1.Difference b/w private nd statutory company????
2.What is memorandum of association????
3.Four types of taxes???
(1) The Difference between Private & Statutory Company ?
A
Private Limited Company is usually owned by a small number of shareholders & its shares are not traded on the Stock Exchange i.e they are not open to public acquisition !
A
Public Limited Company on the other hand is usually owned by a large number of shareholders & its shares
ARE traded on the Stock Exchange with the general public being one of its many shareholders.
A
Statutory Company on the other hand is a company created through 'Statute' or an Act of Parliament. Its Directors are wholly appointed by the Government, it is wholly Government owned & it answers to the Parliament. Its shares are not available to the General Public.
For Example; the Oil & Gas Development Corporation Limited (OGDCL) was created through an Act of Parliament in 1961 as OGDC & was made a Public Limited Company in 1997 i.e its shares were offered to the General Public.
(2) What is a Memorandum of Association ?
It is essentially a document that is required to be prepared at the time of the birth of a company or in other words at the time of its incorporation. What this document essentially states is that the subscribers (or the founders) want to create a company as its members, that the company would have a share capital (i.e owner's funds) & that each of its subscribers/members would own at least one share in the company.
It along with the Article of Association (a document that lists the rules, the regulations & the agreements by which the company would be governed) form the Constitution of a Company.
(3) What are the four types of Taxes ?
(a) Income Tax (tax on an individual's taxable income)
(b) Corporation Tax (tax on a company's taxable profits)
(c) Capital Gain's Tax (tax on the income obtained from the sale of non-inventory taxable asset i.e if you were to be a Doctor & you sold a car the tax levied on the sale of that car would be capital gain's tax & not income tax because your normal profession is medical practice not selling cars hence the income from the sale of your car would not be included as part of your income & tax accordingly but will be considered as income from the sale of a non-inventory taxable asset & taxed according to the rate of tax applicable to Capital Gain's Tax)
(d) Inheritance Tax (the tax on assets inherited by you from a deceased relative. For example if you were to inherit a 1 kannal plot from an Uncle that just died then the Government would tax you at a particular tax rate on a particular amount & the resultant tax that you are to pay would be called Inheritance Tax)
The Differences between these 4 lie in :
(i) the way in which 'taxable income' is calculated in each of the different types of taxes.
(ii) the 'allowances' & 'exemptions' given by the Government (Federal Bureau of Revenue) in each of the different types of taxes.
(iii) the rate at which the tax is calculated i.e @20% of Income or @13% of Income ! And this rate varies from one type to another.
P.S I studied this a while back & my accounting was always pretty lousy so forgive me if I've made any mistakes therein !
