• The cost of debt capital, represented by debentures is lower than the cost of preference or equity capital. This is because the interest on debentures is tax deductible and hence it helps in increasing the rate of return. Thus debenture issue is a cheaper source of finance.
• The fixed monetary payment associated with debentures is interest. This fixed return appeals to many investors, since they are not affected by the fluctuating fortunes of the company.

Partner by estoppel: A person is considered a partner by estoppel if, through his/her own initiative, conduct or behaviour, he/she gives an impression to others that he/she is a partner of the firm. Such partners are held liable for the debts of the firm because in the eyes of the third party they are considered partners, even though they do not contribute capital or take part in its management. Suppose Rani is a friend of Seema who is a partner in a software firm — Simplex Solutions. On Seema’s request, Rani accompanies her to a business meeting with Mohan Softwares and actively participates in the negotiation process for a business deal and gives the impression that she is also a partner in Simplex Solutions. If credit is extended to Simplex Solutions on the basis of these negotiations, Rani would also be liable for repayment of such debt, as if she is a partner of the firm.

1. Acceptance of Deposits : Accepting of deposits from the public is the most important function of bank. It takes the savings and surplus of people. Banks provide a safe custody of the deposited cash. Depositors can easily transfer money and can make the payments through cheques.
Banks provide an attractive rate of interest on their deposits. There are various types of deposits which can be opened in the bank like Fixed Deposit. Savings Deposit and Current Deposit.

2. Making Loans and Advances : It is another equally important functions of bank. Banks accept surplus money of people and provide loans and advances to the needy persons. It is through loans and advances, banks earn profit. Loans and advances are provided through banks in the following forms :
(i) Loan, (ii) Overdraft, (iii) Cash credit, (iv) Discounting of bills and exchange.

(i) Loan : Loan is a lumpsum advance made by a bank against security or otherwise. In it specified amount is either paid to the customer in cash or is credited in his account. The borrower is required to pay a prefixed rate of interest on the amount of loan from the date of the sanction of the loan.
The loan may be refunded in instalment or in lumpsum. Short and medium term loans are provided by commercial banks.

(ii) Overdraft: Under this system a current account holder is allowed to overdraw his bank account i.e., he can draw upto a fixed limit more than the balance in his account withdrawal at any time.

(iii) Cash-credit: In cash credit, a customer is given credit upto a definite limit against a surety bond or against other securities. The interest is charged on the amount overdrawn by customer on the daily balance and not on the entire amount of the limit.

(iv) Discounting of Bills of Exchange : Bill of Exchange is a negotiable instrument. It is drawn by the seller and is accepted by the buyer. The drawer has got a facility to discount the bill of exchange before maturity if money is required immediately. The bank discounts the bill and deducts a certain amount as discounting charges and pays the remaining money to the drawer.

Secondary functions subsidiary functions can be classified as :

(a) Agency functions
(b) Utility functions.

(a) Agency functions : These are the functions which banks perform as an agent of their customers.

1. Collection of cheques and bills : It collects local and outstation cheques, drafts, bills of exchange, and promissory notes of its customers and credit to their account.

2. Collection of Interest and Dividend : It also collects interest and dividend on debentures and securities held by its customers.

3. Purchase and sale of securities : On instructions from its customers banks purchase or sell stock securities, debentures, bonds etc.

(b) Utility functions : Banks provide the following utility or miscellaneous functions :

1. Safe custody of customers' valuable articles and securities : Some banks provide the facilities of lockers where on nominal rent a customer can keep its valuable articles such as ornaments, jewellery etc.

2. Facility of Foreign Exchange : After obtaining a license from the Reserve Bank of India, commercial banks can deal in foreign exchange. The banks can exchange the various foreign currencies and even discount foreign bills of exchange.

3. Provide Trade Informations : Banks provide useful trade information to its customer through publishing various journals.

Perpetual succession : A company being a creation of the law, can be brought to an end only by law. It will only cease to exist when a specific procedure for its ClBsure, called winding up, is completed. Members may come and go out, but the company continues to exist.

No Separate Entity

• According to the accounting system, the owner and the business are considered as two separate entities.
• But the law does not make any distinction between the sole trader and its business.
• Hence, without the sole trader, the business has no identity because he is the only person who performs all the business activities.

