What type of Business entity to open when a business is started?

A very Good Day to all the Business Entrepreneur,

Very often we come across the question that what type of business entity we should be creating.
We must have also thought about the same when we have started our own business entity...

But here i would like to focus on the fact the other way round, that what based on my experience of almost a decade in this Industry, we should avoid.

To start with lets understand what a business man should consider / thinks as long term goal when starting a business and what comes inherent along with a business:
1. Long Term Goal to create a Brand
2. Earn from the business
3. Unsecured Liabilities
4. Secured Liabilities
5. Fixed Assets
6. Other Assets
7. Valuation of Business
8. Pass on the Business to Next generation or expansion through collaboration
9. and many more...

We are having the following options to proceed with i.e. namely
1. Individual Name
2. Propreitorship
3. Partnership Firm (Registered or Unregistered)
4. Private Limited
5. Public Limited
6. Limited Liability Partnership firms
7. One Person Company

Based on our opinion, we should avoid using option 1 and 2 as mentioned above for the very reasons as mentioned below:
1. Business liabilities are also considered as your Individual liability. Since both you and your business carry same PAN which is key for Income Tax or any Financial Institution
2. Legacy of Business name cannot be carried forward since the same is your proprietory concern. If you add partners (Through MOU or Verbal), the sense of ownership may not come.
3. Business Assets and Personnal assets are all remains segregated
4. Any Scrutiny from any department shall be restricted to your business assets and liabilities but in case of option 1&2, since no final separate books, it is likely to come in ambit of scrutiny also
5. Transparency in working is reflected
6.  Financial benefit in terms of more likely to get financial assistance
7. and Many other...

So before I end, the question is, if it is possible, should not we segregate all our personal assets and liabilities with business assets and Liabilities?

Regards,
Team Palankarta

Why Mutual Funds ?

       WHY MUTUAL FUNDS ?

           What is Mutual Funds?

• Mutual Funds is  basically a tool provided  by the Asset Management Companies (AMC), also called as Fund House, through which an Investors can invest in Equity market or a Debt Market, separately or together as the case may be. 
• There are several AMC's present in India like ICICI, HDFC, Aditya Birla, Kotak Mahindra,etc.

          How it Works?

• Every Investor pools their money with AMC's, where the AMC appoints an expert which is also called as Fund Manager having a past experience of the security market;  for managing the funds of the investors.
• Fund Manager according to his expertise and the predefined goals of the investors park the Investments in the appropriate securities.
• The Invested securities then generates returns after a certain period of time on the pooled money, from which the AMC after deducting the fund management charges i.e. Expense ratio returns back to the Investor account.

          Benefits of Mutual Funds

• Since Mutual Funds, allows investment in many securities together, so providing the benefit of diversification.
• As the amount of investors is managed by the Expert, thus provides the safety and expertise during the investments.
• Overall expense ratio as compared to direct investment is less, since managing huge funds.
•  Since the investment is in diversification mode , hence less risk high returns.
• All the fund houses is ultimately governed by SEBI, hence transparency in investments in ensured.

       By,

       Team PalanKarta

       India

       For any query or concerns on the same, you can reach out to us at contactus@palankarta.com.

       Follow us on You Tube for update https://youtu.be/dpXXBTGjWgk

Who is an Accountant? Myths about an accountant

Who is an Accountant ?   Myths about an accountant

We generally come across the need for an accountant in an business organisation.

But do we actually know who is an accountant?

There are certain certain Myths about who can be an accountant

1. Accounting is only about debit and credit, thus if any person can pass Debit or credit entry in Tally is an accountant

2. Accountant is one who can prepare the balance sheet that is both assets and liabilities side are matching with each other

3. Accountant is some one who comes to your office on an every weekly, fortnightly, bi-monthly, monthly to pass entries.

4. Accountant is one who prepares cheques, make cash / Bank voucher, prepares Bank reconciliation, creates Ledger accounts and other similar matter.

5. Accountant is one who deposit cheques in your Bank, withdraws cash from Bank?

Certainly, all of the above are myths. Rather accountant is the one who

1. Can prepare complete financial statement with proper groupings of expenses, debtors, creditor, and other and also classification in Books of accounts.

2. Can prepare complete management information system reports as per the needs to the business owners

3. Can understand the final Impact of any entry that is posted in Books of accounts

4. Can help the management in drafting all the response to the Notice that are received from any Statutory department

5. Can assist in Audit of Financial Statement at the time of Statutory audit and/or Tax Audit and/or any other Indirect Tax audit thus ensuring all the data being filed in correct.

Before we end, It is Important to understand the value of accountant. This is Indirect cost but helps in reduction of most of the other business cost if used Effectively and efficiently.

Thanks you,

Team Palankarta

Do you need an Accountant? Physical Accountant at your office or Virtual Accountant?

