Corporate Counseling

A very controversial news piece came across the wire recently and has been explored on the Workers Compensation site.  It seems that the widower of an obese female was granted Work Compensation benefits due to the death of his wife while she was on the job.

The interesting piece of information is that the woman weighed in at more than 300 pounds and reportedly had a series of medical conditions that had combined to restrict her blood flow.  The woman, Workers Compensation reports, died at her office desk as a result of a blood clot.

Was this death work related or not?

The New Jersey court who heard the case determined that the clot was likely formed while she was at work.  They demanded compensation of Work Compensation as the event happened at her place of employment.  Note, the court does not say that the event happened as a result of her place of employment.  Employers and employees alike are in a quandary about this case.  It is further proof that the course of Workers Compensation may not be a straightforward one.

This case and its determination have been so controversial because the injury was non-accidental and was (apparently) not brought on as a result of working conditions or as a result of the employee’s work tasks.  So, the question is, should Workers Compensation have had to pay up under these conditions?

There are cases for both sides of the issue, and here is where things got tricky and sticky and were then taken to the appellate court.  The news story that Work Compensation posted on their site does get into the legal wrangling of the case.  It also chooses the state of Alabama to compare the likelihood of how the same situation may have proceeded had it occurred there, based on its Work Compensation rules and regulations.

In the state of Alabama, for example, a Workers Compensation claimant needs to pass a ‘causation test’ that establishes both legal as well as medical causation.  In short, this means that the legal cause must be proven to show that the employee’s job duties exposed them to a risk or danger that people are otherwise not exposed to.  It also means that the medical cause must be proven to show that this risk or danger contributed to the injury sustained.  It is likely that had this event happened in Alabama that the case would not have fit the recommended parameters of Work Compensation, and would not have gone to appellate court.

This serves as an example of the crucial importance of your Workers Compensation.  Remember, it is ultimately the employer who is responsible for his / her employees.  Accidents, injuries and natural deaths are all facts of life.  Whether the job or the work environment contributed to the event is not always indicative of whether the Work Compensation benefits may be paid out.  Each case varies, as does each state and each jurisdiction.  In short, protect yourself from such unfortunate possibilities by ensuring that you have Workers Compensation.

Compensation, Compensations, Death, News, Work

The last decade has viewed the tremendous growth in the Real Estate; it also witnessed the growth in legal disputes regarding tax matters.
A Joint Venture between the landowner and a Developer is considered the most preferable way for the development of property.

In a Joint Development Agreement between Landowner and Developer for construction of residential buildings on a land measuring X acres of landowner, the common issues which generally arises are as following
a) When does the Capital gain Tax arise for the landowner and developer? Is it at time of signing the joint development agreement, at the time of receiving the constructed residential buildings, or at the time of selling the residential buildings?

b) In case, if there is breakdown of joint development project, does landowner has to pay the capital gains tax.
As per S.45 (1) of the Income Tax Act, any gain arising from the transfer of a capital asset during a previous year is chargeable under the head “Capital Gains” in the immediately following assessment year.

However, S.45(2) of Income Tax Act, gives certain exemptions to not to treat certain assets as capital assets like any stock in trade, consumable stores or raw material held for the purposes of business or profession. And, as per the facts Developer is engaged in Construction business, so for him, constructed property is stock-in-trade. It cannot be treated as a “capital asset”. Any surplus that is generated by developer on sale of stock-in-trade would be chargeable to tax as business income. Therefore, Developer is not liable to pay capital gains tax.

In case, in the Joint Development Agreement, arrangement between the landowner and developer is such that developer has to bear certain portion of capital gains tax, then only developer will be liable for the payment of capital gains tax which is to be borne by the landowner or else the landowner has to bear the capital gains tax.

Now, the question arises when the incidence of capital gains tax arises?
„« The point where the capital gains are deemed to accrue will purely depend on the terms of Joint Development Agreement. Where the agreement is of such nature that possession is given in part performance of a contract, the liability of capital gains tax will arise on the handling over of such possession to the builder.

„« If the possession is not transferred but deferred until the construction is completed, the liability to capital gains tax will arise in the year in which the developer completes the construction.