The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business 

Characteristics of Business Risk:

• The Time. In ancient times, business-risks were less and limited. ...
• The Size of Business Enterprise. ...
• Nature of Business Risks. ...
• Terms of Sales. ...
• The Degree of Competition. ...
• The Competence of Management. ...
• The Age of the Business Enterprise. ...
• Opportunities for Gains are Hidden in Business Risks.

Management is required for an established life and essential to managing all types of management. Sound management is the fortitude of thriving companies. Managing life implies getting everything done to accomplish life’s aspirations and maintaining an establishment means getting things done with and by other people to deliver its objectives.

Mutual agency implies that every partner is both an agent and principal. He is an agent of other partners as he represents them and there by binds them through his decisions and acts. He is a principal as he too can be bound by the acts of other partners.

Meaning of commission agent in English. someone who sells a company's products and receives a part of the money paid for the goods for doing this: Such business is conducted through commission agents who sell to their families and friends.

The executors have two main sets of responsibilities:

• ensuring that your estate is dealt with according to the law; and
• carrying out your wishes as you have set them out in your will.

One of the first things that the executors have to do is to value your estate, by assessing your assets and liabilities. This is so that they can determine whether any inheritance tax is payable, because in most cases the inheritance tax must be paid before a grant of probate can be obtained. It is probate that gives them the permission to distribute your estate.

The role of a trustee of a will trust starts after the administration period of your estate. If assets in the estate are to be held on ongoing will trusts, the executors pass those assets to the trustees of the will trust, who then become the legal owners of the assets and manage them in accordance with the terms of the will trust.

This explains why a will that contains a trust makes reference to the ‘executors’ and then, later in the will, to the ‘trustees’. If the will creates a trust of the whole estate, or the residuary estate, then the residuary estate is usually referred to as the ‘trust fund’ in the will.

Auxiliaries to trade help in the removal of hindrances in the process of exchange:-

1. Activities which are meant for assisting trade are known as auxiliaries to trade. They are generally known as 'Services' since they play a supporting role for the industry and trade to happen.
2. The auxiliaries help in removing the various hindrances which arise in connection with production, distribution and sale of goods.
3. The hindrances may be in respect of persons, place, time, risk, finance, etc.
4. For example, transport removes the hindrances of place by moving goods from the places of production to the markets for sale, storage and warehousing activities removes the hindrance of time by facilitating holding of stocks of goods to be sold as and when required.
5. This is how Auxiliaries facilitate movement, storage, financing, risk coverage and sales promotion of goods.

Types of human activities are mainly divided into 2 categories, namely:

1. Economic Activities​​​​​​
2. Non-Economic Activities

Economic Activity includes:

• Business: Business refers to those economic activities which are connected with the production,purchase,sale or distribution of goods or services with the main objectives of earning profit.
• Profession: Profession refers to the activities which require special knowledge and skill to be applied by and individual in his work to earn a living.
• Employment: It refers to an activity in which an individual works regularly for another person and gets remunerated in return.

Non Economic Activities:
The activities which are undertaken by an individual with a motive of getting psychological satisfaction are know as non-economic activities e.g., Going to temple,charity,social services,production for self-consumption etc.

CORPORATE NET BANKING

YES BANK provides a one-stop bank for all Payables requirements of the corporate through a comprehensive Product Suite offering Cost and Administrative Efficiencies; superior Information Management systems – all within the ambit of best in class Security features.

YES BANK has developed unique product proposition extending the entire benefit of the advancements in the e-payments landscape to the customer’s desktop by pioneering the introduction of the electronic payments on the web.

The platform provides online confirmation along with instant settlement for electronic payments making cash flow forecasting easier and precise to the last minute. The product suite for payments, tailored around generic remittance requirements of various industry segments, is an ever evolving and dynamic one.

