Friday, 20 September 2019

Money laundering stages

Three Stages in the Money Laundering Cycle::



Money laundering often involves a complex series of transactions
that are usually difficult to separate. However, we generally
consider three phases of money laundering:
􀂄 Step One: Placement — The physical disposal of cash or
other assets derived from criminal activity.
During this initial phase, the money launderer introduces
the illegal proceeds into the financial system. Often, this is
accomplished by placing the funds into circulation through
financial institutions, casinos, shops and other businesses,
both domestic and international. This phase can involve
transactions such as:
􀂉 Breaking up large amounts of cash into smaller sums and
depositing them directly into a bank account.
􀂉 Transporting cash across borders to deposit in foreign
financial institutions, or to buy high-value goods — such as
artwork, antiques, and precious metals and stones — that
can then be resold for payment by check or bank transfer.

􀂄 Step Two: Layering — The separation of illicit proceeds from
their source by layers of financial transactions intended to
conceal the origin of the proceeds.
This second stage involves converting the proceeds of the
crime into another form and creating complex layers of
financial transactions to disguise the audit trail, source and
ownership of funds.
This phase can involve transactions such as:
􀂉 Sending wire transfers of funds from one account to
another, sometimes to or from other institutions or
jurisdictions.
􀂉 Converting deposited cash into monetary instruments (e.g.
traveler’s checks).
􀂉 Reselling high-value goods and prepaid access/stored
value products.
􀂉 Investing in real estate and legitimate businesses.
􀂉 Placing money in investments such as stocks, bonds or life
insurance

􀂉 Using shell companies or other structures whose primary
intended business purpose is to obscure the ownership of
assets.

􀂄 Step Three: Integration — Supplying apparent legitimacy to
illicit wealth through the re-entry of the funds into the
economy in what appears to be normal business or personal
transactions.
This stage entails using laundered proceeds in seemingly
normal transactions to create the perception of legitimacy. The
launderer, for instance, might choose to invest the funds in real
estate, financial ventures or luxury assets. By the integration
stage, it is exceedingly difficult to distinguish between legal and
illegal wealth. This stage provides a launderer the opportunity
to increase his wealth with the proceeds of crime. Integration
is generally difficult to spot unless there are great disparities
between a person’s or company’s legitimate employment,
business or investment ventures and a person’s wealth or a
company’s income or assets.

Wednesday, 18 September 2019

Difference between company and partnership

Partnership and Company are the most familiar terms for the people who are pursuing business education or commerce education. Besides being very familiar, many of us can’t able to correctly differentiate these two forms of business. This article presents you the top differences between Partnership Firms and Companies.

PARTNERSHIP

Indian Partnership Act, 1932 defines Partnership as ” Partnership is a relationship between two or more persons who have agreed to share the profits of a business carried on by all partners or any one partner acting for all”. The members of the Partnership firm are called as Partners. There are different types of partners such as Active partner, Sleeping partner, Nominal partner, Minor partner, Etc.

Partnership Frim is created by agreement between two or more people by registering the partnership firm with Registrar of Firms according to Indian Partnership Act, 1936.

Registration of a partnership firm is very simple process and Application for registration of firm must contain the following details

✔ Name of the firm

✔ Names of the partners and their addresses

✔ location where the business is carried on.

✔ Partnership tenure between the partners

✔ The main office of the firm, etc.

COMPANY

Indian Companies Act, 2013 defines Company as ” A Company formed and registered under this Companies Act or under any previous company law”. A company is defined easily as an association of two or more persons which is formed for doing business collectively and registered with Registrar of Companies according to Indian Companies Act, 2013.There are different types of companies like One Person Company, Private company and Public Company, etc.

To get registered with Registrar of Companies, the promoters are required to submit the copies of Articles of Association and Memorandum of Association which consists of various information relating to internal management and external management of the company.

The company exhibits certain special characteristics, such as

✔ It have a Separate Legal Entity

✔ It contains Common Seal under its name

✔ It has limited liability

✔ It acts as an artificial person, Etc.

COMPARISON

PARTNERSHIP COMPANY

The members of the Partnership firm are called as Partners. The members of the company are called as shareholders of a company.

 Enacted by

Partnership Form of business is governed by "The Indian Partnership Act, 1932." Company Form of business is governed by "The Indian Companies Act, 2013”.