„« Where the landowner and builder execute joint development agreement, if the consideration is receivable in built-up area to be constructed and handed over by the builder to the landowner, it is advisable to avoid the applicability of section 53A of the Transfer of Property Act. This can be achieved by mentioning in the agreement that license is granted to the builder to enter the premises and construct the building. The possession is retained by the landowner, which will be handed over as and when the built-up area is constructed and delivered. By this stipulation, the transfer will take place only in the year in which the built-up area is received and not before.

In the case of In re Jasbir Singh Sarkaria, [2007]164 TAXMAN 108 (AAR- New Delhi) , it has been held that-
1) Where the agreement for transfer of immovable property by itself does not provide for immediate transfer of possession, the date of entering into the agreement cannot be considered to be the date of transfer within the meaning of sub-clause (v) of section 2(47) of the Income-tax Act.

2) To attract sub-clause (v) of section 2(47), it is not necessary that the entire sale consideration upto the last installment should be received by the owner.

3) In the case, having regard to the terms of two agreements and the irrevocable GPA executed pursuant to the agreement, the execution of GPA shall be regarded as the “transaction involving the allowing of the possession” of land to be taken in part performance of the contract and therefore, the transfer within the meaning of section 2(47)(v) must be deemed to have taken place on the date of execution of such GPA.

4) Once it is held that the transaction of the nature referred to in sub-clause (v) of section 2(47) had taken place on a particular date, the actual date of taking physical possession need not be probed into. It is enough if the transferee has by virtue of that transaction a right to enter upon and exercise the acts of possession effectively.

In case, the Joint Development Agreement between the Landowner and Developer breaks down and the project is not completed, then whether Landowner is liable to pay capital gains tax?

(i). If the developer is liable for the breaking down of the joint development agreement, then either the landowner will get compensation from the developer for the breach of contract or developer have to do specific performance as per the terms of the Joint Development Agreement, in both cases landowner will acquire. And, for charging what landowner has acquired from the developer under capital gains tax, it should be first comes under the definition of “capital asset”

In the case of CIT v. Vijay Flexible Containers [1990] 186 ITR 691 (Bom.), the assessee a firm entered into an agreement with a person to purchase the property at a particular rate. The assessee also paid a sum of Rs. 17,500 as earnest money. As the vendor failed to perform his part of the contract, the assessee was constrained to file a suit for specific performance of the agreement for sale, or in the alternative, for damages for its breach. Consent terms were arrived at in the suit and a decree was passed in favour of the assessee for the sum of Rs. 1,17,500 and interest. The question arose whether that amount received by the assessee was a capital asset. A Division Bench of the Bombay High Court held that under the agreement to purchase the property, the assessee had acquired the right to have the immovable property conveyed to him and under the law, he was entitled to exercise that right not only against his vendors but also against a transferee with notice or a gratuitous transferee. The assessee could have also assigned that right. Hence, what he acquired under the said agreement for sale was therefore property within the meaning of the Income-tax Act, 1961, and consequently a capital asset. The Court further held that his giving up of the right to claim specific performance by conveyance to him of the immovable property was a relinquishment of the capital asset and therefore there was a transfer of a capital asset within the meaning of the Income-tax Act.

(ii). In a Joint Development Agreement, when the project starts, the Developer pays a consideration to the Landowner for starting the project. Even if the project is not completed because of breakdown of Joint Development Agreement, then whether the consideration paid by the Developer at the beginning of project will be treated as capital asset for Landowner?

In the case of K.R. Srinath v. Asst. CIT,[2004] 141 Taxman 268 (Mad.), Where the assessee initially paid advance under an agreement for the purchase of a property, reserving right to specific performance of the agreement, and later received consideration under another agreement under which the earlier agreement was cancelled and the vendor was allowed to sell the property to any person at any price, there was a relinquishment of right by the assessee which amounted to ‘transfer’, and the resulting gain was assessable as capital gains. Since the assessee had paid a sum for acquiring the right to acquire the sale deed, it could not be said that there was no cost of acquisition so as to take the view that there could be no assessment to capital gains.

