Reasoning Theorems of Success

It’s hard to believe in this day and age where there are as many lenders as burger bars on our high streets, but the Competition Commission has revealed that there are still doorstep loan sharks preying on people that have no other way of getting credit. There are reports that they are charging up to 1,000% interest per year for loans - the average is 177% - still incredibly high. Thankfully, the Competition Commission is finally making moves to stop these practices.

It’s about time, as it is reported that as many as two million Britons are taking out loans with these companies, usually because they have a very low income and the high street lenders won’t give them a second glance. They are forced to get credit at extortionate interest rates because they have no other way of getting it, and in our opinion, there’s no way that rates of 177% can be justified.

The Commission has a few plans up its sleeve to bring the doorstep loan companies to justice. Firstly, they will force them to clearly state to the customer how much the loan will cost them. The idea is that if the borrower realises that the £100 borrowed will swiftly turn into £200 to pay back, they will think twice. Also if these lenders don’t start dropping their rates considerably, the Commission has threatened to set a maximum legal limit, so if they go above it they will be committing a criminal offence.

Hopefully the home credit lenders will sit up and take notice, and stop preying on those who have no other options.

A company called ‘Provident Financial’ leads the way in the home credit industry, with over 50% of the market share. There are another four companies that also operate on a large-scale. Then there are around 500 companies that are on the fringe. They target single parent families and other people with a low income in estate areas, knowing that they have no hope of getting credit with the mainstream lenders. Repayments are collected on the doorstep, usually on a weekly or fortnightly basis.

Of course, the group that these companies target will naturally bring about a higher than usual level of bad debt and missed repayments. However it doesn’t justify the extortionate rates offered by these companies. It’s clear that making the repayments will leave the borrowers in a far worse financial position than they were in before, in which case these practices are immoral.

When asked, Provident Financial defend their practices, for example they offer a credit card with an interest rate of 70%, with the following statement: “Customers are not being overcharged for their home credit loans, nor is the home credit sector making excessive profits”. We disagree!

Once customers are being given clear information about how much the loans will really cost them, it is expected that they will soon start avoiding these loan deals. The Commission also hopes that new companies will enter the market, offering more ethical deals and ending the reign of Provident Financial.

We are looking forward to the provisional proposals which the Commission is expected to reveal in the summer. The chairman of the Commission is Peter Freeman, and we’re hoping that we like what he has to say!

Whether you’ve created a corporation or limited liability company, you must maintain records. Here’s a primer on the basic corporate records you need to maintain.

Corporate Records

When forming a corporation or limited liability company, you are creating an entity independent from yourself. In so doing, this independent entity must take actions for itself, not you. For instance, a corporation will have a corporate bank account through which all revenues and debt payments are handled. As a shareholder, even with a single shareholder entity, you will not pay person expenses out of the corporate bank account. This concept extends to record keeping.

For the purpose of this article, I am considering both corporation and limited liability company documents as “corporate records.” Although the records of each entity have different names, they serve the same purpose. For instance, articles of incorporation for a corporation serve the same purpose as Articles of Organization. The following list applies to corporations, but you can apply the list to the limited liability equivalents.

Although each state has different records requirements, all require you to keep the following records.

1. Articles of Incorporation - The charter establishing the existence of the entity with the relevant Secretary of State.

2. Bylaws - The rules of the corporation. Essentially, the bylaws set out how the corporation will be administered from a procedural perspective, the rights of shareholders, how meetings will be called and so on.

3. Board Resolutions - These are resolutions passed by the Board of Directors from time to time, such as defining classes of corporate stock and approving particular courses of action for the business.

4. Minutes of Shareholder Meetings

5. Annual Meeting - Every state requires a corporation to have at least one meeting of the board of directors each year. Keep these in your corporate book.

6. Shareholder Communications - Copies of all communications to shareholders. Most states require you to hold these for three years, but you should keep these permanently to guard against future shareholder lawsuits.

7. Shareholders - A list of shareholders and the shares they own.

8. Annual Report - Most states require you to file an annual or bi-annual report with the Secretary of State. Keep copies of these in your corporate records. Most states provide a pre-printed form.

9. Balance Sheets - Shareholders have the right to inspect the finances of the corporation, although this right has limitations. You need to keep up to date balance sheets.

10. Tax Returns

So, how long should you keep these corporate records? Some attorneys will tell you three or five years. Personally, I believe you should keep them permanently. If a shareholder dispute occurs, you don’t want to testify you through away a document. If the business is eventually sold, the buyer is going to want to see all corporate records. Either way, you are better off holding on to all records.

Richard A. Chapo is a San Diego business lawyer with www.sandiegobusinesslawfirm.com - a San Diego business law firm in San Diego, California.

Diamond is a mineral and is the hardest known substance to man, but one of the
simplest being composed of carbon and the first recorded history dates back to
some 3000 years ago to India. Throughout history diamonds have been associated
with mystical power, great beauty and more recently great value and wealth. The
word comes from the Greek meaning ‘adamas’ meaning unconquerable and they
have been worn throughout the ages by men going into battle as a sign of strength,
courage and invincibility.

Most diamonds still originate from central and south Africa although there have
been other significant finds in Canada, Brazil, Australia and the biggest diamond
mine is in Siberia. The diamond market is very much dominated by De Beers to
control the supply and price of diamonds across the world by what some would say
are monopolistic practices.

Some of the worlds largest and most valuable diamonds are in the Tower of London
in the British Crown Jewels.

Diamonds are indeed very desirable objects and are worn throughout the world set
in precious metals in many different types of jewellery. One of the most common
pieces of jewellery is still the ladies diamond engagement ring and many women
still choose to have a diamond as a symbol of love to wear on their engagement
finger whether it be the traditional solitaire or three diamonds which some believe
signifies ‘I love you’.
Diamonds have always been associated with romance and legend and it is said that
Cupid’s arrows were tipped with diamonds because they possess a magic that
nothing else has equalled.

Diamonds vary enormously in price according to size and quality so when choosing
diamond rings it is important to consider your budget.

Diamonds are graded according to the 4 c’s which refers to cut, clarity, colour and
carat. The cut of a diamond is very important as it affects the reflective qualities,
which will determine the brilliance of a diamond and how it looks to the naked eye.
Cut should not be confused with shape such as pear, emerald, round etc.

Clarity refer to the number of flaws known as inclusions in the stone and the stones
which have fewer inclusion are more highly prized and valuable because they have
greater brilliance. Remember though that a diamond doesn’t have to be flawless to
look absolutely stunning.

Diamond colour usually refers to whiteness or colourlessness in white diamonds
with those with least colour being more valuable because of their ability to pass
more light giving more sparkle and fire. Coloured diamonds do occur naturally
ranging from blue to green but they are rare and very expensive.

Carat is the unit of weight for measuring the size of diamonds and in this case it
really is a case of size does matter. The value of a diamond rises exponentially in
relation to its size so the cost of a 4 carat stone for instance will not be double the
cost of a 2 carat stone but very much more. So it is all down to your budget and not
a measure of how much someone loves another.

Cost is important when buying a diamond ring but you will find that there is a huge
choice out there that will fit within your budget. Remember that clever design and
settings can make a diamond appear bigger but if you really want a larger stone on
a limited budget you could decide to purchase a stone which is graded slightly lower
in terms of clarity and colour.

Written by John Lewis of Love2Have who specialise in unusual diamond rings for wedding, engagement and everyday wear.