Do you need an Accountant? Physical Accountant at your office or Virtual Accountant?

We come across following statement very often:

1. Yaar Koi Acha Accountant de do
2. Koi Acha Accounting staff nahi hai
3. Accounts ki reports time pe nahi aa rahi hai
4. MIS time pe nhi ban raha hai
5. Mere pass Debtor and Creditor ki list updated nahi hai....


But do you think companies actually need a accountant in person for there organisation?

In the present Era of Digitization, it is very Important for the company / Business houses to switch to virtual accounting system. Virtual accounting in simple terms is an accounting system where:

1. All your accounts are updated on Virtual accounting package thus giving access to the client on real time basis for there books of accounts
2. All your Physical documents are stored on cloud storage system thus safe and secure
3. Business owner can get the profit and loss account statement and statement of assets and liabilities at the click of a single button
4. Virtual consultation with experts is also provided to resolve any query
5. You can access your books of accounts on your Mobile through a Mobile Application
6. All your necessary statutory reports can be accessed any time
7. Exception reports are also provided by the system
and Many other feature

Thus, Essentially, the future of accounting is Virtual Accounting. Considering the large scale Impact of COVID 19 on business, it is better for business houses to shift there accounting from present physical accounting to virtual accounting which does not require any in person exchange of documents between 2 members.

Before ending this blog, i would like to mentioned only one thing, Business house can either adapt to changing accounting environment with comparatively lower cost or continue with the same physical set up with higher cost and risk. choice is yours.

By,
Team PalanKarta
India

For any query or concerns on the same, you can reach out to us at contactus@palankarta.com.

Follow us on You Tube for update https://youtu.be/dpXXBTGjWgk

High Value Transactions and also worried about Income Tax Notices

HIGH VALUE TRANSACTIONS

Worried about Income Tax Notices????

Do you all know there are some transactions entered by us which are closely monitored by Income Tax Department . These transactions which are done in high denominations are called High Value Transactions . All banks, Financial Institutions , Credit card Companies, NBFC are required to report these transactions to the Govt in Annual Information Return (AIR) filed by them .

Here we are going to tell you some HighValue Transactions which are tracked by income Tax Department and due to which chances of getting notices from Department increases phenomenally.

1  Savings Account- Cash Deposits aggregating to   Rs 10 Lakh or more  yearly in single account.

2. Current Account -Cash Deposits aggregating to Rs 50 Lakhs in Your single  Current A/c .

3. FDR- If you have made  Fixed Deposits or Term Deposits of Rs 10 Lakhs or more during the year  through any mode whether it is cash or through banking channel then there are chances of getting    notice from department . This amount does not include renewed FDR.

4. Foreign Currency-  Any expenses in Foreign currency via debit card, credit card card or traveler's cheque for an amount exceeding Rs 10 Lakhs

5. DD/ Pay Orders- Payment in cash of Rs 10 Lakhs more for purchase of DD and Pay Orders .

6. Immovable Property- Purchase or Sale of any Immovable property of Rs 30 Lakhs or more .

7. Credit Card- Credit card payment aggregating Rs.2 Lakh or above in a year is also considered as high value transaction

8. Shares- A receipt of amount Rs.1 Lakh or above in a year for the purchase of shares issued by the company.

9. Bonds/ Debentures- A receipt of amount aggregating to Rs.5 Lakh or above in a year for the purchase of bonds, debentures.

10.Mutual Funds-  Receipt from any person of an amount of Rs. 2 Lakh or above for purchase of units of a Mutual Fund . 

Hence it is advisable to be very vigilant and cautious when you enter into above transactions . Every high value transaction is linked to your PAN Card and complete information is available in Part E of 26AS. 

Regards,
Team Palankarta
Follow us on You tube  https://youtu.be/dpXXBTGjWgk

Want to Start a New Business ? But Don't know how to Start ?

WANT TO START A NEW BUSINESS? 
BUT DON'T KNOW HOW TO START? 

If you want to start a new business, but don't know how to start a new business, which structure should you opt for starting and managing the business? Is it an ideal structure for your business?

Or

How to get trademark, Import Export Code or Register the Business? So many Compliance making you confuse ??????????????

No worries. We at Palankarta   is here to help you, where you will get a one stop solution for all your above queries. At Palankarta you will get all the below features:

• One Stop Solution.
• Professional with decade of Experience.
• Cost Effective Consultation.
• Timely Deliverable.
• Using the Advanced System for Service.
• Data Availability on Cloud.

You just need to visit www.palankarta.com, and fill the enquiry form , our team will call you back and discuss the matter in detail with you, after getting the details will share you the list of documents required for registration or License as the case may . Once the documents will be provided back to the team our team will start your work and get the registration at your home comfort within the predefined deadline. 

Want to know more:

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