Tag: Features

  • Meaning, Definition, Types, and Advantages of Eurobonds

    Meaning, Definition, Types, and Advantages of Eurobonds

    A Eurobond is an international bond that denominates in a currency not native to the country where it issues. Also, call external bonds; “External bonds which, strictly, are neither Eurobonds nor foreign bonds would also include: foreign currency-denominated domestic bonds…” This article explains the Euro bonds or Eurobonds with their topics Meaning, Definition, Characteristics, Types, and Advantages. Money may raise internationally by bond issues and by bank loans. This does in domestic as well as international markets.

    The Concept of Eurobonds or Euro bonds explains in Meaning, Definition, Types, Characteristics, and Advantages.

    It can categorize according to the currency in which it issues. London is one of the centers of the Eurobond market, with Luxembourg being the primary listing center for these instruments. The difference is that in international markets the money may come in a currency that is different from that normally used by the borrower. A foreign bond a bond issue in a particular country by a foreign borrower. Eurobonds bonds underwrite and sell in more than one country.

    Meaning and Definition of Eurobonds:

    A foreign bond may define as an international bond sold by a foreign borrower but denominated in the currency of the country in which it is placed. It underwrites and sells by a national underwriting syndicate in the lending country. Thus, a US company might float a bond issue in the London capital market, underwritten by a British syndicate and denominated in sterling.

    The bond issue would sell to investors in the UK capital market, where it would quote and traded. Foreign bonds issued outside the USA call Yankee bonds, while foreign bonds issued in Japan are called Samurai bonds. Canadian entities are the major floaters of foreign bonds in the USA.

    Euro bonds may define as an international bond underwritten by an international syndicate and sold in countries other than the country of the currency in which the issue denominates. In the Eurobond market, the investor holds a claim directly on the borrower rather than on a financial institution.

    Eurobonds are generally issued by corporations and governments needing secure, long-term funds and are sold through a geographically diverse group of banks to investors around the world. Eurobonds are similar to domestic bonds in that they may issue with fixed or floating interest rates.

    An Issue of Eurobonds:

    The issue of Eurobonds is normally undertaken by a consortium of international banks. A record of the transaction called a “Tombstone” is subsequently published in the financial press. Those banks whose names appear at the top of the tombstone have agreed to subscribe to the issue. At a second level, a much larger underwriting syndicate mentioned.

    The banks in the managing syndicate will have made arrangements with a worldwide group of underwriters, mainly banks and security dealers. After arranging the participation of several underwriters, the managing syndicate will have made a firm offer to the borrower, which obtains the funds from the loan immediately. At a third level, the underwriting group usually arranges for the sale of the issue through an even larger selling group of banks, brokers, and dealers.

    Types of Eurobonds:

    There are three types of Eurobonds, of which two are international bonds. A domestic bond is a bond issue in a country by a resident of that country.

    There are several different types of Eurobonds.

    • Straight Bond: Bond is one having a specified interest coupon and a specified maturity date. Straight bonds may issue with a floating rate of interest. Such bonds may have their interest rate fixed at six-month intervals of a stated margin over the LIBOR for deposits in the currency of the bond. So, in the case of a Eurodollar bond, the interest rate may base upon LIBOR for Eurodollar deposits.
    • Convertible Eurobond: The Eurobond is a bond having a specified interest coupon and maturity date. But, it includes an option for the hold to convert its bonds into an equity share of the company at a conversion price set at the time of issue.
    • Medium-term Eurobond: Medium-term Euro notes are shorter-term Eurobonds with maturities ranging from three to eight years. Their issuing procedure is less formal than for large bonds. Interest rates on Euro notes can fix or variable. Medium-term Euro-notes are similar to medium-term roll-over Eurodollar credits. The difference is that in the Eurodollar market lenders hold a claim on a bank and not directly on the borrower.

    Characteristics of Euro bonds or Features of Eurobonds:

    The following characteristics of euro bonds below are;

    • Straight bonds: the fixed interest rate at periodic intervals, usually annually.
    • Floating-rate notes (FRNs): rollover pricing payment usually six months interest stated in terms of a spread over some reference rate.
    • Zero-coupon bonds: discount securities, sold either at a fraction of face value and redeemed at face value, or sold at face value and redeemed at a premium.
    • Convertible bonds: can exchange for some other type of asset: stock, gold, oil, other bonds.
    • Mortgage-backed Eurobonds: backed by a pool of mortgages, or other bonds Institutions which would otherwise exclude from Eurobond market can get access.
    • Dual-currency bonds: purchased in one currency, coupon or principal paid in a second currency.

    The following Eurobonds features are:

    • The issuing technique takes the form of a placing rather than formal issuing, this avoids national regulations on new issues.
    • Eurobonds place simultaneously in many countries through syndicates of underwriting banks. Which sells them to their investment clientele throughout the world.
    • Unlike foreign bonds, Eurobonds sale in countries other than that of the currency of denomination; thus dollar-denominated Eurobonds sale outside the U.S.A.
    • The interest on Eurobonds is not subject to withholding tax.

    Advantages of Eurobonds:

    The Eurobonds market possesses several advantages for borrowers and investors.

    The advantages of Eurobonds to borrowers are:

    • The size and depth of the market are such that it can absorb large and frequent issues.
    • The Eurobond market has freedom and flexibility not found in domestic markets.
    • The cost of the issue of Eurobonds, around 2.5 percent of the face value of the issue.
    • Maturities in the Eurobond market are suited to long-term funding requirements.
    • A key feature of the Eurobond market is the development of a sound institutional framework for underwriting, distribution, and the placing of securities.

    The advantages of Eurobonds to investors are:

    • Euro bonds are issued in such a form that interest can pay free of income or withholding taxes of the borrowing countries. Also, the bonds issued in bearer form and are held outside the country of the investor, enabling the investor to evade domestic income tax.
    • Issuers of Eurobonds have a good reputation for creditworthiness.
    • A special advantage to borrowers as well as lenders provides by convertible Eurobonds. Holders of convertible debentures give an option to exchange their bonds at a fixed price.
    • The Eurobond market is active both as a primary and as a secondary market.

    Bonds denominated in a particular currency that usually issues simultaneously in the capital markets of several nations. They differ from foreign bonds in that most nations do not have pre-offering registration or disclosure requirements for Eurobond issues. An Example of a Eurobond a bond issue by a Russian corporation in the European market that pays interest and principal in U.S. dollars.

    Meaning Definition Types and Advantages of Eurobonds
    Meaning, Definition, Characteristics, Types, and Advantages of Eurobonds. Image Credit from Online.
  • Features, Types, and Importance of Insurance

    Features, Types, and Importance of Insurance

    Insurance today has become an integral part of everyone’s life. It is a written contract of insurance that provides protection against future losses. Life insurance usually helps people to get life insurance. The insured gets a certain compensation from the insurer. Non-life insurance provides financial support to people or companies and helps them deal with losses. The basic human properties have to be contrary to the idea of taking the risk. Do you study to learn: If Yes? Then read the lot. Let’s Study: Features, Types, and Importance of Insurance. Read this in the Hindi language: बीमा की विशेषताएं, प्रकार, और महत्व…।

    The concept of Insurance Discussing the topic: Features, Types, and Significance or Importance of Insurance.

    Always insist on reducing risk and providing protection against potential failure. Risk includes fire, see danger, death, accidents, and theft. Any risk can insure on the premiums corresponding to premiums including in the risk. Thus the collective impact of risk is insurance which provides reasonable security and assurance that the assured will protect in the event of any type of disaster or failure. Before this study, once read this article: Meaning, Definition, Principles, and Functions of Insurance.

    Features of Insurance:

    With the above explanation, we can find these following characteristics, which are generally celebrating in the case of life, sea, fire, and general insurance.

    A large number of insured persons:

    To spread the damage easily and easily, a large number of individuals should be insured. A small number of individuals can also be co-operative insurance, but it is limit to a small area. The cost of insurance for each member can be high. So, it can be impossible. Therefore, to make the insurance cheaper, it is important to ensure a large number of individuals or property because the cost of the insurance company will be the cost and therefore, the lower premiums will be.

    Sharing risks:

    Insurance is an event that is a person to share a financial event that may occur when a specific incident occurs on a person or his family. This event may be the death of a breadwinner for the family in case of life insurance, marine insurance in the fire, fire in fire insurance and other events in general insurance, for example, theft in theft insurance, accident in motor insurance, And so on. The loss arising from these incidents, if the insured person is sharing by all insured persons in the form of premium.

    Price of Risk:

    The amount of the insured’s share, the risk is evaluated before considering the idea, consideration or the premium. There are several ways to evaluate risks. If the higher loss is expected, then a higher premium can be charged. Therefore, the probability of loss is calculated at the time of insurance.

    Cooperative Equipment:

    The most important feature of each insurance plan is the cooperation of a large number of individuals who in reality agree to share the financial loss arising from any particular risk of the insured. This group of individuals can be brought through voluntary or publicity or through the request of agents. An insurer will be unable to fill all the losses due to its loss. Therefore, by ensuring or underwriting a large number of persons, he is able to pay the amount of loss. Like all cooperative pieces of equipment, there is no obligation on anyone to buy an insurance policy.

    Payment on contingency:

    Payment is made on a certain casualty insured. If contingency happens then payment is made. Since the life insurance contract is the contract of certainty, because the termination, death or expiry of the term will definitely be, payment is definitely fixed. In other insurance contracts, contingency is fire or marine hazard etc., may or may not be. Therefore, if contingency happens, payment is made, otherwise, no amount is given to the policyholder. Similarly, in certain types of policies, payment is not guaranteed due to the uncertainty of any particular contingency within a particular period. For example, in term-insurance, payments are made only when the death of the assured is within the specified period, maybe one or two years. Similarly, pure endowment payments are done only in the existence of the insured at the end of the term.