Salient Features

• Multi-Level Authorization Matrix: A role based authorization matrix ensures safe and secure transactions for the customer eliminating the chances of erroneous payments.
• Automated Email/SMS Advice: We provide an automated email advice to customer as well as the beneficiary to intimate the success of the payment thus providing the customer with real-time information regarding transfer of funds within various accounts.
• Data Security: We provide digital signature and data encryption facility to the customers in order to deliver secured transaction processing, thus maintaining high degree of confidentiality for customer’s data
• Two Factor Authentication: Usage of soft token device
• Payment options :
  • Straight-Through Integration with RBI for RTGS and NEFT payment mechanisms enables seamless transaction processing
  • Multi transaction type bulk file upload facility for electronic payments
  • Remote Cheque/ DD printing at 8 locations and centralized Cheque/DD printing from two state-of-the-art ‘National Operating Centers’ in Mumbai and NCR
  • Client side cheque printing facility
• Tax Payments : Payment of Direct/Indirect taxes

Partnership is considered by some to be relatively unpopular form of business ownership because: 

1. Uncertainty of duration: A partnership suffers from a possible limited span of life. Legally, a partnership firm must be dissolved on the retirement, death, bankruptcy, or lunacy of any partner or demanded by any partner. The probability of any one of these events occurring when the number of partners is much greater than in the case of a sole proprietor. 

2. Risks of additional liability: It is true that like the sole proprietor, each partner has unlimited liability. But his liability may arise not only from his own acts but also from the acts and mistakes of co-partners over whom he has no control. 

3. Lack of harmony: The old saying that “too many cooks spoil the broth” can be apt for a business partnership. Harmony may be difficult to achieve, especially when there are many partners. Lack of centralized authority and conflicts in policy can disrupt the organization. 

4. Difficulty in withdrawing investment: Investment in a partnership can be simple, but its withdrawal may be difficult or costly when this aspect is considered from the point of view of individual partners. This is so because no partner can withdraw his interest from the firm without the consent of all partners. 

5. Lack of public confidence: A partnership may suffer from lack of public confidence 

6. Lack of public confidence: A partnership may suffer from lack of public confidence because, like that of a company there is no legal mechanism to enforce the registration of a partnership firm and the disclosure of its affairs. 

7. Limited resources: A partnership is good as it can be started with limited capital. However, it becomes a handicap in the growth and expansion phases of the business. There is a limit beyond which it is almost impossible for partners to collect capital. This limit is generally up to the personal properties of the partners.

8. Unlimited liability: Unlimited liability discourages partners to undertake risky ventures, and therefore, their risk-taking initiative is very risky.

Different Types of Companies

• Royal Chartered Companies.
• Statutory Companies.
• Registered or Incorporated Companies.
• Companies Limited By Shares.
• Companies Limited By Guarantee.
• Unlimited Companies.
• Public Company (or Public Limited Company)
• Private Company (or Private Limited Company)

Small Scale enterprises provide the numerous benefits in rural area. The role of small business in rural India is explained in the following points. (i) Non-farm Employment Traditionally, rural households in India were exclusively engaged in agriculture. But now rural households have varied and multiple sources of income and participate in a wide range of non-agricultural activities such as wage employment and self-employment in commerce, manufacturing and services, along with the traditional rural activities of farming and agricultural labour. This can be largely attributed to the setting up of agro-based rural small industries. (ii) Employment for Artisans Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially for the traditional artisans and the weaker sections of society. (iii) Prevention of Migration Development of rural and village industries can also prevent migration of rural population to urban areas in search of employment. (iv) Poverty Alleviation Village and small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby addressing the problems of poverty and unemployment. Promotion of small scale industries and rural industrialization has been considered by the Government of India as a powerful instrument for realizing the twin objective; of accelerated industrial growth and creating additional productive employment potential in rural and backward areas.' (v) Socio-economic Aspects These industries contribute amply to other socio-economic aspects, such as reduction inequalities, dispersed development of other sectors of the economy.

Hundi is a negotiable financial instrument which consists of an unconditional contract to warrant the payment of money, the promise or order. This word has come out from the Sanskrit word ‘hundi’ which means ‘to collect’. 

A hundi is a negotiable instrument. But it is not necessary to be a bill of exchange as given in the Act. Hundis are famous among Indian traders. Specifically, it is famous amongst those operating in suburban areas. These are under control of the Negotiable Instrument Act,1881 unless there is a local usage to the contrary.

Public Company means which is formed with minimum of seven members and three Directors. There is no restriction on maximum number of members.