 Number of Members

Partnership firm must have Minimum of 2 partners and maximum of 20 partners. A Company must have Minimum of 2 and maximum of 200 in the case of private company. Minimum 7 and maximum is unlimited number of members in case of public company

 Created by

Partnership Firm is Created by Contract between two or more people. Company Firm is Created by Law i.e created by incorporation of a company under company law.

 Regulation Authority

It is regulated by the Registrar of Firms which comes under State Government. It is regulated by the Registrar of Companies which comes under Central Government.

 Registration procedure

The registration of a Partnership firm is Not Mandatory. The registration of Company with Registrar of Companies is Mandatory.

 Documents Required

Partnership Deed(Agreement Document) is the mandatory document for creation of a Partnership Firm. Memorandum of Association(MoA) and Articles of Association(AoA) are the main documents to the incorporation of the company.

 Separate Legal Entity

Partnership firm is not a separate legal entity from partners. The Partners of the firm are collectively referred as a Partnership firm. A company is a separate legal entity, It is a separate entity from its members, directors, promoters, etc.

 Liability of Members

The partners have Unlimited Liability in all the matters relating to Partnership Firm. The Shareholders and promoters have Limited liability to Capital of the company.

 Accounts and Audit

Partnership Firm has to maintain accounts as per the conditions stated in partnership deed. A Company should maintain accounts and auditing of accounts by certified Chartered Accountant are Compulsory.

 Common Seal

A Common Seal is not required for Partnership Firm. A Common Seal in the form of a stamp is required for the company for legal and functional purposes.

 Management

Management of the activities of a Partnership Firm is usually done by the working partners. Management of the activities of a Company is done by Board of Directors.

 Change of Name

The name of the Partnership Firm can be changed easily by having a discussion between partners. The name of the company cannot be changed easily and a prior approval of Central Government is required to change the name.

CONCLUSION

The Indian Partnership Act, 1932 laid down certain rules and regulations on matters relating to Rights of partners, Liabilities of Partners, Duties of Partners, etc. Indian Companies Act, 2013 laid down various principles relating to the functioning of companies to protect the shareholders and investors of companies. Both Partnership and Company form of businesses is very prevalent in the world.

Companies and partnership act

COMPANIES & PARTNERSHIP ACT

1. A modification of charge under Section 125 of Companies Act, 1956, is registered by using which

Form Nos. Form Nos 8 & 13. The revised system for registration of charge with ROC is through

Electronic mode – MCA 21 (E-filing)

2.While granting advances to a company with charge created on securities which require registration

under Section 125, what is to be seen as a banker? As a banker, we should ensure that there is no

prior charge on the same securities by inspecting register of mortgages and charges at the office of

registrar of companies

3.Under Section 125 of Companies Act, a charge created by a joint stock company is required to be

registered with whom? With Registrar of Companies (ROC) under whose jurisdiction company’s

registered Office is located.

4. Which of the following charges is required to be registered with ROC under Section 125 of

Companies Act?

Charge on Plant & Machinery, hypothecation of stocks, furnitures and fixtures, stores, spares, EQM,

Registered Mortgage etc

5. M/S ABC Corporation Ltd borrowed from IOB on the security of plant and machinery by executing

loan papers on 22.10.08. The company borrowed from Canara Bank against the hypothecation of

same machinery by executing loan papers on 29/10/08. Canara Bank got their charge registered on

5.11.08 and IOB got their charge registered on 10.11.08. Who will get precedence in this case?

Charge of IOB will have precedence. Both the banks have registered their charge with ROC within the

stipulated time of 30 days, the date of execution of loan papers by IOB is earlier and hence IOB will

have the precedence.

6. The Board of Directors of a company can exercise powers to borrow money in excess of limit

specified in Section 293 (i) (d) provided - Such a resolution is passed in general body meeting of

share holders.

7. An advance to a limited Company does not require registration of charges with Registrar of

Companies if the advance is in the nature of Pledge (Effective possession is within the bank)

8. Execution of security documents by a Limited Co. should be - By affixing common seal only if

required by Articles of Association.

9. The effect of Non Registration of charge within the time limit is that Advance becomes an

unsecured advance.

10. Registration of the charge under Companies Act in the following case is not required- In case of

physical possession is delivered (IF NO COLLATERAL SECURITY OF STOCK, IMMOVABLE PROPERTY IS

TAKEN) In case of Hypothecation, Mortgage and book debts, registration is required.