    Payment of forty loss:

    Another feature of insurance is the cordial loss of payments. An amicable loss is that which is unpredictable and unpredictable and as a result of opportunity. In other words, the loss should be casual. The law of a large number is based on the assumption that the losses are casual and occur randomly. For example, a person can slip on the snowy path and break a leg. The loss will be lucky. The insurance policy does not deliberately cover issues.

    Amount of Payment:

    The amount of payment depends on the value of the loss due to special insured exposure, provided the insurance is up to that amount. In life insurance, the objective is not good to face financial loss. The insurer promises to pay a fixed amount upon the occurrence of an event. If event or accident occurs, the payment fails if the policy is valid and applies at the time of the incident, such as property insurance, the dependents will not need to prove the loss of loss and the amount of loss. It is infinite in life insurance What was the amount of loss at the time of contingency. But in the property and general insurance, the amount of loss, as well as the event of loss, is required to prove.

    Types of Insurance:

    The following types are given below:

    Life Insurance:

    Life insurance is different from other insurance, in that sense, the subject matter of insurance is the life of a human. The insurer will pay a certain amount of insurance at the time of death or at the end of a fixed term. At present, life insurance enjoys the maximum scope, because life is the most important asset of a person.

    “Life insurance is a contract under which the insurance company – in consideration of a premium paid in lump sum or periodical installments undertakes to pay a pre-fixed sum of money on the death of the insured or on his attaining a certain age, whichever is earlier.”

    Everyone needs insurance. This insurance provides protection to the family prematurely or provides adequate amounts in old age when reducing the capacity. Under Personal Insurance, the payment is made in the accident. Insurance is not only security but it is a type of investment because a certain amount can return the assured to the end of death or term.

    General Insurance:

    General insurance includes property insurance, liability insurance, and other forms of insurance. Fire and marine insurance are strictly called property insurance. Motor, theft, loyalty and machine insurance involve a certain extent of liability insurance. The strict form of liability insurance is fidelity insurance, from which the insurer compensates the insured for losses when he is subject to payment liability to the third party.

    Property Insurance:

    Under the property, the insured property of the person/person is insured against a certain specified risk. Risk can damage property in fire or marine hazard, property theft or accident. Property of any person and society is insured against the loss of insurance and marine hazards, the unexpected decline in the crop reduction, the unexpected death of the animals engaged in the trade, the destruction of the machines and property theft is insured and goods.

    Marine Insurance:

    The Marine insurance provides protection against the loss of sea threats. In threats are confronting with a rock, or ship, enemies, fire, and captured by the pirate etc. There is no reason for ship, goods and freight traffic and disappearances in these hazards. So, marine insurance ship (plow), goods and freight.

    “A contract of marine insurance is a contract under which the insurance company undertakes to indemnify the insured against losses which are incidental to the marine adventure.”

    Earlier only some minor risks were insured, but now the scope of marine insurance was divided into two parts; Ocean marine insurance and inland marine insurance. The former only ensures the sea threats, while later the insured perils are included which can produce by the insured’s well-known delivery of the cargo (gods) and can increase the cargo by the buyer (importer) Go down

    Fire Insurance:

    Fire insurance involves the risk of fire. In the absence of fire insurance, fire waste will not only increase the person but also the society. With the help of fire insurance, damages caused by fire are compensated and society is not much lost. The person is given prioritization of such loss and his property or business or industry will remain in the same condition in which it was before the loss. Fire insurance does not only protect the loss, but it also provides some resulting loss, under this insurance war risk, upheaval, riots etc. can also insure.

    “Fire insurance is a contract, under which the insurance company, in consideration of a premium payable by the insured, agrees to indemnify the assured for the loss or damage to the property insured against fire, during a specified period of time and up to an agreed amount.”

    Liability insurance:

    General insurance also includes liability insurance, from which the insured is liable to pay the loss of property or to compensate for the loss of personality; Injury or death is seen as insurance fidelity insurance, automobile insurance, and machine insurance etc.

    Social insurance:

    Social insurance is to provide security to the weaker sections of the society who are unable to pay the premium for adequate insurance. Pension schemes, disability benefits, unemployment benefits, sickness insurance, and industrial insurance are different forms of social insurance. Insurance can classify into four categories from the risk point.

    Personal Insurance:

    Personal insurance includes insurance of human life which can cause damage due to death, accident, and illness. Therefore, individual insurance is further classifying by life insurance, personal accident insurance, and health insurance.

    Guaranteed Insurance:

    Guarantee insurance includes losses caused by dishonesty, disappearance, and employee or other party’s loyalty. The party must be a party to the contract. Their failure damages the first party. For example, in export insurance, the insurer will compensate the importer on the failure to pay the amount of loan.

    Miscellaneous insurance:

    Property, goods, machines, furniture, automobiles, valuable articles etc. maybe insure against damage or destruction due to accident or disappearance due to theft. There are different forms of insurance for each type of property, which not only provides property insurance but also liability insurance and personal injury is also insurers.

    Other forms of insurance:

    In addition to property and liability insurance, there is other insurance which is including in general insurance. Examples of such insurance are export-credit insurance, state employee insurance so that the insurer guarantees to pay a certain amount on certain events.

    The Importance and significance of Insurance:

    The process of insurance has developing to protect the interests of people with uncertainty by providing certainty of payment on any contingency. Insurance not only serves the ends of special groups of individuals, or individuals, it also transmits and transforms our modern social order.

    Here the role and importance of insurance have been discussed with the point of view of insurance, insurance, and society.

    Importance of Insurance to Individuals:

    • Insurance provides safety and security.
    • Also provides peace of mind.
    • Protects the mortgaged property.
    • They eliminate dependence.
    • Life-insurance encourages saving, and.
    • Life insurance provides profitable investment.

    Importance of Insurance to Business:

    • Business efficiency is increasing with insurance.
    • Enhancement of Credit.
    • Business continuation, and.
    • The welfare of the Employee.

    Importance of Insurance to Society:

    • The wealth of society is protecting, and.
    • Economic Growth of the country.

    The significance of Insurance:

    We can highlight the significance of insurance, in terms of the following advantages offered by it:

    • Concentration on Business Issues: Insurance help businessmen to concentrate their attention on business issues, as their risks are undertaken by the insurance company. Insurance gives them peace of mind. Thus due to insurance, business efficiency increases.
    • Better Utilization of Capital: Businessmen, in the absence of insurance, will maintain funds for meeting future contingencies. Insurance does away with this need to maintain contingency funds by them. Thus businessmen can better utilize their funds for business purposes.
    • Promotion of Foreign Trade: There are many risks in foreign trade much more than involved in the home trade. Insurance of risks involved in foreign trade gives a boost to its volume, which is a healthy feature of economic development.
    • The feeling of Security to Dependents: Life insurance provides a feeling of economic security to the dependents of the insured, on whose life insurance is affected.
    • Social Welfare: Life insurance also provides for policies in respect of education of children, the marriage of children etc. Such special policies provide a sense of security for the poor who take these policies. Thus life insurance is a device for ensuring social welfare.
    • Speeding Up the Process of Economic Development: Insurance companies mobilize the savings of the community through the collection of premiums and invest these savings in productive channels. This process speeds up economic development. Huge funds at the disposal of LIC (Life Insurance Corporation) available for investment purposes support the above-mentioned point of advantage of insurance.
    • Generation of Employment Opportunities: Insurance companies provide a lot of employment in the economy. This is due to the ever growing business done by insurance companies. Read this in the Hindi language: बीमा की विशेषताएं, प्रकार, और महत्व…।

    Features Types and Importance of Insurance

  • Meaning, Definition, Benefits, and Objectives of Career Planning

    Meaning, Definition, Benefits, and Objectives of Career Planning

    Career Planning; Career planning encourages individuals to explore and gather information, which enables them to syn­thesize, gain competencies, make decisions, set goals and take action. Meaning: Career is seen as a collection of bunch or jobs or posts. Generally, it describes an applies career path within the organization’s structure. It shows the development path of key personnel within the organization. The derivation of the word derived from the Latin word carrier, which means running. Do you study to learn: If Yes? Then read the lot. Let’s Study: Meaning, Definition, Benefits, and Objectives of Career Planning. Read this in the Hindi language: करियर योजना का अर्थ, परिभाषा, लाभ, और उद्देश्य। 

    The concept of Career Planning Discussing the topic: Meaning, Definition, Benefits, Process, Features, and Objectives of Career Planning.

    All the jobs, which are organized together during the working life of someone, make careers. It is also seen as a sequence of posts organized by a person during his employment. Edwin B. Flipo defined a career as a sequence of different but related work activities that provides continuity, order, and meaning in a person’s life. As well as, a career can be seen as the amalgamation of change in value, attitude, and motivation because it gets old. This concept constitutes the subjective element of “careers”.

    Definition of Career Planning:

    Career planning is the process of enhancing an employee’s future value. A career plan is an individual’s choice of occupation, organization and career path.

    A career may define as,

    “A sequence of jobs that constitute what a person does for a living.”

    According to Schermerborn, Hunt, and Osborn,

    “Career planning is a process of systematically matching career goals and individual capabilities with opportunities for their fulfillment.”

    Career planning encourages individuals to explore and gather information, which enables them to syn­thesize, gain competencies, make decisions, set goals and take action. It is a crucial phase of human resource development that helps the employees in making a strategy for work-life balance.

    Below described several themes underlying different definition of a career as:

    1] The property of occupation or organization:

    In this way, the career describes the occupation itself or an employee’s tenure within an organization.
    Advancement: It denotes the progression and increase in success an individual receives within an occupation or organization.

    2] Status of a profession:

    In this sense, a career uses to distinguish different professions. Such as engineering, the medical profession is different from other occupations like plumbing carpentry, etc. The former says to have a career where the latter does not have.

