulations, process are still continuing to evolve. LLP’s are also not recognised in India as a private limited company, since it is relatively a new concept.

Private limited company offers its promoters a better image or standing than that of a LLP. It enjoys the better access to funding from banks and foreign direct investments.

Author: This blog is written by Ms. Deepshikha Dabi, student of Vivekananda Institute of Professional Studies, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

DOCUMENTS REQUIRED FOR SERVICE TAX REGISTRATION

 DOCUMENTS REQUIRED FOR SERVICE TAX REGISTRATION

When the turnover is cross 9 lac rupees it calls for service tax registration. Most of the people in sole proprietorship firm applies for registration of service tax certification in the beginning itself as a current bank account is required to be opened for such business but banks requires at least one legal certification on their firm.This article provides for a complete list of documents required for proper registration of service tax in India.

The following documents are required for registration-

• A self-attested copy of Pan Card of the Proprietor or company or LLP or any other legal entity is required to be submitted via post to the concerned division within 15 days of filing the form for verification purpose.
• Id proof and photograph of the applicant filing for registration, i.e.
• PAN Card,
• Passport,
• Voter Id Card,
• Aadhar Card,
• Driving Licence or
• Any other photo identity card issued by the Central Govt., State Govt., or Public Sector Undertaking.
• Bank account details.
• Address proof for the premise to be registered such as proof of ownership, lease or rent agreement, allotment from the government and no objection from the legal owner.
• Memorandum of association is required only for company.
• Article of association is required only for company.
• List of directors is required only for company.
• Authorisation by the Board of Directors/ Partners/Proprietor for the person filing the application.
• Business Transaction Numbers obtained from other government departments or agencies such as Customs Registration No. (BIN No.), Import Export Code (IEC) No., State Sales Tax No. (VAT) Central Sales Tax No., Company Index No. (CIN) which have been issued prior to the filing of the Service Tax Registration application.

Documents in the case of Private Limited Company :-

• Memorandum/ Articles of Association.
• List of Director with ID & Address Proof.
• Board Resolution regarding authorizing any director of the company to sign, deal and comply with provision of the service tax rules and regulations.

Documents in the case of Partnership Firm :-

• Partnership Deed Copy
• All the Partners ID and Address Proof.
• Business Transaction Numbers obtained from other govt departments or agencies such as State Sales Tax No. (VAT) Central Sales Tax No. which have been issued prior to the filing of the Service Tax Registration application.

Author: This blog is written by  Ms. Ankana Mukherjee , student of Dr. Ram Manohar Lohiya National Law University,(RMLNLU) Lucknow, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

Statutory Registers

Records provide a sense of regularity and prove as an evidence in the daily lifestyle. Everything is recorded in some way or another and thus it proves the authentication of that activity. With this in mind there was incorporation of Statutory Registers which are maintained by the company. These contain details of the directors, members, shareholders and many other people involved with the company in registers. These differ from country to country.

The Registers made under the Companies Act, 2013 need to maintained and updated with each changing event on a regular basis and should be kept at the Registered Office of the Company. Some of the Registers are to be kept open for inspection by the Directors, Members, and Creditors and by other persons of the company.Also the entries shall be authenticated by the Company Secretary or by any other authorised person by the Board for the purpose. In exercise of the powers conferred under various sections of the Companies Act, Companies (Management and Administration) Rules, 2014 were enacted.Following is the list of registers required to be maintained.

Register of Members(section 88 (1) and Rules of Companies (Management and Administration) Rules: Every company shall, from the date of its registration, keep and maintain a register of its members in one or more books in in FORMNo. MGT.1. under rule 3(1). There shall be a register of members indicating the shares held separately for each class of equity and preference shares residing in or outside India.

Every company which issues or allots debentures or any other security shall maintain a separate register of debenture holders or security holders, as thecase may be, for each type of debentures or other securities in FORMNo.MGT.2. In case of changes made in status of members or debenture holders and any other security holder the same entry shall be made in the respective register.

Index of names inclusion in Registers: Both the aforementioned registers shall include index of the names included therein. Also the register and index of beneficial owners maintained by a depository under section 11 of the Depositories Act, 1996, shall be deemed to be the corresponding register and index for the purposes of the Act.

Foreign Register: If the company is authorised to run its business outside India then in that case it shall maintain a register of Foreign shareholders, debenture holders etc. Also the company shall, within thirty days from the date of theopening of any foreign register, file with the Registrar notice ofthe situation of the office in FORM No.MGT.3 along with the feewhere such register is kept and in the event of any change inthe situation of such office or of its discontinuance, shall, within thirty days from the date of such change or discontinuance, asthe case may be, file notice in FORM No.MGT.3 with theRegistrar of such change or discontinuance. The register shall be in the norms as that of the country and the decision of the appropriate competent authority in regard to therectification of the register shall be binding. It shall be open to inspection and shall be treated as a part of the principle Register.

Register of Renewed and Duplicate Share Certificate: This registers shall be maintain under SH-2 indicating the names of the persons to whom the certificate is issued, the number and date of issue of the share certificate in part of which the new certificate is issued.

Register of Sweat Equity Shares: This Register shall be maintain under FORM NO. SH-3. This register shall also be kept at the registered office of company.

Memorandum of Association and Articles of Associations: These are the foundation stones of the company and provide for the basic objectives and ideas on which the company was laid down therefore they shall be permanently preserved and registered.

Register of Transfer & Transmission: The Company shall maintain Separate Register for Transfer & Transmission of Equity/ Preference Shares (Section – 56).

Register of Employee Stock Option: (Section 62(1) (B) Read with Rule 12): This Register shall be maintained under FORM NO. SH-6.