11. The ceiling imposed by Companies Act, 1956 for a public Limited Company to borrow from banks

under Section 293 (1) (d) is Paid up capital + free reserves

12.The resolution of a company to borrow from a bank must be passed by whom? Resolution in a

Board Meeting

13. In case of private limited company loan document should be executed by - The delegated

authorities as per board of Directors.

14. A public limited company is sanctioned guarantee limits (performance guarantee) against

mortgage of land and building belonging to the company. As per lawyer‘s opinion instead of equitable

mortgage registered (simple) mortgage was put through; whether registration of charge is required?

Required. Charge is to be registered with the Registrar of Companies in case of EQM/Regd Mortgage

of company’s properties.

15. In the case of a company advance, what is the position of a secured creditor? Can stand outside

the winding up and satisfy his debt out of the property charged without proving his claim before

the liquidator

16. The winding up order of a company is effective from - Date of petition of winding up

17. Whether a secured creditor of a company can file a winding up petition despite the creditor

having security? YES.A Secured creditor of a Company can file a winding up petition despite the

Creditor having security.

18. In the case of a partnership firm, mandate may be revoked - By any Partner.

19. Partnership is to be registered with before advance is granted to customer - Registrar of Firms

20. If the partnership firm is not registered, what is the implication? The firm cannot sue others

legally

21. In case of a conflict in the operations condition of a firm‘s account, the provisions contained in

the following document will prevail- Partnership Letter to the bank

22. In the case of a mortgage transaction of a property standing in the name of the firm, the

mortgage papers have to be executed by All the partners of the firm (or by the partner who

has been specifically Authorized to execute mortgage papers by all the remaining

partners).

23. X and Y are authorised to sign cheque on behalf of the firm. A cheque dated 10 1 04 duly signed

by them is presented in clearing on 17 1 04. X expired on 14 1 04. Bank loses protection if paid

24. One of the partners of a firm has become insolvent. What should be done if a cheque drawn by

other partner is presented for payment? The cheque should be returned with the remark, “Refer to

drawer”

25. A HUF directly or indirectly cannot become partner of a firm because The firm is an association of

individuals. HUF is a floating body whose composition changes by births, deaths, marriages and

divorces. A HUF is not being “a legal person” cannot enter into an agreement of partnership. Hence

HUF cannot become partner of the firm.

26. Whether Branches are required to open current/TD accounts of partnership firms where one or

more of the partners are HUF - Cannot open CA/TD account.

27 What precautions branch is required to take in respect of partnership accounts already opened

where one or more of the partners are HUF. The branch should exercise caution in the transactions &

take Undertaking letter duly signed by all the co-parceners and Kartha.

28 Whether finance can be provided to Partnership firms where one or more of the partners are HUF

– No

29. Simple mortgage is to be registered with which office With Sub - Registrar of assurances under

whose jurisdiction the mortgaged property is situated

Sunday, 15 September 2019

6 inspiring quotes by Sir Mokshagundam Visvesvaraya

6 inspiring quotes by Sir Mokshagundam Visvesvaraya



An engineer is considered to be the one who creates the world which has never been. And for all those outstanding engineers, an Engineers Day is celebrated in India on September 15 every year as a tribute to India’s greatest engineer and Bharat Ratna, Mokshagundam Visvesvaraya. Born on 15 September 1861 in a Telugu speaking family, Sir Mokshagundam Visvesvaraya was an Indian engineer, scholar, statesman, and the 19th Diwan of Mysore. For his magnificent works as an Engineer,  he received India’s highest honour, the Bharat Ratna, in 1955. The intricate system of irrigation in the Deccan area, flood protection system in Hyderabad and KRS Dam across the Kauvery River in Karnataka are some of his renowned works. The great man is not just famous in the field of engineering but also for his quotes. Here are 6 famous quotes of Sir Mokshagundam Visvesvaraya on the occasion of Engineers Day.
#1 “Self-examination not moral or spiritual, but secular – that is, a survey and analysis of local conditions in India and a comparative study's of the same with those in other parts of the globe.”

#2 “Mental energy is wasted in caste disputes and village factions.”
#3 “It is better to work out than rust out.”
#4 “Self-examination not moral or spiritual, but secular – that is, a survey and analysis of local conditions in India and a comparative study of the same with those in other parts of the globe.”
#5 ” The way to build a nation is to build a good citizen. The majority of the citizens should be efficient, of good character and possess a reasonable high sense of duty.”
#6 ” Every man who has become great owes his achievement to incessant toil