    3] Involvement in one’s work:

    Sometimes the career use in a negative sense to describe being extremely involved in the task or job one is doing.

    4] Stability of a person’s work pattern:

    Career describes a sequence of related jobs. While a sequence of unrelated jobs does not describe career.

    Career is often defined as both an external career and an internal career. External career is defined as objective categories used by a given society and different organizations to describe the progression of steps of the different occupations. Whereas an internal career involves the set of steps and stages that make up an individual’s concept of career progression in a given occupation.

    Due to two different approaches, in the organizational context, career is considered as an integrated pace of both vertical and lateral movements of an individual in occupation during the span of his employment. Such an integrated approach is intended to minimize diversity of hopes and expectations of employees by obtaining a match between individually perceived careers with that of organizational centered careers.

    Benefits of career planning:

    The following benefits are given below:

    • The career plan ensures the continuous supply of promotional employees.
    • It helps in improving employee loyalty.
    • Career planning encourages the development and development of the employee.
    • Discourages the negative attitude of senior officials who interest in suppressing the development of subordinates.
    • This ensures that senior management knows the capacity and capacity of those employees who can move upwards.
    • It can always make a team of employees ready to meet any contingency.
    • Career planning reduces the labor business.
    • Each organization prepares the successor plan on which the career plan is the first step.

    The process of career planning:

    Career plans involve different activities for successful organizations and generally include the following steps.

    1] Identifying personal needs and aspirations:

    Most individuals do not have a clear-cut about their career aspirations, anchors and goals. Therefore, human resources professionals should help an employee in this direction and provide as much information as possible. Keeping in mind their skills, experience, and ability, they are shown such work, which will make them the most suitable. Workshops, seminars can also arrange to enhance such support with psychological testing, simulation exercises. Such a practice is basically to help create a clear view of the career of a chosen business within a company.

    Workshops and seminars promote employee interest in career planning, as it helps employees to determine their career goals, identify career paths and highlight specific career development activities. Printed and other types of information can also provide to complement individual efforts. Also, helping employees better, organizations create data banks or skills and talent lists, which include career history, skill evaluation, and information about their employees’ career priorities.

    2] Analyzing career opportunities:

    Once you know the career requirements and the aspirations of the employees, the organization determines the career path for each situation, which clearly shows career progression prospects. It points to different situations, a good artist can catch in a period. Career paths change over time, according to the needs of the employee and organizational needs.

    3] Aligning needs and opportunities:

    After identifying the needs of the employees and their career opportunities, the next step is to align the former with the former. This process involves identifying the ability of employees and then starting a career development program. The efficiency of the staff can demonstrate a thorough evaluation.

    This will know the employees who need further training, who can take additional responsibilities, etc. Some development techniques are used to consider employee’s information and skills in an employee capacity. It includes special assignments, schematic position rotation, supervisory coaching, job enhancement, weak program, etc.

    4] Action plans and periodic reviews:

    After starting the above steps, it is necessary to review the whole items from time to time to highlight the gap. These intervals have to be a bridge through personal career development efforts and from time to time supported organizations.

    Periodic review will help employees know the direction in which it is moving, whether the change is sought, what kind of skills required to face new and emerging organizational challenges. Organizations also find out how employees are doing, their goals and aspirations, and what career paths are in line with personal needs and serve the whole corporate.

    Features of Career Planning:

    The following features of career planning are below:

    1] Process:

    Career planning is an ongoing process of developing human resources. It is neither an event nor a program.

    2] Upward movement:

    It involves upward movement in the organizational hierarchy. It could also be special assignments, completing a project that requires better skills and abilities to handle recurring problems.

    3] Mutuality of Interest:

    Career plans serve a mutuality of interest. It serves the individual’s interest by taking care of his needs and aspirations to the required extent. Simultaneously it serves the organization’s interest as the human resources of an organization provide the opportunity to develop and contribute to the organization’s goals for the fulfillment of its objectives to the best of their ability and confidence.

    4] Dynamic:

    The dynamic nature of career planning is to cope and adjust to the ever-changing environment.

    Objectives of Career Planning:

    Career planning aims at matching individual potential for promotion and individuals aspirations with organizational needs and opportunities. Career planning is making sure that the organization has the right people with the right skills at the right time. It opens avenues for growth to higher levels of responsibilities for every employee of the organization through the hierarchy of position, and training and development activities to equip the individuals with the requisites for succession.

    Generally, Career Planning aims at fulfilling the following objectives:

    • It provides and maintains appropriate human resources in an organization by offering careers, not jobs.
    • It creates an able environment of effectiveness, efficiency, and growth.
    • Maps out careers of different categories of employees, following their ability and willingness to “train and develop” to take the responsibility of higher positions.
    • It seeks to maintain a stable workforce within an organization by controlling absenteeism and reducing employee turnover.
    • Caters to the immediate and future human resource needs of the organization at the appropriate time.
    • Increases the proper utilization of managerial reserves within the organization.

    The major objectives of career planning are as follows:

    • To identify the positive characteristics of the employees.
    • Develop awareness about each employee’s uniqueness.
    • To respect the feelings of other employees.
    • To attract talented employees to the organization.
    • Train employees towards team-building skills.
    • To create healthy ways of dealing with conflicts, emotions, and stress.

    Understand career planning:

    Since both the person and the organization interest in one’s career, the career plan itself is an intentional process to be aware of the current obstacles with available opportunities, alternative options, and sequences. As well as, it involves identifying targets related to careers to provide the right direction, appropriate time and sequence for achieving a specific career goal and doing work education and related development practice.

    Essentially, career planning helps employees plan for their careers in terms of their capabilities and competencies in terms of organizational needs. It is related to developing the organizational system of career movement and development. This gives opportunities for any person to progressive and continuously from an entry point of his employment at the point of his retirement. It has also been described as the process of synthesizing and reconcile the organization’s needs with the innate aspirations of the employees so that afterward, realize the self-fulfillment and improve the effectiveness of the former.

    Extra Things:

    Career planning is an ongoing process by which a person determines their career goals and identifies the means and methods of achieving them. The way people plan their life’s work, they consider a career plan. It inspires someone to explore, choose and endeavor to achieve satisfaction with the purpose of a person’s career. Therefore a person’s life is important.

    The effective career plan is about finding a suitable job that corresponds to the life of a person. The Career Plan answers the question, where are the possibilities of going forward and growing in the organization for a person to be in the organization after five years or ten years or to build the realm of someone’s career. Career planning is neither an event nor an end. Also, it is a continuous process for human resources development and an essential aspect of managing people to achieve optimal results.

    Why is the need for Career planning for employees?

    The need to plan for employee careers is due to both economic and social power. In an ever-changing environment, the human resources of the organization should be in a constant state of development and should be there. A planned program of internal human resources development pays more than relieving external recruitment for recruitment. At the top, many employees retire at the job when there is no managerial concern for proper career progression.

    Apart from this, employees of Millennium Day insist and hope that their work expects to integrate effectively with human needs for personal development, together with family expectations, meet the ethical requirements of the society. However, it is most ironic that, as far as the work is concerned, what is the most valuable for the person, the career is, the organization gets the least attention. As well as, most organizations do not pay enough attention to this important aspect of actual practice for various reasons. As a result, the demand for employees does not match adequately with systematic arrangements.

    More knowledge:

    Career planning is an indispensable condition for effective human management to achieve optimum productivity, for organizational development and development, keeping in mind the increasing expectations and aspirations of changing scenarios of the social and economic environment and employees. Generally, a person applies for the job in the organization after making necessary inquiries about job prospects and after taking a job, he starts inquiring about job prospects and future potential situation.

    Disadvantaged of satisfactory answers, a person feels motivated and frustrated and starts looking out of the organization in search of any other possible job. Generally, this is a normal situation for individuals with senior supervisory, executive and managerial positions. As well as, employees holding such a position are curious to know that they can grow in their current positions, organization and when. To attract and maintain competent personnel for senior positions in an organization, they must be assured of a progressive career.

    Thus, career planning has become necessary to prevent such personnel from managing the organization with skilled supervisors, high technical and managerial personnel to manage an organization and the lack of promotional routes. Productive employees want to seek careers instead of short-term jobs. Also, a career scheme, if properly designed and implemented, benefits management and employees and its absence makes a big difference for both the employees and the organization. Read this in the Hindi language: करियर योजना का अर्थ, परिभाषा, लाभ, और उद्देश्य। 

    Meaning Definition Benefits and Objectives of Career Planning
    Meaning, Definition, Benefits, and Objectives of Career Planning.
  • Marketing Management Meaning, Characteristics, and Objectives

    Marketing Management Meaning, Characteristics, and Objectives

    Meaning: Marketing management facilitates The activities and functions which are involved in the distribution of goods and services. Marketing Management Meaning, Characteristics, and Objectives. Their sales plan to a greater extent rest upon the requirements and motives of the consumers in the market. This objective, the organization has to pay heed to the right pricing, effective advertising and sales promotion, distribution and stimulating the consumers through the best services.

    You are one of a Seller or Buyer in Market, So let’s know Marketing Management of Meaning, Characteristics, and Objectives. With Meaning and Definition.

    What is Marketing Management? Marketing management signifies an important functional area of the business manager responsible for the flow of goods and services from the producers to the consumers. It is accountable for planning, organizing, directing, coordinating, motivating and controlling the marketing activities. The types of Product in Marketing Management! In effect, it is the demand management under customer-oriented marketing philosophy.

    Meaning of Marketing Management:

    Marketing management is the management of the crucial and creative task of delivering consumer satisfaction and thereby earning profits through consumer demand. It is the performance of managerial functions of planning, execution, coordination, and control in relation to the marketing functions of marketing research, product planning and development, pricing, advertising, selling and distribution with a view to satisfying the needs of the consumer, business and society. The above expressions bring home very clearly the very substance of marketing management as a matter of planning, implementing and controlling the marketing programmes.