Register of Security Buy Back: (Section 68(9) read with Rule 17 of Chapter IV) This Register shall be maintained under FORM NO. SH-10.

REGISTER OF DEPOSIT: (Section 73 and 76 read with rule 14 of Companies (Acceptance of Deposit) Rules, 2014- The Company shall maintain register of deposit accepted or renewed.Entry in register shall be made within Seven days from the date of issuance of the receipt duly authenticated by appropriate authority. Register shall be maintain at least Eight year from the financial year in which the latest entry is made in the register. The particulars of the register shall include:

• Name, address and PAN of the depositors
• Particulars of guardian, in case of a minor
• Particulars of the nominee
• Deposit receipt number
• Date and the amount of each deposit
• Duration of the deposit and the date on which each deposit is repayable
• Rate of interest or such deposits to be payable to the depositor
• Due date for payment of interest
• Mandate and instructions for payment of interest and for non-deduction of tax at source, if any
• Date or dates on which the payment of interest shall be made
• Details of deposit insurance including extent of deposit insurance
• Particulars of security or charge created for repayment of deposits and any other relevant particulars.

Register of Charge: (Section 85 read with Rule-10 of Company (Registration of charges) Rules, 2014- This Register shall be maintained under FORM NO. CHG-10. This register of charge shall be preserved permanently. The Instrument creating Charge or Modification thereon shall be preserved for a Period of 8 (Eight) Year from the date of Satisfaction of Charge.

The aforementioned are the registers required to be maintained under the Companies Act 2013.

Author: This blog is written by Ms. Anmol Srivastava, student of Damodaram Sanjivayya National Law University, Visakhapatnam, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.

Shareholders Rights Under Companies Act

Company is a commercial business in which people work together in order to run that particular business. Managing or running a company is not a one man job, there are various peoples involved in the same one of such being the shareholders. Shareholder is an individual or a group of individuals that buy the stock of the company as a method of providing it with the capital. Amongst the man people involved in the company, shareholders hold an important role as they provide with the share capital and it makes them a member of the corporation. With reference to the percentage of shares held by one he is considered as the owner of that of the shares of the company. Shareholder is different from the corporation as they are not held to be absolutely liable for the debts of the corporation but to some extend there exists a liability. Legally one is not a shareholder until and unless the share is brought in and their name is registered as the shareholder of the company. As these individuals or institutions being referred to as shareholders invest their money in the shares they are members of the corporation, therefore making them entitles to certain rights in the company. Since everything nowadays is governed by law so is this provision providing rights to the shareholders. There are various rights that a shareholder enjoys under the Companies Act. Before talking about the shareholders rights one should know the kind of security they have invested in.

There is a hierarchical structure of rights that are embodies in the company which accompany the three main types of securities that the company issues. Those are Bonds & Debenture, Preferred Shares and Common Shares. Common shares are the ones which yield the most to the company but are also at the bottom of the chain. Debentures and Preferred Shareholders get more preference when the company is dissolved over the liquidation matters. Although there are certain drawbacks of being common shareholders but when there is profit to the business these shareholders earn their part too. Being a part owner of the company these shareholders enjoy certain rights also. These rights have been provided to protect the interests of the shareholders.

Shareholders since are the part owners of the company i.e. to the extent of the percentage of shares they hold, they have the right to vote. This vote is guaranteed to the shareholders as a benefit to them since they can vote regarding the major decisions which the company might have to take in order to run its business. Right to vote also includes right to elect directors in the Board of Directors. This is an essential right as the person who has the shares of the same company would want the best for the company with a personal gain and therefore it would lead to wise decision though a valid method of voting. This entitles the shareholders to vote in cases of fundamental changes that the company may go through like that of mergers or acquisitions.

As mentioned above in events of corporate liquidation Bondholder and Preferred Shareholders are paid first, whereas when the business earns profits the shareholders have a claim on something valuable i.e. their ownership. Their claim on portion of the assets benefit them, as the corporation earns profits from its assets it re-invests in more assets leading to increased value in the market name of the corporation, which in-turn increases the value of that particular company’s stocks making that company more profitable in the market itself. Further this increased value of the share brings us to the next right which is enjoyed by the shareholders, which is of transferring the shares. This right is vested with the shareholder as they make profits by the same. Once a market value of a stock is increased due to the profits earned the Shareholders sell their shares and this leads to the amount on which sales made minus the amount at which it was purchased, making a profit. Apart from the profit the liquidity provided by stock exchange is a beneficial act which helps the Shareholders to cash-out the same. Also for people interested in the company activities and having a voting right in the company, the transfer makes it easy to be the owner of the shares and accomplish the same. Times when the company earns profits and decides not to re-invest but to give the profits to the shareholders, the shareholders are entitles to get their amount. Though the percentage of profit to be given out to the people in the form of dividends is decided by the Board of Directors but a shareholder is entitled to that dividend. All these add value to the shares.

With all the rights against the profits the shareholders also acquire the rights to inspect the corporate books and records of the company. Public Limited Company are required to submit their annual reports already but for the private companies it is a game changer.

Therefore the aforementioned are the few rights provided by the government. Also with all these every company has a particular set of rights but these are the most essential ones to be kept in mind.

Author: This blog is written by Ms. Anmol Srivastava, student of Damodaram Sanjivayya National Law University, Visakhapatnam, a passionate blogger & intern at  Aapka Consultant.

How Aapka Consultant can help you:-

• Getfree expert consultancy from experts.
• We available every time to solving your legal queries.
• Get one stop solution for all legal compliances.
• Process application within 24 Hours.
• Trusted by Most Valuable Startups.
• We Understand Startup Budget & their needs.
• Get quality services at pocket price.

Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.