All About Individual Credit Score CA Pradeep Kumar Rajput  on 15 October 2019

Whenever an individual approaches a bank/financial institution to avail loans or credit card, the bank will be
concerned about the repayment capacity of the individual. The repayment capacity can be traced from the loan
or credit card repayment history of the individual. Credit information companies (CIC) provide such credit
information about individuals and assigns ranks to them based on their past repayment track record. Banks and
other financial intuitions can use this data while offering their financial services to an individual. For the
regulation of credit information activities, there is the Credit Information Companies (Regulation) Act, 2005
(CICRA) and the different instructions issued by the Reserve Bank of India and which is binding for the Credit
information companies as well as for financial institutions.

At present there are four Credit Information companies: CIBIL: TransUnion CIBIL Ltd EQUIFAX: Equifax
Credit Information Services Pvt Ltd EXPERIAN: Experian Services India Pvt Ltd CRIF High Mark: CRIF High
Mark Credit Information Services Pvt Ltd
Normally the credit report of an individual contains the following details:
Name of the individual and his credit score.
Accounts detail classified into open, closed, Delinquent and Derogatory.
Total balance outstanding in all the loan and credit card accounts
Total monthly obligation. All the addresses provided while availing the different loan facilities. All the contact
details provided while availing the different loan facility.
Comprehensive details of all the loan accounts namely: Date of opening, Lender Name, Account Number,
Account Status, Last reporting date by the lender, Sanction amount,
Current balance and Amount overdue. Individual account details with the following fields namely
Types of Loan, Lender name, Account Number, Opening date, Closing date, Last reported date, Account status,
Highest credit, Current balance, Last payment date, Credit limit amount, EMI amount, Total Write Off amount,
Principle Write Off amount, Settlement Amount; and Payment history highlighted in a different color like green
(regular) and Red (delay/ non-payment) Conclusion/Concerns:
All the banks and financial institutions are under an obligations to provide the periodic details of their
borrowers in a prescribed format to the Credit Information Companies (CIC’s). The purpose of all the above
mechanism is to promote healthy credit flow in the economy. As if the individual commit some payment default
the information gets updated with the Credit Information Companies (CIC’s) and the same start reflecting on
their credit history and then  it became very difficult for the defaulting individual to avail the loan facility from
any other bank financial institution, as the CIC’s downgrade that particular individual credit rating.

The credit flow start deteriorating when there is a dispute between the borrower and the bank regarding the
payment of  EMI’s and other dues due to any reason like excess charging by the bank or any kind of dispute
between the bank and the borrower. The bank normally keep on reporting the unpaid amount with the CIC’s and
the credit score of the individual keep on going down causing undue hardship to that individual. Normally, the
banks are at a position to take advantage of such kind of situation as they impose very high charges in the case
of non-payment and it’s the individual who has to go through a tough time and financials position during this
kind of situation. Trade and Industry

DIFFEERENCE BETWEEN LIMITED LIABILITY COMPANY Vs PARTNERSHIP

Know the Distinction Between Private Ltd Company and LLP for setting up Your Business
07 January 2020
Dear Readers if you are planning to start a business but worried about which form of business structure is better
for you out of LLP (Limited Liability Partnerships) and Private Limited Company then this article is for you
because in this article we will discuss about the difference between the two forms of business organization that
are prevalent in India. You will definitely be able to pick out of LLP or a Pvt Ltd Company as your business
setup and all Confusions if any will be addressed in this article. Lets Begin,  As We Knows that India is a very
ancient nation as far as history is concerned but we got independence from the british rule only in 1947 and thus
we are basically a new economy in terms of industrialization. Prior to Independence and Post independence era
we were mostly reliable on Agriculture and at present also there is no doubt that agriculture plays a very
important role in Indian economy. As India is a fast growing economy and we are heading towards rapid
industrialization but we basically remains a Agrarian nation from our roots. As far as history of Corporate
Culture in India is concerned the British East India Company is a classic example.   For years we are following
the laws Specially the Corporate Laws made by the britisher's. 
The Concept of Corporate Structure is years old but LLP is relatively a new concept. The Present structure of
LLP's and Companies in India are governed by the LLP Act, 2008 and Companies Act, 2013 respectively.
Further the traditional form of Partnerships and Company Structure is not suitable for everyone because they
have their own limitations. The Companies Act, 2013 repealed the erstwhile Companies Act, 1956 to remove
the inefficiencies of the later up to certain extent.  The Table below Shows the Distinction Between the two
forms of Business Structure:  

  S.No Points of Distinction Pvt Ltd Company LLP

1 Regulating Act Companies Act, 2013 Limited Liability Partnership Act, 2008
2 Name Ends with Pvt Ltd/ LLP/Limited Liability Partnership
3 Type of Structure Plain Hybrid (Partnership + Company)
4 Liability Limited Limited
5 Entity Separate Legal Entity Separate Legal Entity
6 Type of Ownership Equity Share Holders Partners
7 Form of Owners Funding Share Capital Partners Contribution
8 Type of Management Directors Collectively referred Partners and Designated Partners manages
As board of directors the LLP and Designated Partners are
additionally responsible for regulatory
compliances.
9 Charter Documents Articles and MOA LLP Agreement
10 Bank Funding More Chances to raise funds
from Banks over LLP. Possible due to Separate Legal Status
11 Minimum  Members 2 2
12 Maximum Members 200 No Limit
13 Minimum Directors 2 Not Applicable
Not Applicable 15 ROC Compliances
More Compliances over LLP Lesser as
Compared to Pvt Company
16 Statutory Audit Mandatory Only if Partners Contribution exceeds INR 25
lacs or Turnover Exceeds INR 40 Lacs in
any Financial Year
17 Tax Compliances More Complex less complex

The  Company form of Structure is traditional but the LLP is a modern form introduced for the first time in
India in the year 2008 to provide flexibility to entrepreneurs to operate as a traditional partnership at the same
time providing the benefits of a Corporate form which is already tried and tested by some advanced countries
like UK, USA, etc.   Grant Thornton IFRS Certification ACCA Diploma in IFRS Learn more Financial
Instrument Consolidation Practical Hands on case study Recorded Videos for 1 year
requirement is concerned forSimple Procedure as Compared to
Company and for tax rates refer

  18 Goodwill   Enjoys more goodwill over LLP because Less as compared to Pvt co,overall good
A Company has more powers. overall good image over traditional
partnership. Rather many MNCs
are operating as LLP.
19 Registration Compliance More registration requirement Simple as compared to Pvt Company
20 Conversion Can be Converted to LLP Can be Converted to Company
21 Liquidation Only though Legal Process the death
of Shareholders doesn’t impact the
existence.  Same and the death of partners doesn’t impact
the existence.
22 Recommended for Comparatively
more Capital Intensive Businesses. Less Capital Intensive preferably for Service
Sector or small entrepreneurs.
From the above distinction we are sure that now you have better understood the distinction between a traditional
Corporate Pvt Company and a Modern LLP form of Business.

CONCLUSION The author can also be reached at paisalawgic@gmail.com

Know how to handle blackmailing by banks Very useful article  
.