Hence, even if the Joint Development Agreement between the Landowner and Developer breaks down, if the landowner has acquired due to Joint Development Agreement, then what landowner has acquired will come under the definition of “capital asset” and Income Tax department can levy capital gains tax on that capital asset.

Agreement, Capital, Development, Gains, Joint

In two traditions capital can be formed .You can have a loan of capital, which will be remunerated back shortly that is the primary decision and the next alternative is issuing stock to those individual who are interested  in division the company’s profit. The people who purchase the stock will facilitate in the project of the company. But they in return will have a share in the earnings make by the corporation .The benefit of this choice is by issue stock to people, the corporation can lift extra capital for its establishment and this money does not include to bear back .So in this case on bear to pay interest or any compensation of debit. But the major difficulty created by shareholders is that they want to share the company ownership. They in addition want to take part in company policies conference. There are the following basic of stock market fundamentals:

1. Stock: The ownership units of a company are referred to as stock

2. Offering price: The offering price is referred to the value of the stock offered in the locate brochure at the occasion of issuing the stock.

3. Stock price: Stock price refers to the value for which a definite stock sales. Technical and financial information make public by the corporation as well depends on these prices.

4. Underwriter: The Company hires an investment shareholder for assist to advertise its stock .The individual who helps the corporation for underwriting is identified as underwritten. There are following types of underwriting work:

All –or none arrangement
Firm Commitment
Best effort arrangement
Negotiated Underwriting

5. Prospectus: The contribution is included in a brochure, the company history, authorized opinions regarding the matter, the underwriting technique, its management team, SES’S disclaimers and the other expenses concerned in investing.

6. Broker-Dealer: The person is identified as broker who facilitates buy and sell between costumers. But he charges commission. Any risk is not beard in the deal by him. A character is recognized as dealer who trades for his personal securities and for others. In this position he assumes a few risks in the dealings.

 

7. Stock market index: It is used as method of measuring the stock market as a sum total. It is used to determine the performance of portfolios and monetary firms are ready by joint many indices.

 

Working of stock market:  When a corporation to sell stock then the first step is takes it to case registration statements with the Securities and Exchange Commission .After this step they will hang around for 20 days before the sale of stocks. The stock is bought by the underwriters .They bought the all corporation stock to sale them to the public. The underwriter decides the marketing the price of the stock. This new price built-in his service charges .In this 20 days period, Announcement about the issues of stocks is advertised. Informational regarding way stock is being sold to the public is made by representatives and they can send this informational in preliminary prospectus.

You place an order if you wish for to purchase stocks .Your order is filled and finished if there is a broken with a sale order at the a few price as that presented by your order. The all trade information are transmitted to all the parties interested after once the order is filled .The brokerage firm exchanges the stock documentation and wealth for the stock in 3 business days from the trade date. You will give a sale order according to prospectus to your broker regarding the quantity of shares of whichever company you desire to sell.

You will require an investment accounts to buy and sell in shares it can be an online account or any other type.

If the company business suffers from closes its share value fall. The price of corporation shares rises when the company business makes profit. If you want to invest in stock market you should have some experience and alert about the company business. The decision of when to buy and sell shares is based on the financial circumstances of the business and there speculation.

Market, stock, Work

Have you ever dreamt of owning a successful home business? People all over the country are looking for more control over their lives by starting a home business. Home business success is becoming more and more recognized as times go by.

Success stories abound of people who have started home based businesses that have succeeded beyond their wildest dreams. Home business success is more achievable and ideal because it saves the start up and the overhead costs associated with running a commercial premise.

Home business success is within your grasp if you can comply with these 21 easy steps;

Get a physical location within your house to host your business. It can be a separate room, the garage, the attic or anywhere that can hold your business equipment and enough for you to work comfortably in.

Home business success requires time. How much time are you willing to devote to your business to ensure it succeeds? You need to make a weekly schedule of all your activities at home, outside the home and decide where and how to place your business.

What do you like to do? What need can this fill for your future clients? Home business success stems from natural talents that fulfill needs and are nurtured into reality and later into riches. We can help you with ideas at the end of this article.