    Marketing management is the marketing concept in action. It includes all activities which are necessary to determine and satisfy the needs of consumers. To be very simple, marketing management sets marketing objectives, develops marketing plans, organizes marketing functions, puts marketing plans and strategies in action and monitors the marketing programmes in the final analysis. Effective marketing management requires the ability and skill of the highest order.

    It warrants close appreciation of the consumer and an understanding of forces of change which are at work in the environment and which have the deep-rooted impact on consumer buying habits and motives. It calls for fertile imagination and creative skill in planning to meet the changing conditions of the marketplace; it also requires skills of coordinating and controlling the wide-spread and complex activities of a dynamic organization. The prime purpose of marketing management is to know the consumer so well that the firm is able to offer him or her products and services to which the consumer remains loyal and the new consumers keep on coming at increasing level.

    Definition of Marketing Management:

    According to Philip Kotler, “Marketing management is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target markets for the purpose of achieving organizational objectives. It relies heavily on designing the organizations offering in terms of the target markets needs and desires and using effective pricing, communication, and distribution to inform, motivate and service the market.”

    Marketing management is concerned with the chalking out of a definite programme, after careful analysis and forecasting of the market situations and the ultimate execution of these plans to achieve the objectives of the organization. Marketing management is “The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value” by Kotler and Keller.

    Features or Characteristics of Marketing Management:

    Some of the main points characteristics of marketing management are as follows:

    Customer-Orientation:

    All business activities should be directed to create and satisfy the customer. Emphasis on the needs and wants of consumers keeps the business on the right track. All marketing decisions should be made on the basis of their impact on the customer. The consumer becomes the guise of business. Also, learn Explaining Product Development in Production Management.

    Marketing Research:

    Under the marketing concept; knowledge and understanding of customer’s needs want and desires is very vital. Therefore, a regular and systematic marketing research programme is required to keep abreast of the market. In addition, innovation and creativity are necessary to match the products of requirements of customers.

    Marketing research is “the process or set of processes that link the producers, customers, and end users to the marketer through information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.” by Wikipedia.

    Up-to-date and adequate knowledge must be available to answer the following questions:

    • What business are we really in?
    • Who are our customers?
    • What do the customers want?
    • How should we distribute our products?
    • How can we communicate most effectively with our customers?’
    Marketing Planning:

    The marketing concept calls for a goal-oriented approach to marketing. The overall objectives of the firm should be the earning of profits through the satisfaction of customers. “A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, without a sound strategic foundation, it is of little use to a business” by Wikipedia. On the basis of this goal, the objectives and policies of marketing and other departments should be defined precisely. Marketing planning helps to inject the philosophy of consumer-orientation into the total business systems and serves as a guide to the organization’s efforts.

    Integrated Marketing:

    Once the organizational and departmental goals are formulated, it becomes necessary to harmonize the organizational goals with the goals of the individuals working in the organization. The activities and operation of various organizational units should be properly coordinated to achieve the defined objectives. The marketing department should develop the marketing mix which is most appropriate for accomplishing the desired goals through the satisfaction of customers.

    Customer Satisfaction:

    “Customer satisfaction is a term frequently used in marketing. It is a measure of how products and services supplied by a company meet or surpass customer expectation” by Wikipedia. The aim should be to maximize profit over the long run through the satisfaction of customers wants.

    Aim or Objectives of Marketing Management:

    In the light of this statement, we can highlight the aim’s of marketing management as follows:

    • Creation of Demand: The marketing management’s first objective is to create demand through various means. A conscious attempt is made to find out the preferences and tastes of the consumers. Goods and services are produced to satisfy the needs of the customers. Demand is also created by informing the customers about the utility of various goods and services.
    • Customer Satisfaction: The marketing manager must study the demands of customers before offering them any goods or services. Selling the goods or services is not that important as the satisfaction of the customers’ needs. Modern marketing is customer- oriented. It begins and ends with the customer.
    • Market Share: Every business aims at increasing its market share, i.e., the ratio of its sales to the total sales in the economy. For instance, both Pepsi and Coke compete with each other to increase their market share. For this, they have adopted innovative advertising, innovative packaging, sales promotion activities, etc.
    • Generation of Profits: The marketing department is the only department which generates revenue for the business. Sufficient profits must be earned as a result of the sale of want-satisfying products. If the firm is not earning profits, it will not be able to survive in the market. Moreover, profits are also needed for the growth and diversification of the firm.
    • Creation of Goodwill and Public Image: To build up the public image of a firm over a period is another objective of marketing. The marketing department provides quality products to customers at reasonable prices and thus creates its impact on the customers.
    • Creating Customers: A business firm is established to sell a product or service to customers. Therefore, the customer is the foundation of a business. It is the customer who provides revenue to business and determines what an enterprise will sell. Creating customers means exploring and identifying the needs and requirements of customers. If a firm is to go and stay in business, it must create new customers. It should analyze and understand their wants.
    • Satisfying Customers Needs: Creating customer is not enough. Business should develop and distribute products and services which meet the requirements of customers to their satisfaction. If customers are not satisfied, the business will not be able to generate revenues to meet its costs and to earn a reasonable return on its capital. Satisfying customers does not simply mean matching products with customers’ needs. It also requires the regular supply of goods and services of reasonable quality at fair prices.

    The marketing manager attempts to raise the goodwill of the business by initiating image-building activities such a sales promotion, publicity and advertisement, high quality, reasonable price, convenient distribution outlets, etc. The objectives of marketing management have been obtained from the overall objectives of the business. The overall aim of the business is to create, develop and serve society with other things. Marketing management can contribute to the achievement of these objectives by developing and distributing those objectives and services that meet the needs of the customers and benefit the business enterprise.

    Summary: Marketing Management Meaning, Characteristics, and Objectives.

    What is Marketing Management? Explains.

    1. Meaning of Marketing Management.

    2. Definition of Marketing Management.

    3. Features or Characteristics of Marketing Management, and:

    • Customer-Orientation.
    • Marketing Research.
    • Marketing Planning.
    • Integrated Marketing, and.
    • Customer Satisfaction.

    4. Objectives of Marketing Management:

    • Creation of Demand.
    • Customer Satisfaction.
    • Market Share.
    • Generation of Profits.
    • Creation of Goodwill and Public Image.
    • Creating Customers, and.
    • Satisfying Customers Needs.

    Marketing Management Meaning Characteristics and Objectives

  • The Project is explained in Features, Characteristics, and Objectives

    The Project is explained in Features, Characteristics, and Objectives

    A Project is an activity to make something unique. Of course, many office buildings are Built-in many respects, but each individual feature is unique in its own way. The Project is explained in Features, Characteristics, and Objectives. One person or organization involved in projects need to understand how to solve the complexity of problems through project management. In this article, we will define the word “project”, describe the key features of a project, and explain the way to separate a project from an activity.

    The Project has explained in some points Nature, Features, Characteristics, and Objectives.

    What is a Project? Meaning, Definition, and Nature.

    The project is a great opportunity for organizations and individuals to achieve their business and non-business objectives more efficiently through implementing change. Projects differ from other types of work (e.g. process, task, procedure). Meanwhile, in the broadest sense, a project is defined as a specific, finite activity that produces an observable and measurable result under certain preset requirements. Projects help us make desired changes in an organized manner and with reduced probability of failure.

    It is an attempt to implement the desired change in an environment in a controlled way. “A Project is a temporary, unique and progressive attempt or endeavor made to produce some kind of a tangible or intangible result (a unique product, service, benefit, competitive advantage, etc.). It usually includes a series of interrelated tasks that are planned for execution over a fixed period of time and within certain requirements and limitations such as cost, quality, performance, others.” By using projects we can plan and do our activities, For Example: build a garage, run a marketing campaign, develop a website, organize a party, go on vacation, graduate a university with honors, or whatever else we may wish to do.

    According to the PMBOK (Project Management Body of Knowledge), A project is defined as a “temporary endeavor with a beginning and an end and it must be used to create a unique product, service or result”. Further, it is progressively elaborated. What this definition of a project means is that projects are those activities that cannot go on indefinitely and must have a defined purpose. A project is an activity to meet the creation of a unique product or service and thus activities that are undertaken to accomplish routine activities cannot be considered projects.

    A project is defined as “A non-routine, non-repetitive one-off undertaking normally with—discrete time, financial and technical performance goals.” The definition is descriptive and, because of the endless variety of projects, most of the definitions are of this nature.

    A project can consider being any series of activities and tasks that:

    • Have a specific objective to be completed within certain specifications.
    • Have defined start and end dates.
    • Have funding limits (if applicable), and.
    • Consume resources (i.e. money, time, equipment).

    The Project is explained, Definition of a Project:

    The project starts from scratch with a definite mission, generates activities involving a variety of human and non-human resources, all directed towards the fulfillment of the mission and stops once the mission is fulfilled.

    According to the Project Management Institute, USA, “a project is a one-set, time-limited, goal-directed, major undertaking requiring the commitment of varied skills and resources”.

    It also describes a project as “a combination of human and non-human resources pooled together in a temporary organization to achieve a specific purpose”. The purpose and the set of activities which can achieve that purpose distinguish one project from another.

    “A project consists of a combination of organizational resources pulled together to create something that did not previously exist and that will provide a performance capability in the design and execution of organizational strategies.”
    “A project is a temporary process undertaken to create one or a few units of a unique output or product or service whose attributes are progressively delineated in the course of the project’s execution.”

