The liability of each subscriber is equal to the total amount due on the shares subscribed for by him. The obligation to pay for the shares subscribed applies even if the subscriber is the nominee of another person. Each subscriber is liable to pay to the company the full amount of the shares for which he has subscribed when a call to pay up is made on him by the directors or on the date or dates fixed for payment. The subscribers of the memorandum of a private or public company need pay nothing to the company on subscription their undertaking to pay when called upon is sufficient. If a person's name does not appear in the list of subscribers he is not a subscriber even if his signature appears on all the other pages of the memorandum. A partnership not being a legal person cannot do so an individual partner must subscribe.Ī person becomes a subscriber by signing the memorandum as a subscriber and at the place intended for that purpose. A company being a legal person can subscribe. Let’s first understand who can be subscriber or who can’tĪny person who is competent to contract can be a subscriber. In this article we will discuss what are the compliances to be done by the Company in such situation. Sometime situation occurs when subscribers to the MOA fails to pay subscription money as agreed by them in MOA. By signing of subscriber sheet of MOA they enter into a contract with the Company. A reduction in debt receipt or borrowing (or fiscal deficit) is the big step for the government’s fiscal health.As per section 3 of Companies Act, 2013 A company may be formed for any lawful purpose by minimum 7 member in case of public Company, minimum 2 member in case of private Company or one member in case of OPC. The number of shares each subscriber to the memorandum intends to take indicated opposite his name in MOA. As a result, interest payment became the largest expenditure item for the government now. For a long time, the government was financing a considerable portion of the budget expenditure through borrowing. So, it produces interest payment obligations for the future besides the principal repayment burden. The implication is that nearly 25% of the government expenditure is financed through borrowing. The second largest item is borrowing which is around 25% of the total government receipts. Table: the main non-tax revenues of the centre Non- tax revenues – 2019 BudgetĮconomic Services (including zero net railway revenue) Among non-debt receipts, the second most important component is non-tax revenues. Understandably, tax revenue is the largest receipt item for the government. Of these, the share of tax revenue to total receipt is 59%. Nearly 75% of the total budget receipts are non-debt receipts. Table: Non-debt and debt receipts as per 2019-20 budget (BE) Source of receiptsįigure: debt and non-debt receipts of the government – Budget 2019-20 (July) For the central government, following are the m main receipts items. So, from the fiscal sustainability angle, high and increasing share of the non-dent receipts is highly desirable. Most important feature is that they don’t have any debt or repayment impact. The non-debt receipts have tremendous importance for the central government in terms of their desirability. Table: non-debt and debt receipts of the government Source of receipts Debt receipts or borrowing is shown in item number (e). Following are the major receipts items in the central government. On the other hand, in the case of non-debt receipts like tax revenues (or tax receipts) obtained by the government is that there is no repayment. Other receipts in the budget are non-debt receipts. On the other hand, the debt receipts are those which are to be repaid by the government. Non-debt receipts are the receipts which doesn’t incur any future repayment burden for the government. Now, an important implication of the debt receipts (borrowing) is that it produces interest payment expenditure in the future and besides that, the borrowed money should be repaid. Rather, a part of the receipts is obtained through borrowing or debt (described as fiscal deficit). Regarding receipts, all the receipts are not tax revenues or non-tax revenues. The basic principle in budget making is that to finance the expenditure of the government, there should be enough receipts. Both will be equal for the central government budget. In the government budget, everything is recorded under two heads- receipts and expenditure.
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