A trust is a fiduciary relationship between the trustor and the trustee. A Trustor is just the person who creates and opens a Trust. A trustee is a person or an entity created and entrusted with property/assets to deal with for the benefit of a certain person or persons called ‘beneficiaries’. A trust is created…
The sole proprietor is an individual owner of a business or contract. He/ She are liable to pay liability of the proprietorship as personal liability and also pay income tax on personal income earned through business. As such many businessmen do business or trade on their personal name as separate business name is not necessary.…
Factoring is commonly identified as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Factoring service is a service that covers (i).Collection of bills, (ii).discounting of bills (iii).maintenance of accounts books in domestic and international trade. Factoring enables companies to sell their outstanding book debts for cash. They sell invoiced receivables at a discount…
Though financial transactions involved in ‘factoring’ and ‘forfaiting’ appears alike, these two terms are different in their nature, perception and scope. From the below table, let us find out the key difference between factoring and forfaiting; FACTORING FORFAITING Factoring is a financial arrangement whereby a supplier of goods sells its trade receivables to the factor…
International factoring usually has two factors viz. export factor and import factor. The export factor looks at financing the exporter and collection of account receivables. The import factor evaluates the importer in respect of collecting the dues in time and assessment of chances of default by the importer. The exporter on receipt of export order…
The term forfaiting refers to a form of trade finance involving discounting of export bills receivables such as drafts drawn under LC, bills of exchange, promissory notes, or other instruments on without recourse basis. The export of capital goods involves account receivables of medium and long term maturities. It is a general practice that the…