Contractor accountants are responsible for smooth functioning of an organization. Activities related to company formation, tax liabilities and formalities, accounting and auditing are carried out by these contractors. They might be hired on basis of assignments or on basis of time engaged. It is the duty of these professionals to allow you to concentrate on more important and productive areas and leave the mundane functions like tax payments, managing flow of funds, and company formation formalities to them.
Forming a company is not any easy task, and involves numerous formalities. Strict guidelines are to be followed for opening a company and these accountants are exerts in these. They are the best people to be entrusted the assignment of opening a company. A company could be formed as a proprietary, a partnership firm, a private limited company or a joint stock company. Each of these categories has its own sets of rules and regulations of establishment which an accountancy professional is aware about. After forming a company, arrangement and managing of funds is a major task of contractor accountants.
For a proprietary company the funds usually come from the owner or proprietor and does not require too much of management. The involvement of accounts professional is also limited while arranging for funds in case of a partnership firm. In case of a private limited company funds for starting a business is shared among a few shareholders and no public offers are made of these. Buying and selling of these shares are restricted within this limited group. The process is much complicated for a joint stock company or public limited company. Here, the ownership of companies lies with shareholders each with limited liability. Public limited companies need to be registered with securities exchange boards and enlisted with stock exchanges. An IPO (initial public offer) is made in the share market for the first time to attract share capital.
Managing this share capital is a stupendous task considering the number of shares issued and the capital thereby collected. When demand exceeds supply these shares are sold at premium (where trading price is higher than mark price). In contrast, when demand for these scripts fall short of supply these shares are sold at a discount (lesser than mark price). At par trading takes place when stocks are sold at marked up rates. When demand for stocks is high there is an over-subscription of applications. These applications are sorted and then allocated to different subscribers. This is a tedious task and requires professional handling.
Tax Payment Liabilities
Tax payment is an important responsibility of a contractor accountant. Excise tax, commercial tax, VAT (value added tax), and customs duties are the usual taxes paid by a company to a government. Tax payment has become more convenient with the introduction of online options. It is now possible to file online tax returns on required dates. Filing of returns, claiming of refunds, and payment of taxes are responsibilities of these contractual account professionals.