    The Project is explained – Second point, Characteristics or Features of a Project:

    The characteristics or features of a project are as follows:

    • Objectives: A project has a fixed set of objectives. Once the objectives have been achieved, the project ceases to exist.
    • Life-cycle: A project has a life cycle reflected by growth, maturity, and decay. It has naturally a learning component.
    • Uniqueness: No two projects are exactly similar even if Die plants are exactly identical or are merely duplicated. The location, the infrastructure, the agencies, and the people make each project unique.
    • Change: A project sees many changes throughout its life while some of these changes may not have any major impact; they can be some changes which will change the entire character of course of the project.
    • Life Span: A project cannot continue endlessly. It has to come to an end. What represents the end would normally be spelled out in the set of objectives.
    • Single entity: A project is one entity and is normally entrusted to one responsibility center while the participants in the project are many.
    • Team-work: A project calls for team-work. The team again is constituted of members belonging to different disciplines, organizations, and even countries.
    • Made to order: A project is always made to the order of its customer. The customer stipulates various requirements and puts constraints within which the project must execute.
    • Unity in diversity: A project is a complex set of thousands of varieties. The varieties are in terms of technology, equipment, and materials, machinery and people, work culture and ethics. But they remain inter-related and unless this is so, they either do not belong to the project. Or will never allow the project to be completed.
    • Successive principle: What is going to happen during the life cycle of a project is not fully known at any stage. The details get finalized successively with the passage of time. More is known about a project when it enters the construction phase than what was known to say, during the detailed engineering phase.
    • Risk and uncertainty: Every project has risk and uncertainty associated with it. The degree of risk and uncertainty will depend on how a project has passed through its various life-cycle phases. An ill-defined project will have the extremely high degree of risk and uncertainly Risk and uncertainty are not part and parcel of only R and H projects there simply cannot be a project without any risk and uncertainty.
    • High level of sub-contracting: A high percentage of the work in a project is done through contractors. The more the complexity of the project, the more will be the extent of contracting. Normally around 80% of the work in a project is done through sub-contractors.

    Key of Characteristics:

    As follows from the given definition, any project can be characterized by these characteristics:

    Temporary:

    This key characteristic means that every project has a finite start and a finite end. The start is the time when the project is initiated and its concept is developed. The temporary nature of a project indicates that a project has a definite beginning and a definite end.

    The beginning is marked by the start of the project and the end is reached when the project’s objectives have been achieved or when the project is terminated for some other reason. ‘Temporary’ is also one of the characteristics distinguishing a project from normal operations. The end is reached when all objectives of the project have been met (or unmet if it’s obvious that the project cannot be completed – then it’s terminated).

    Unique Deliverable’s:

    Any project aims to produce some deliverable(s) which can be a product, service, or some another result. Every project is unique and different. This is another aspect that differentiates a project from normal operations. Deliverables should address a problem or need analyzing before project start. Repetitive elements may be present in project deliverables and activities, but there is always something different about those elements or the way in which they are combined.

    Once again, a building construction project can serve as a conceptual example. A specific structure may be designed by people who have designed other buildings, constructed by people who have built other buildings, and made from the same materials as other buildings. Yet, an individual building project brings those elements together in a unique way; A particular building of a specific design for an exact purpose using selected materials all combine to create a unique construction project.

    Progressive Elaboration:

    With the progress of a project, continuous investigation and improvement become available, and all this allows producing more accurate and comprehensive plans. This key characteristic means that the successive iterations of planning processes result in developing more effective solutions to progress and develop projects.

    Creating Output:

    Every project creates some type of product, service, or end result. These outputs are called deliverables and they are the reason projects exist and take place. Project output can be both tangible and intangible. An example of tangible project output is the building resulting from a construction project. Examples of intangible projects include new services or events.

    The Project is explained – and the Last Point, Objectives of a Project:

    The “Project” is a means to achieve a “goal”. By the completion of projects, the creative part (of the projected asset) comes to an end and, thereupon, the project-created tangible thing is used to achieve the goal. So, primarily, there is a goal aimed at by the project owner and, in order to achieve that goal, he initiates the “project”. Accordingly, before we deal with the project objectives, we would like to go through the possible objectives of the project owner.

    First Objectives, A popular expression runs:

    “Project grows out of needs or opportunities.” The project, in general, is undertaken when the need or opportunity is identified, a proposal is crystallized in form of a project, the proposal is then transformed into necessary activities to build-up the project, e.g. setting up a plant. Along with further analyses and appraisal of the project technical, financial etc. a firm decision is made about launching a project.

    At this point, the project objectives are set which becomes the ultimate philosophy for the project team. Any project decision is based upon the full evaluation of its impact upon the project objectives.

    The project, when finalized, has the following objectives:

    • It has a time-bound programme to start, execute, commission and delivery of the project;
    • It has cost-bound activities in terms of money spent or resources consumed so that total cost is within the total estimated project cost as agreed and authorized by the project owner and
    • It shall conform to the technical specifications set at the point of deciding upon the project. In others words, the delivery (of the project) shall have to be of the agreed quality.

    Second Objectives, Without Money-Making Mission:

    • There are situations where projects need to be implemented with social objectives. Primarily, these are undertaken by the government—non-industrial projects aimed towards the social benefits as, public health, irrigation, education etc. The government, being the owner of these projects, provides funds for such projects.
    • Projects are also undertaken on account of emergency and/or need of national importance e.g. defense and security. Even though such projects can be highly complex and costly phenomena as constructing an aircraft landing facility at high altitude—such projects are non-industrial and funded by the government.
    • There are projects within an industrial organization with the social objective, being necessary as per local legal regulations, e.g. Instituting facilities for health-care, education, sports etc. within a township built-up by a very large industrial organization. Influence of ‘politics’ also plays an important role in location, timing, and size of such projects.
    • There are instances where industrial organizations are aspiring to achieve and/or maintain a leading position in the trade/industry. In such a situation, the organization decides to spend some of its resources on Research and Development activities including research in finding out new products, new processes, development of existing products etc. to avail the cost benefit.

    The management of such an organization decides to go ahead for the Research and Development projects with a plan to install facilities to search for the probable product and/or process. Installation of such project includes the establishment of a laboratory with sophisticated equipment, the appointment of professionals and the supply of necessary consumables.

    In all such cases mentioned in (a) to (d) above the project is confined to budgeted costs and, obviously, no revenue/income is involved. There is a scope of deliberation on expenses involved, considering the resources available in the organization. There may be the limitation and/or deferment of the expenses under this type of project as per the decision of the management.

    The Project is explained in Features Characteristics and Objectives
    Image credit from #Pixabay.
  • Accounting Principles points in Meaning Definition and Features

    Accounting Principles points in Meaning Definition and Features

    Explore the importance of accounting principles. Learn about their meaning, definition, and features, and understand how they guide the efforts of accountants and auditors. To search for the goals of the accounting profession and for expanding knowledge in this field, A logical and useful set of principles and procedures are to develop. Explained each one point, Accounting Principles points in Meaning Definition and Features. We know that while driving our vehicles, follow standard traffic rules.

    Accounting Principles Understand in these points Meaning, Definition, and Features.

    Without adhering traffic rules, there would be much chaos on the road. Similarly, some principles apply to the account. Thus, the accounting profession cannot reach its goals in the absence of a set of rule to guide the efforts of accountants and auditors. The rules and principles of accounting are commonly referring to as the conceptual framework of accounting.

    Meaning of Accounting Principles:

    They are a man make. Unlike the principles of Physics, Chemistry and other natural sciences; accounting principles were not deduced from basic axioms, nor their validity is verifiable through observations or experiments. These principles are drawn from the practical practice of accounting.

    Definition of Accounting Principles:

    They have been defining by the Canadian Institute of Chartered Accountants as,

    “The body of doctrines commonly associated with the theory and procedure of accounting serving as an explanation of current practices and as a guide for the selection of conventions or procedures where alternatives exist. Rules governing the formation of accounting axioms and the principles derived from them have arisen from common experience, historical precedent statements by individuals and professional bodies and regulations of Governmental agencies.”

    According to Hendriksen (1997), Accounting theory may define as logical reasoning in the form of a set of broad principles that;

    • Provide a general frame of reference by which accounting practice can evaluate, and.
    • Guide the development of new practices and procedures.

    The theory may also use to explain existing practices to obtain a better understanding of them. But the most important goal of accounting theory should be to provide a coherent set of logical principles that form the general frame of reference for the evaluation and development of sound accounting practices.

    No list of universally accepted principles can prepare but still, certain principles are drawn which are acceptable by most of the accountants.

    According to the Terminology Committee of AICPA,

    “The word principles are used to mean a general law or rule adopted or preferred as a guide to action; a settled ground or basis of conduct or practice.”

    A.W. Johnson describes as,

    “Broadly speaking, these principles are the assumptions and rules of accounting, the methods, and procedures of accounting and the application of these rules, methods, and procedures to the actual practice of accounting.”

    Definition and Explanation:

    Accounting is the language of business through which economic information is communicating to all the parties concerned. In order to make this language easily understandable all over the world, it is necessary to frame or make certain uniform standards which are accepting universally. These standards are termed “Accounting Principles”.

    They may define as those rules of action or conduct which are adopting by the accountants universally while recording accounting transactions. It is a body of doctrines commonly associated with the theory and procedures of accounting. They are serving as an explanation of current practices and as a guide for the selection of conventions or procedures where alternatives exist.

    The American Institute of Certified Public Accountants (AICPA) has advocated the use of the word” Principle” in the sense in which it means “rule of action”. It discusses the generally accepted accounting principles as follows: Financial statements are the product of a process in which a large volume of data about aspects of the economic activities of an enterprise are accumulating, analyze and report.

    This process should carry out in conformity with generally accepted accounting principles. These principles represent the most current consensus about how accounting information should record, what information should disclose, how it should disclose, and which financial statement should prepare. Thus, generally accepted principles and standards provide a common financial language to enable informed users to read and interpret financial statements. Thus, we may define Accounting Principles as those rules of action or conduct which are adopting by the accountants universally while recording accounting transactions.

