Cash is kind, very right said. Cash is very important for all the businesses. Funding is one of the key responsibility of an Entrepreneur, Business Owner and Corporate CEO. Well funded businesses grow much faster and help maintaining good morale and motivation level of all (employees, vendors and associates) this result in best in class product / service delivery, happy customer, happen creditors, vendors etc. Whereas, a cash-starved business struggle through many difficulties and result in lot of employees and vendor dissatisfaction, poor customer delivery, unhappy customer and can lead to business closure. Therefore, adequate funding lines is of paramount importance for every business. volody.com understand funding need for each business and can suggest suitable funding solution based on requirement, duration, interest cost, purpose, collateral and repayment capacity. A business can avail any of following funding facility from institutions :
Equity Capital
Equity capital is one of the widely used funding option, however, normally treated as most risky and for start-up business entrepreneur puts his own or taken from friends and families. Angel Funds, Seed Funds and Venture Capital firms also invest in equity capital. An equity holders right in the company is established through shares, with each share representing a part ownership of the company. Equity shareholders are allowed to participate and vote in the shareholder’s meeting along with the prospects of sharing the profits of the company through dividends or share value appreciation. The rights or shareholders are governed by Article of Association.
Equity capital is one of the most sought after forms of funding, while also being the costliest. Further, an adequately capitalised company through equity capital is critical for maintaining financial health of company, meeting financial, business and capital commitments. This also helps in availing loans from banks and financial institutions.
Preference Share Capital
Preference share capital is another popular type of equity funding which provides the investor with preferential shareholder treatment and fixed returns. Preference share capital normally require a fixed dividend to be provided every year for each of the preferred share, thereby equivalent to a nature similar to that of a loan from bank or financial institution. After the maturity of time as per the terms between the investor and company, preference shares are usually with some return expectation and redeemed to provide the investor with a increased bullet payment at the end. Preference share capital can also be redeemed in tranches to make the funding similar to that of a loan. As per provisions of The Companies Act, 2013 all preference shares be redeemed within 20 years.
Business Loans from banks
Business loans are among the easier form of funding for a business. Banks in India have well document procedure for providing credit/loan facilities (funded and non-funded) to start-ups, small and medium businesses (SMEs) and existing businesses and provide financing to a large number of businesses across the country. Therefore, it is important for all entrepreneurs to consider business loans from banks as a possible option and take help of volody.com to help you guide through the process and preparing your documentation to make things easier and faster. Bank provide business loans based on credit worthiness, cash flows, business strength and capital base. Business loans are secured and unsecured. Banks takes security in the form of fixed deposit, property mortgage, pledge of share and debentures, gold, fixed assets, receivables, stock, inventory and personal guarantees of entrepreneurs
Cash Credit Facility
Cash credit facility is a form of short-term funding to meet day to day fund requirement of business and it is used for maintenance of inventory of raw materials, semi-finished goods, finished goods, stores and spares etc. In trading concern the requirement of funds is to maintain adequate stocks in trade. Finance against such inventories by banks is generally granted in the shape of cash credit facility where drawings will be permitted against stocks of goods. It is a running account facility where deposits and withdrawals are permitted. Cash credit facility is of two types (depending upon the type of charge on goods taken as security by bank).
Overdraft Facility: Overdrawing permitted by the bank in current account is termed as an overdraft facility. Overdraft may be permitted without any security as ‘clean overdraft’ for temporary periods to enable the borrower to tide over some emergent financial difficulty. ‘Secured overdraft’ facility is against fixed deposits, NSC, and other securities.
Commercial Paper (CP)
Commercial Paper is an unsecured money market instrument issued in the form of a promissory note, was introduced in India in 1990 with a view to enable highly rated large corporate borrowers to diversify their sources of short-term borrowings and provide an additional instrument to the investors and provide funding to corporates.
External Commercial Borrowing
External Commercial Borrowing or ECB is a loan or debt raised from a international organization. External commercial borrowing could be commercial loans, buyers credit, suppliers credit and/or other forms of loan provided by a foreign financial institution or supplier or investor in the Company. ECBs can be raised by businesses in India for purpose including import of capital goods, new projects, modernization of existing projects, etc., ECB in India are governed by Reserve Bank of India regulations and approved under the automatic route or approval route.
Debentures / Bond
A debenture / Bond is an instrument executed by the company acknowledging indebtedness to entity to secure the funds. Debentures / Bonds provide long-term funding for a company in the debt form. Debentures can be classified into secured debentures or unsecured debentures. Debentures can be issued by a company after obtaining Certificate of Commencement of Business, if permitted by the Articles of Association of the Company and approval of Board of Directors.
Please visit volody.com to avail our services for availing loan, equity and other financing requirement for your business. We will help assisting you in guiding you right form of funding your business require and connect you to financier in fulfilling your funding need. We will also help you in making your business plans, financial models and project report. We are tech enabled one stop destination for all services of CA, CS and Lawyers. We can help you preparing your income statement, e-file your tax return and assisting you in refund in case its due.
Legal Documents for day to day use by individuals
General Power of Attorney (POA)
The Power of Attorney is executed on a non-judicial stamp paper of the requisite value as per the stamp duty prevalent in the respective state (Rs. 100 in the State of Maharashtra). The purpose of General Power of Attorney is to authorise someone to act on your behalf to execute financial transaction including selling asset or property.
Power of Attorney should be legally drafted to ensure that the transaction executed through use of Power of Attorney is valid and pass the test of law. It is essential that a power of attorney is drafted / provided by qualified expert. volody.com can assist you drafting General Power of Attorney for your requirement.
It is important that each page of the Power of Attorney is to be signed and wherever the blanks are filled in initialed by the Grantor (applicant executing the POA). The POA should be signed by the Attorney on the last page.
(WHEN POWER OF ATTORNEY IS EXECUTED OUTSIDE INDIA BY NON-RESIDENT
INDIANS)
- The Power of Attorney should be first typed on a plain sheet of paper. Each page of the Power of Attorney is to be signed and wherever the blanks are filled in initialed by the Grantor (applicant executing the POA).
- The signature of the Grantor the should Grantor should be attested by any authorised official of the Indian Embassy / Indian Consulate / Trade Commissioner of India in India / Notary Public / Registrar in the country where the Grantor resides.
- It is mandatory that the Power of Attorney should be notarised by a Notary Public.
Attestation are based on applicable laws of respective State. Please do write to us at volody@volody.com and we will assist you in completing the process. These officials will have to affix their stamp and signature on the Original POA. If the stamp of the Notary Public does not bear his name, then principal office address and notary registration number must bewritten by hand.
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Affidavit
An Affidavit is defined as a written statement of fact voluntarily made by a person under an oath or affirmation administered by a person authorized to do so by law. Such statement is witnessed as to the authenticity of that personal’s signature by a taker of oaths, such as a notary public or commissioner of oaths
As per legal definition an Affidavit shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing.
Affidavits are very common and are filed almost in our daily lives It has been assumed and presumed that whatever assertion is stated by a citizen by way of an affidavit, can be believed to be true and necessary action can be taken against. Affidavits are required for starting a private limited company, passport application, birth certificates, various registration and to obtain a lost document etc.
Please visit volody.com and request for preparing affidavit as per need and we will assist you in preparing Affidavit for you and guide you on contents and stamping requirement. We are tech enabled one stop destination for all services of CA, CS and Lawyers.
Please visit https://volody.com/ to avail the services.
