Page 231 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Indian Financial System Mahesh Kumar Sarva, Lovely Professional University

Notes Unit 11: Leasing and Factoring

CONTENTS
Objectives
Introduction

11.1 Meaning and Types of Leasing
11.2 Financial Aspect
11.3 Legal Aspect

11.4 Main Provisions Related to Lease.
11.5 Lease Documentation and Agreement
11.6 Tax Aspect
11.7 Factoring
11.8 Meaning

11.9 Mechanics
11.10 Discounting of Bills
11.10.1 Rediscounting of Bills

11.11 Summary
11.12 Keywords
11.13 Review Questions
11.14 Further Readings

Objectives

After studying this unit, you should be able to:
 Understand meaning of leasing;
 Discuss the types and financial aspect of leasing;

 Know legal aspect of leasing;
 Know concept of factoring;
 Define bill discounting and rediscounting.

Introduction

A lease is a contract conferring a right on one person (called a tenant or lessee) to possess
property belonging to another person (called a landlord or lessor) to the exclusion of the owner
landlord. It is a rental agreement between landlord and tenant. The relationship between the
tenant and the landlord is called a tenancy, and the right to possession by the tenant is sometimes
called a leasehold interest. A lease can be for a fixed period of time (called the term of the lease)
but may be terminated sooner. The consideration for the lease is called rent or the rental.

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