Go solo. The legal form of this is sole proprietorship. This is the easiest way to start because you are the boss so the profits are all yours, the work is cheaper to organize, you enjoy some tax savings although you need to notify the IRS for sales tax reasons. You will ensure home business success because you will have to prove to yourself that you can succeed, hence you will be more driven to do so.

You can get more information on this from the U.S. Small Business Association (SBA) publication MP25 about other business forms available. You can also seek further clarification by consulting an attorney.

Start small, that is, start with your own money. This is because you and your idea are still new and unproven so you may not qualify for a loan or getting trusted investors.

Info, info info. Home business success is only possible with extensive research on your type of business. Visit your local library or book store and research information on the business that interests you.

Location, location, location. Find how the location of your home is zoned and what restrictions apply. Also reread your lease. Home business success here will depend on what your neighbors perceive so don’t upset them.

First things first. Before you begin anything decide on a business name and have it registered. This will keep your business name unique to you only.

See your business on paper first. Nothing ensures home business success like a well written business plan.  This plan covers all areas of the business. A good place to start would be SBA publication #M925, The Business Plan for Home-based Business.

You need a number to identify you always. If you are alone you can use your Social Security number or Employee Identification Number (EIN) as the business number on official forms. However, when you grow and get employees or you change into a corporation, you must apply for an EIN. The IRS centre nearest you can supply you with Form SS-4 (Application for Employer Identification Number) for filling and later filing.

If you are planning to sell something, you need to find out whether you need to include sales tax in the costing. Call your local tax agency to explain the procedure on acquiring a sales tax permit.

All cities and counties have their own regulations on obtaining the necessary license or permit to operate your kind of business. Consult City Hall and the Chamber of Commerce for this very important information.

How do you want people to see you? Good, of course. A graphic designer or a creative printer can make you look good on your business stationery, like cards, brochures and other business stationery. You can only ensure home business success if your first impressions last.

Separate your business money by shopping around for a checking account with good and flexible services. A place to start is at your local bank. Also find out about credit card services so that you can make buying from you easy for your customers. If the business cannot have its own credit card then you need to set aside a personal credit card for the business only. You can track your income and expenses this way to ensure home business success. Convenient buying procedures for your customers will accelerate your journey to home business success.

Records, records, records. Home business success will not materialize unless you keep meticulous records. You can start manually with efficient records for bookkeeping to track income and expenses, travel and mileage, correspondences, invoices, suppliers, clients etc. You will only reach home business success to the level that you keep your work records. Learn important information on record keeping from IRS publication # 583 Information for business tax payers.

The big bad wolf. Familiarize yourself with the entire IRS requirement for operating your business. You can actually save some money when using your home for business purposes by consulting IRS publication #587 Business Use of the Home. Other important forms are ;

Schedule SE (compensation of Social Security Self Employment Tax)

Schedule 104 ES (estimated Tax for Individuals)

You may need to file these when the time comes. Keep the IRS happy and your own home business success is assured.

Start with the basics. List all the things you need to start the business and then shop for inexpensive places to get them e.g. garage sales, classified ads etc. Beware of overspending here.

Are you reachable at all times? You can use your own personal phone but the best is to get a separate phone line for the business. The idea is to track business call expenses. Have an answering machine working when you are away. If your prospective customers can reach you at all times, they will assure your home business success, because you can respond to queries faster and stay ahead of competition.

Get a post office box to make your business look more official. Find out the rates especially bulk rates if you are doing bulk mail deliveries.  For packages, United Parcel Service (UPS) is cheaper than the Post Office.

How much liability can your home business take? Check with your homeowners’ insurance agent for a rider on your existing policy. You need to have adequate personal and product liability insurance. Shop around for the best deal.  You can save money on medical insurance by joining an associations’ group plan e.g. The National Association for the self employed on 800-527-5504. A home business success story can become a failed statistic because of inadequate coverage during the difficult times.

Clean up and shape up. Have a garage sale and clear all accumulated clutter. Have a family meeting and organize the team so that the home keeps running efficiently while you work. Have a note book to record all your daily tasks. The most important ingredient for home business success is a work schedule that is disciplined and result oriented.

Home business success is achievable and the journey enjoyable because you are doing the work you love and making money as a consequence. 

Business, Home, Simple, Steps, Success