    Features of Accounting Principles:

    They are synthetic. It is acceptable because they are believing to be useful. The general acceptance of an accounting principle usually depends on how well it meets the following three basic norms:

    • Usefulness.
    • Objectiveness and.
    • Feasibility.

    A principle is useful to the extent that it results in meaningful or relevant information to those who need to know about a certain business. In other words, an accounting rule, which does not increase the utility of the records to its readers, is not acceptable as an accounting principle. A principle is objective to the extent. That the information is not influencing by the personal bias or Judgement of those who furnished it. Accounting principle says to be objective when it solidly supports by facts. Objectivity means reliability which also means that the accuracy of the information reported can verify.

    Accounting principles should be such as are practicable. A principle is feasible when it can implement without undue difficulty or cost. Although these three features are generally finding in accounting principles. An optimum balance of three is struck in some cases for adopting a particular rule as an accounting principle. For example, the principle of making the provision for doubtful debts find on feasibility and usefulness though it is less objective. This is because of the fact that such provisions are not supporting by any outside evidence.

    Essential Features of Accounting Principles:

    They are acceptable if they satisfy the following norms:

    Relevance or Usefulness:

    A principle will be relevant only if it satisfies the needs of those who use it. The accounting principle should be able to provide useful information to its users otherwise it will not serve the purpose. Also, know this What do you think of Data Warehousing?

    Objectivity:

    A principle will say to be objective if it bases on facts and figures. There should not be a scope for personal bias. If a principle can influence the personal bias and whims of users. It will not be an objective principle and its usefulness will limit. The cost principle will be more useful than the value principle. Because the value will base on market prices and personal judgment will differ in finding out value.

    Feasibility:

    The accounting principles should be practicable. The principles should be easy to use otherwise their utility will limit. While showing fixed assets in the balance sheet, it will be more feasible to take cost less depreciation. If the assets are shown on market value or replacement cost basis. Then, it will involve difficulties and different persons will take different values because market prices go on changing every time.

    The features mentioned above should be present in accounting principles. But in some cases, the optimum balance of these features is struck for adopting. A particular rule as the accounting principle. Sometimes one feature may have to sacrifice for the other so that it may adopt as the principle. Explains and define Entrepreneurial Marketing and SME.

    We may show fixed assets at replacement cost. Because it is practicable and actual cost principle may not be able to give correct results. As the rise in price index will make it less useful. Similarly, the principle of making provision for doubtful debts founds on the feasibility and usefulness basis though it is less objective. Such provisions are not supporting by any outside evidence and there is always a fear of personal bias.

  • A Good Advertisement Copy: Features, Types, and Benefits

    A Good Advertisement Copy: Features, Types, and Benefits

    The advertisement copy refers to the written contents of the advertisement including its text and headline. This article explains about A Good Advertisement Copy with discussion by Features, Types, and Benefits. It can refer to as the heart of advertising and should draft with utmost care; otherwise, all the money invested in carrying out the advertisement campaign will go to waste.

    Explanation and Learn, A Good Advertisement Copy: Features, Types, and Benefits.

    In the words of William J. Stanton “The copy in an advertisement is defined as the written or spoken material in it, including the headline, coupons and advertiser’s name, and address as well as the main body of the message”. Simply stated advertisement copy means the total structure relating to the message which the advertiser wants to convey by using any medium of advertisement.

    The advertisement copy should prepare in such a manner as to leave ever­lasting impression on the reader. The job of drafting the copy should entrust to an expert. The reader should not only read but understand and believe the contents given in the advertisement copy.

    It should properly work and cover every detail about the product. Various considerations or essentials of a properly drafted advertisement copy are as under.

    The Concept of the study Explains – A Good Advertisement Copy: Features of a Good Advertisement Copy, Types of a Good Advertisement Copy, and Benefits of a Good Advertisement Copy.

    The Features or Characteristics of a Good Advertisement Copy:

    These also know as salient features or characteristics of a good advertisement copy.

    It Should Be Simple:

    The first important ingredient of an advertisement copy is that it should write in simple language. It should be capable of proper understanding. They should not use ornamental and tough words rather short, simple and properly understandable words.

    It Should Be Capable Of Holding The Reader’s Attention:

    An advertisement copy should be capable of holding the attention of the reader. It should present in such a manner which attracts the consumer immediately.

    The following methods may undertake to hold the attention of the reader:

    • Headlines should properly word and attractive. It should be short and easy for the reader to remember.
    • Use of pictures and sketches should be in direct relation to the product to advertise. A good sketch and drawing will be greatly helpful in explaining the product.
    • An attractive border may insert around the advertisement copy to distinguish it from other advertisements. Underlining the keywords and leaving blank space at the bottom of the copy is also helpful in drawing the reader’s attention.
    • Quoting the price of the product in the advertisement copy is also helpful in holding the attention of a reader. This would be more helpful if the price of the commodity is low.
    • The insertion of reply coupons in the advertisement copy is also helpful in attracting the people.
    It Must Be Suggestive:

    The advertisement copy should be capable of suggesting the reader about the utility and use of the product. Effective slogans can use to give suggestions to people. For example, in case of camp Cola, it is written in the advertisement copy that “life is full of camp cola times”, similarly in case of State Bank of India, it is advertised, “protect your future with State Bank of India”. All these slogans have suggestive value. Suggestions may also give with the help of certain pictures in the advertisement copy.

    It Should Have Conviction Value:

    The advertisement copy shall be able to have an everlasting impression on the reader if the suggestions are backed by convincing arguments. The reader should not have any doubt on the quality of the product. He should fully convince and satisfied. Exaggeration in explaining the qualities’ of a product must check. An appeal about the outstanding features of the product must make. It should state in simple language so that the reader could understand easily.

    In the case of Chelpark fountain pen ink, it is written that it cleans your pen while writing, contains clean x for better pen protection. Similarly in case of Forhan’s toothpaste, “it is ideal for the gums” and “protects your teeth” some organizations assure “money-back guarantee” to convince the people about the quality of the products.

    It Should Educate The People:

    The advertisement copy should tell the people about the use and operation of a product. It should also impart new uses of a product with which the people are not familiar. An advertisement copy containing information about the use, sources from where the product can obtain, price and services available along with the product is greatly helpful in enhancing the demand and enlarging the sales.

    For example, in the case of Hawkin’s pressure cooker, a booklet is also given to the buyer containing methods of preparing various vegetables, soups, and puddings, etc. with the help of the cooker. Similarly, in case of a refrigerator, a booklet containing various directions about proper use and preservation of the refrigerator are giving.

    It Should Have Memorising Value:

    The advertisement copy should prepare in such a manner that a reader gets the everlasting impression about the product. It can successfully create by repeating the advertisement time and again. Repetition projects the permanent image of the product on the reader’s mind. Trademarks and brand names can use successfully for achieving this end. Dalda, Thums-up, Bournvita, and Surf have successfully achieved memorizing value. The names of these products are very common among people.

    It Should Be True:

    An advertisement copy should be truthful. It should not misrepresent and conceal the facts about the product. Rather it should lay down the limitations in the product. For example, a cloth merchant should specify the fading of color and shrinkage of yarn, if it is so. If these limitations are not brought to light, the buyer eventually comes to know about them after using the product. This will shatter the confidence of the buyer in the product and the very aim of the advertisement defeat.

    Types of a Good Advertisement Copy:

    As told earlier, the method or style of presentation is to do with how the message presents. It speaks of the different types of advertising copies to arrest, inform, impress and impel the reader; certain elements are to be present in a copy such as attention, suggestion, meaning, conviction, sentiment, education, and instinct.

    Good Advertisement Copy is classifying in several ways in their types. However, the most practical one is to classify into six types as:

    • Institutional.
    • Reason why?
    • Human interest.
    • Educational.
    • Suggestive and.
    • Expository.

    Now, explain each one;

    Institutional Copy:

    Institutional Copy neither sells nor the products neither the service but the name of the business house. The aim is to build the sound edifice of a reputation for the selling house. It seeks to build goodwill through its philosophy, objectives, and policies towards public so that the prospects remember it.

    Reason Why Copy:

    Reason Why Copy offers reasons as to why the customer expects to buy a product or service of the advertiser. It appeals straight to the intellect or the judgment of an individual than emotion or impulses. It attempts to prove the product superiority using evidence in the forms of performance test, records, testimonials, guarantees and the like.

    Human Interest Copy:

    Human Interest Copy appeals to the emotional and the senses than intellect and the judgment, sympathy, affection, love, fear, humor, curiosity and other emotional appeals are used to the sense of sight, touch, taste, smell, and hearing.

    It tells about the product about the people instead of conforming to the facts about the products. It takes several forms of which four are very significant namely, “fear”, “humorous”, “story” and “predicament” copy.

    Suggestive Copy:

    Suggestive Copy tries to suggest or pinpoint or convey the message of the advertiser directly or indirectly to the readers. Much is left to the reader to infer the ad message. Like a poem, suggestive language is freely used where the hidden meaning is to pick by the readers. Such a copy can be “direct” or “indirect” suggestive copy. The first tells directly about the products or services of the company while the latter does indirectly.

    Expository Copy:

    Expository Copy is the open copy that exposes, unlike suggestive copy. It is so open that the facts are given in a very simple and clear way so that there is no need for interpretation. The information given is so clear and concise that hardly it takes the reader’s brain. It makes possible effortless grasp and acts.

    Advertisement Copy is the soul of an advertisement. An advertisement copy is all the written or spoken matter in an advertisement expressed in words or sentences and figures designed to convey the desired message to the target consumers.

    In print media, an advertisement copy is made-up of head-line, sub-headlines, the body of the copy, illustration logo-type, slogan, and the brand name. Strictly speaking, the written content of an ad copy is the product of the collective efforts of copy-writers, artists and the layout-men.

