Definition: Public Deposit can be described as a form of short-term financing, often unsecured in which the company invites deposits from the general public to fulfill its working capital requirements. In this, the general public, deposits money with non-banking companies. It is just like a loan raised by the company from the public. Here, the word public is an umbrella term … [Read more...] about Public Deposits
Discount
Definition: Discount implies a concession or deduction allowed at a specified rate from the price of the goods given by the seller to the buyer or by the creditor to the debtor. It is given to lure customers and promote sales. The amount of discount must be received or paid with regard to the terms of the sales agreement. Here, it is to be noted that discount is always … [Read more...] about Discount
Shell Company
Definition: Shell Company implies a fictitious company with no active business operations. These companies are formed with an aim of achieving specific business objectives which may or may not be legitimate. Such companies do not have a physical existence, as they exist only on paper. Meaning that it has no office, no staff, no assets, but just a bank account, to carry out … [Read more...] about Shell Company
Dishonor of Negotiable Instrument
Definition: Dishonor of Negotiable Instrument refers to the state when the party who has to pay the sum in an instrument fails to honor it. In other words, it implies the loss of honor for the instrument indicating the unsuitability of the instrument to realize funds. Types of Dishonour On the dishonor of the negotiable instrument, the holder of the instrument must issue a … [Read more...] about Dishonor of Negotiable Instrument
Right Shares
Definition: Right Shares or Right Issue implies an invitation to the company's existing shareholders to buy additional new shares through a Letter of Offer. These shares are introduced, at a discounted price, i.e. the price at which the company's existing shareholders will buy the shares is lower in comparison to the market price of the shares. In general, the company brings … [Read more...] about Right Shares
Bonus Shares
Definition: Bonus Shares imply the free additional shares given to the existing shareholders, depending on the number of shares held by them. Bonus shares are the accumulated earnings of the company which are not given as dividends, rather they are transformed into free shares. It occurs when the company does not distribute profits, in the form of dividends, rather than it … [Read more...] about Bonus Shares
Core Banking
Definition: Core Banking is an umbrella term that refers to the services rendered by a range of networked bank branches. It is a back-end system through which banking transactions related to deposit, loans, and credit can be processed daily across different bank branches, and updates are recorded and reflected immediately. Core banking is a business carried out by the bank with … [Read more...] about Core Banking
Sinking Fund
Definition: Sinking fund refers to a specific reserve fund, in which money is earmarked and accumulated over time, for the purpose of redemption of debt, bond, and also for the replacement of a wasting asset. It is obligatory to invest these funds outside the business because when the maturity of the underlying debt becomes due, funds can be availed easily by selling the … [Read more...] about Sinking Fund
Forfeiture of Shares
Definition: Forfeiture of Shares or Share forfeiture is a process in which the company's directors annul (cancel) the rights of a shareholder, who has not paid the call money due on time when the company demands and, even after receiving the notice for such non-payment. Conditions for Forfeiture of Shares There are certain conditions that are to be met before the forfeiture … [Read more...] about Forfeiture of Shares
Sweat Equity Shares
Definition: Sweat Equity Shares refers to the equity-linked instrument which a company issues to its employees or directors for providing their knowledge and expertise or making available the intellectual property rights or value addition to the business. Such shares are issued at a discount or for consideration other than cash. It is like compensation to the top management … [Read more...] about Sweat Equity Shares