Implications of legal status, Dilution of Control and tax affects

Each financial resource has its own implications for example interest rate on loan, late payment penalties etc. legal status means that when the business has been started then there are so many legal responsibilities on the business entity including tax payments, legal agreements, on time payments, wages rates, tax rate, sales tax payments, value added tax (VAT), bill payments and business entities are liable to pay all these payments on time and must avoid to breach legal agreements and to pay amount in time (Ali, 2008). In condition of non payment it may affect the business operations and credit score of company and trust on financial institutes and services providers may stop to provide their services and business may be flopped. The balance sheets, profit and loss statement must be neat and clean and accounts must be submitted to the company’s house and statements must be published in time, dividends must be paid well in time to the share holders (Robert, et al., 2008).

Dilution in control means that the decline in the percentage of the shareholder’s must be in control of the company because it have a great impact on the shareholder’s mind and when the company will issue new shares in the secondary market. New shares always issued after the general meeting with share holders after their approval and other parties issued the reports (auditor’s reports) with legal aspects (protection) (Richard, 2008).

Published by MALI

Writer is post-graduated in Computer science, Business Administration, Marketing and Innovation. He has 10 years of business academic research writing experience.

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