    As well as, Copywriter and artist must collaborate to provide an advertisement though copywriting precedes or succeeds the artwork and the layout.

    The Benefits of A Good Advertisement Copy:

    Whether a copy is effective or ineffective is a matter of personal judgment. It is very difficult to judge as its evaluation is purely subjective and perceptive. However, a good or effective copy is one that succeeds in reaching the target consumers to create favorable benefits towards the product and the producers, impelling an action on the part of the consumer to buy.

    A good advertisement copy has the following Benefits:

    It is brief:

    Brevity is the soul of wit. Most readers are interested in shorter advertisements. Being brief is not dropping words or chopping sentences. It is the meticulous work of eliminating and substituting the words without jeopardizing the meaning. This cuts to the core, it is to the point to cover all.

    It is clear:

    A clear copy is one which is easily and quickly read and grasped by the readers. It is unambiguous and self- explaining. It is one that clicks fast. Clarity gives clue to interpretation. How a copy is interpreted is dependent on factors like local traditions habits, customs, and nationality. Clarity adjusts to these points.

    It is apt:

    A copy is apt that matches the needs and counts of the prospects. Writing an apt copy is the art of putting in the words that create a strong desire to possess the product where the product features or the qualities satisfy the consumers’ desire to possess. The Copywriter is to place himself in the position of a customer to make it apt. He is to use the most suitable USP.

    It is personal:

    A personal copy is specific where generality dismisses to do away with ambiguity. A personalized copy centers on the prospect. It presents something of interest to the prospect. It’s an individualized appeal copy. It is written from “prospect” to “product” rather than “product” to “prospect”. The copy has “your attitude”.

    It is honest:

    Credibility or believability of an advertisement message is decided by the extent of honesty. An ad to be good must be truthful. Misleading and miss-presented facts made in the copy only damage the reputation of selling the house. One of the surest ways of winning the hearts of the consumers is, to be honest. “Honesty”, here, implies “commercial honesty” and not the “judicial”.

    It is conforming:

    Every ad copy is to conform to standards, rules, and regulations acceptable to the advertising media and the laws of the land. Anywhere in the world, no copy is acceptable to any media that offends the morality, declines decency and ravages religious susceptibilities of people.

    That is why; we have not come across ads on cigarettes and alcohols on radio and television. No advertiser can violate the provisions of the Act of Names and Emblems, Drugs Acts of 1940, 50, and 54.

    A Good Advertisement Copy Features Types and Benefits - ilearnlot
    A Good Advertisement Copy: Features, Types, and Benefits #Pixabay.

  • Financial Services: Meaning, Features, and Scope

    Financial Services: Meaning, Features, and Scope

    Financial services can be defined as the products and services offered by institutions. The Concept of Financial Services is Explain – their Meaning, Definition, Functions, Characteristics or Features, and Scope. Like banks of various kinds for the facilitation of various financial transactions and other related activities in the world of finance like loans, insurance, credit cards, investment opportunities, and money management as well as providing information on the stock market and other issues like market trends.

    Explain and Learn, Financial Services: Meaning, Characteristics or Features, and Scope.

    Meaning of Financial Services is the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.

    Their companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as London, New York City, and Tokyo.

    Definition of Financial Services:

    Services and products provided to consumers; and businesses by financial institutions such as banks, insurance companies, brokerage firms, consumer finance companies, and investment companies all of which comprise the financial services industry.

    Facilities such as savings accounts, checking accounts, confirming, leasing, and money transfer, provided generally by banks, credit unions, and finance companies. Financial Services may simply define as services offered by financial and banking institutions like the loan, insurance, etc.

    The financial services concerns with the design and delivery of financial instruments and advisory services to individuals and businesses within the area of banking and related institutions, personal financial planning, investment, real assets, and insurance, etc.

    Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds, and some government-sponsored enterprises.

    Functions of Financial Services: 

    The following functions of financial services below are;

    • Facilitating transactions (exchange of goods and services) in the economy.
    • Mobilizing savings (for which the outlets would otherwise be much more limited).
    • Allocating capital funds (notably to finance productive investment).
    • Monitoring managers (so that the funds allocated will spend as envisaged).
    • Transforming risk (reducing it through aggregation and enabling it to carry by those more willing to bear it).

    Characteristics and Features of Financial Services:

    The following Characteristics and Features of Financial Services below are;

    1] Customer-Specific: 

    They are usually customer focused. The firms providing these services, study the needs of their customers in detail before deciding their financial strategy, giving due regard to costs, liquidity and maturity considerations. Financial services firms continuously remain in touch with their customers, so that they can design products that can cater to the specific needs of their customers.

    The providers of financial services constantly carry out market surveys so they can offer new products much ahead of need and impending legislation. Newer technologies are being used to introduce innovative, customer-friendly products and services which indicate that the concentration of the providers of financial services is on generating firm/customer-specific services.

    2] Intangibility: 

    In a highly competitive global environment, brand image is very crucial. Unless the financial institutions providing financial products; and services have a good image, enjoying the confidence of their clients, they may not be successful. Thus institutions have to focus on the quality and innovativeness of their services to build up their credibility.

    3] Concomitant: 

    Production of financial services and the supply of these services have to be concomitant. Both these functions i.e. production of new and innovative services and supplying of these services are to perform simultaneously.

    4] The tendency to Perish: 

    Unlike any other service, they do tend to perish and hence cannot be stored. They have to supply as required by the customers. Hence financial institutions have to ensure proper synchronization of demand and supply.

    5] People-Based Services: 

    Marketing of financial services has to be people-intensive and hence it’s subjected to the variability of performance or quality of service. The personnel in their organizations need to select based on their suitability and trained properly so that they can perform their activities efficiently and effectively.

    6] Market Dynamics: 

    The market dynamics depends to a great extent, on socioeconomic changes such as disposable income, the standard of living and educational changes related to the various classes of customers.

    Therefore, they have to constantly redefine and refine taking into consideration the market dynamics.

    The institutions providing their services, while evolving new services could be proactive in visualizing in advance what the market wants, or being reactive to the needs and wants of their customers.

    The Scope of Financial Services: 

    The following scope of Financial services, and cover a wide range of activities. They can broadly classify into two, namely:

    1] Traditional Activities: 

    Traditionally, the financial intermediaries have been rendering a wide range of services encompassing both capital and money market activities. They can group under two heads, viz.

    • Fund based activities and
    • Non-fund based activities.
    A. Fund based activities:

    The traditional services which come under fund based activities are the following:

    • Underwriting or investment in shares, debentures, bonds, etc. of new issues (primary market activities).
    • Dealing with secondary market activities.
    • Participating in money market instruments like commercial papers, certificates of deposits, treasury bills, discounting of bills, etc.
    • Involving in equipment leasing, hire purchase, venture capital, seed capital, etc.
    • Dealing in foreign exchange market activities. Non-fund based activities
    B. Non-fund based activities: 

    Financial intermediaries provide services-based on non-fund activities also. This can calls “fee-based” activity. Today customers, whether individual or corporate, not satisfy mere provisions of finance. They expect more from their companies. Hence a wide variety of services, are being provided under this head.

    They include:
    • Managing the capital issue i.e. management of pre-issue and post-issue activities relating to the capital issued by the SEBI guidelines and thus enabling the promoters to market their issue.
    • Making arrangements for the placement of capital and debt instruments with investment institutions.
    • The arrangement of funds from financial institutions for the client’s project cost or his working capital requirements.
    • Assisting in the process of getting all Government and other clearances.

    2] Modern Activities: 

    Besides the above traditional services, the financial intermediaries render innumerable services in recent times. Most of them are like the non-fund based activities. Because of the importance, these activities have been in brief under the head “New-financial-products-and-services”. However, some of the modern services provided by them are given in brief hereunder.

    1. Rendering project advisory services right from the preparation of the project report until the raising of funds for starting the project with necessary Government approvals.
    2. Planning for M&A and assisting with their smooth carry out.
    3. Guiding corporate customers in capital restructuring.
    4. Acting as trustees to the debenture holders.
    5. Recommending suitable changes in the management structure and management style to achieve better results.
    6. Structuring the financial collaborations/joint ventures by identifying suitable joint venture partners and preparing joint venture agreements.
    7. Rehabilitating and restructuring sick companies through an appropriate scheme of reconstruction and facilitating the implementation of the scheme.
    More things…
    1. Hedging of risks due to exchange rate risk, interest rate risk, economic risk, and political risk by using swaps and other derivative products.
    2. Managing in-portfolio of large Public Sector Corporations.
    3. Undertaking risk management services like insurance services, buy-back options, etc.
    4. Advising the clients on the questions of selecting the best source of funds taking into consideration the quantum of funds required, their cost, lending period, etc.
    5. Guiding the clients in the minimization of the cost of debt and the determination of the optimum debt-equity mix.
    6. Promoting credit rating agencies for rating companies that want to go public by the issue of the debt instrument.
    7. Undertaking services relating to the capital market, such as 1) Clearing services, 2) Registration and transfers, 3) Safe custody of securities, 4) Collection of income on securities.

    Financial Services Meaning Features and Scope
    Financial Services Meaning Features and Scope, Image credit from ilearnlot.com.

  • Negotiable Instruments: Definition, Characteristics, and Features!

    Negotiable Instruments: Definition, Characteristics, and Features!

    A Negotiable Instrument is a document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually named on the document. The Concept of the study Explains – Negotiable Instruments: Meaning, Definition of Negotiable Instruments, Characteristics of Negotiable Instruments, and Features of Negotiable Instruments. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term can have different meanings, depending on what law is being applied and what country and context it is used in. Also learned, Commercial Bills, Negotiable Instruments: Definition, Characteristics, and Features! Read and share the given article in Hindi.

    Explain and Learn, Negotiable Instruments: Definition, Characteristics, and Features!

    Negotiable Instruments Act: The law relating to “Negotiable Instruments” is contained in the Negotiable Instruments Act, 1881, as amended up-to-date. It deals with three kinds of negotiable instruments, i.e., Promissory Notes, Bills of Exchange and Cherubs. The provisions of the Act also apply to “hands” (an instrument in oriental language), unless there is a local usage to the contrary.

    Other documents like treasury bills, dividend warrants, share warrants, bearer debentures, port trust or improvement trust debentures, railway bonds payable to bearer etc., are also recognized as negotiable instruments either by mercantile custom or under other enactments like the Companies Act, and therefore, Negotiable Instruments Act is applicable to them.

    #Definition of Negotiable Instruments:

    The word “Negotiable” means “Transferable by delivery”, and the word “Instrument” means “A written document by which a right is created in favor of some person”. Thus, the term “Negotiable instrument” literally means “a written document transferable by delivery”.

    According to Section 13 of the Negotiable Instruments Act,

    “A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.”

    The Act, thus, mentions three kinds of negotiable instruments, namely notes, bills and cherubs and declares that to be negotiable they must be made payable in any of the following forms:

    A) Payable to order: 

    A note, bill or cheque is payable to order which is expressed to be “payable to a particular person or his order”.

    But it should not contain any words prohibiting the transfer, e.g., “Pay to A only” or “Pay to A and none else” is not treated as “payable to order” and therefore such a document shall not be treated as the negotiable instrument because its negotiability has been restricted.

    There is, however, an exception in favor of a cherub. A cheque crossed “Account Payee only” can still be negotiated further; of course, the banker is to take extra care in that case.

    B) Payable to bearer: 

    “Payable to bearer” means “payable to any person whom so ever bears it.” A note, bill or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.

    The definition given in Section 13 of the Negotiable Instruments Act does not set out the essential characteristics of a negotiable instrument. Possibly the most expressive and all-encompassing definition of negotiable instrument had been suggested by Thomas who is as follows:

    “A negotiable instrument is one which is, by a legally recognized custom of trade or by law, transferable by delivery or by endorsement and delivery in such circumstances that (a) the holder of it for the time being may sue on it in his own name and (b) the property in it passes, free from equities, to a bonfire transferee for value, notwithstanding any defect in the title of the transferor.”

    #Characteristics of Negotiable Instruments:

    An examination of the above definition reveals the following essential characteristics of negotiable instruments which make them different from an ordinary chattel:

    Easy negotiability: 

    They are transferable from one person to another without any formality. In other words, the property (right of ownership) in these instruments passes by either endorsement or delivery (in case it is payable to order) or by delivery merely (in case it is payable to bearer), and no further evidence of transfer is needed.

    The transferee can sue in his own name without giving notice to the debtor: 

    A bill, note or a cheque represents a debt, i.e., an “actionable claim” and implies the right of the creditor to recover something from his debtor. The creditor can either recover this amount himself or can transfer his right to another person. In case he transfers his right, the transferee of a negotiable instrument is entitled to sue on the instrument in his own name in case of dishonor, without giving notice to the debtor of the fact that he has become the holder.

    The better title to a bonfire transferee for value: 

    A bonfire transferee off a negotiable instrument for value (technically called a holder in due course) gets the instrument “free from all defects.” He is not affected by any defect of title of the transferor or any prior party. Thus, the general rule of the law of transfer applicable in the case of ordinary chattels that “nobody can transfer a better title than that of his own” does not apply to negotiable instruments.

    Examples of Negotiable Instruments: 

    The following instruments have been recognized as negotiable instruments by statute or by usage or custom:

    • Bills of exchange;
    • Promissory notes;
    • Cheques;
    • Government promissory notes;
    • Treasury bills;
    • Dividend warrants;
    • Share warrants;
    • Bearer debentures;
    • Port Trust or Improvement Trust debentures;
    • Hindus, and;
    • Railway bonds payable to bearer, etc.
    Examples of Non-negotiable Instruments: 

    These are:

    • Money orders;
    • Postal orders;
    • Fixed deposit receipts;
    • Share certificates, and;
    • Letters of credit.

    Endorsement: 

    Section 15 defines endorsement as follows: “When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as negotiable instrument, he is said to endorse the same, and is called the endorser.”

    Thus, an endorsement consists of the signature of the holder usually made on the back of the negotiable instrument with the object of transferring the instrument. If no space is left on the back of the instrument for the purpose of endorsement, further endorsements are signed on a slip of paper attached to the instrument. Such a slip is called “along” and becomes part of the instrument. The person making the endorsement is called an “endorser” and the person to whom the instrument is endorsed is called an “endorse.”

    Kinds of Endorsements: 

    Endorsements may be of the following kinds:

    1. Blank or general endorsement: If the endorser signs his name only and does not specify the name of the indorse, the endorsement is said to be in blank. The effect of a blank endorsement is to convert the order instrument into a bearer instrument which may be transferred merely by delivery.
    2. Endorsement in full or special endorsement: If the endorser, in addition to his signature, also adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the endorsement is said to be in full.
    3. Partial endorsement: Section 56 provides that a negotiable instrument cannot be endorsed for a part of the amount appearing to be due on the instrument. In other words, a partial endorsement which transfers the right to receive only a partial payment of the amount due on the instrument is invalid.
    4. Restrictive endorsement: An endorsement which, by express words, prohibits the indorse from further negotiating the instrument or restricts the indorse to deal with the instrument as directed by the endorser is called “restrictive” endorsement. The indorse under a restrictive endorsement gets all the rights of an endorser except the right of further negotiation.
    5. Conditional endorsement: If the endorser of a negotiable instrument, by express words in the endorsement, makes his liability, dependent on the happening of a specified event, although such event may never happen, such endorsement is called a “conditional” endorsement.

    In the case of a conditional endorsement, the liability of the endorser would arise only upon the happening of the event specified. But they endorse can sue other prior parties, e.g., the maker, acceptor etc. if the instrument is not duly met at maturity, even though the specified event did not happen.

    Negotiable Instruments_ Definition Characteristics and Features - ilearnlot
    Negotiable Instruments: Definition, Characteristics, and Features!

    #Features of Negotiable Instruments:

    Negotiable Instrument, in law, a written contract or another instrument whose benefit can be passed on from the original holder to new holders. The original holder (the transferor) must countersign the instrument (as in the case of a cheque) or merely deliver it (as in the case of a bank note) to the new holder; the new holder is then entitled to the benefit of the instrument (in the case of a cheque, to the money from the bank; in the case of the banknote, to the sum promised on the note).

    According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means,

    “Promissory note, bill of exchange, or cheque, payable either to order or to bearer.”

    Major features of negotiable instruments are:

    The following features below are:

    Easy Transferability:

    A negotiable instrument is freely transferable. Usually, when we transfer any property to somebody, we are required to make a transfer deed, get it registered, pay stamp duty, etc. But, such formalities are not required while transferring a negotiable instrument.

    The ownership is changed by mere delivery (when payable to the bearer) or by valid endorsement and delivery (when payable to order). Further, while transferring it is also not required to give notice to the previous holder.

    Title:

    Negotiability confers an absolute and good title on the transferee. It means that a person who receives a negotiable instrument has a clear and indisputable title to the instrument.

    However, the title of the receiver will be absolute, only if he has got the instrument in good faith and for consideration.

    Also, the receiver should have no knowledge of the previous holder having any defect in his title. Such a person is known as the holder in due course.

    Must be in writing:

    A negotiable instrument must be in writing. This includes handwriting, typing, computer print out and engraving, etc.

    Unconditional Order:

    In every negotiable instrument, there must be an unconditional order or promise for payment.

    Payment: 

    The instrument must involve the payment of a certain sum of money only and nothing else.

    For example, one cannot make a promissory note on assets, securities, or goods.

    The time of payment must be certain: 

    It means that the instrument must be payable at a time which is certain to arrive. If the time is mentioned as “when convenient” it is not a negotiable instrument.

    However, if the time of payment is linked to the death of a person, it is nevertheless a negotiable instrument as death is certain, though the time thereof is not.

    The payee must be a certain person: 

    It means that the person in whose favor the instrument is made must be named or described with reasonable certainty.

    The term “person” includes individual, body corporate, trade unions, even secretary, director or chairman of an institution. The payee can also be more than one person.

    Signature: 

    A negotiable instrument must bear the signature of its maker. Without the signature of the drawer or the maker, the instrument shall not be a valid one.

    Delivery:

    Delivery of the instrument is essential. Any negotiable instrument like a cheque or a promissory note is not complete until it is delivered to its payee.

    For example, you may issue a cheque in your brother”s name but it is not a negotiable instrument until it is given to your brother.

    Stamping: 

    Stamping of Bills of Exchange and Promissory Notes is mandatory. This is required as per the Indian Stamp Act, 1899. The value of stamp depends upon the value of the pro-note or bill and the time of their payment.

    Right to file suit: 

    The transferee of a negotiable instrument is entitled to file a suit in his own name for enforcing any right or claim on the basis of the instrument.

    Notice of transfer: 

    It is not necessary to give notice of transfer of a negotiable instrument to the party liable to pay.

    Presumptions: 

    Certain presumptions apply to all negotiable instruments, for example, consideration is presumed to have passed between the transferor and the transferee.

    Procedure for suits: 

    In India, a special procedure is provided for suits on promissory notes and bills of exchange.

    The number of transfer: 

    These instruments can be transferred indefinitely until they are at maturity.

    Rule of evidence: 

    These instruments are in writing and signed by the parties, they are used as evidence of the fact of indebtedness because they have special rules of evidence.

    Exchange: 

    These instruments relate to payment of certain money in legal tender, they are considered as substitutes for money and are accepted in exchange of goods because cash can be obtained at any moment by paying a small commission. Read and share the given article (Negotiable Instruments: Definition, Characteristics, and Features) in Hindi.