ECONOMICS (CBSE/UGC NET)

ECONOMICS

INCENTIVES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Mak Cik Kiah wanted to invest in a new business venture in genetic engineering. A new company GenG Malaysia Sdn Bhd was incorporated for this business venture. Mak Cik Kiah only provided seed capital and early stage financing for this business venture and was not actively involved in the management of the VC as she is busy with her ‘pisang goreng’ business.As regard to Venture Capital Tax Incentives, Mak Cik Kiah would
A
not qualify to claim any tax incentives because genetic engineering is not a technology-based business activity listed in the guidelines issued by SC
B
not qualify for any tax incentives because she does not provide early-stage financing to GenG Malaysia Sdn Bhd
C
qualify for tax exemption, provided that she obtains certification from the SC confirming that all the qualification conditions have been met
D
qualify for the tax deduction, provided that she obtains certification from the SC confirming that all the qualification conditions have been met
Explanation: 

Detailed explanation-1: -Startup capital is the money raised by an entrepreneur to underwrite the costs of a venture until it begins to turn a profit. Venture capitalists, angel investors, and traditional banks are among the sources of startup capital.

Detailed explanation-2: -Aside from having a technically superior product, Samsan Tech had to prove to potential investors that there was strong demand for its product and that it had a strategy on how to monetize demand. And it only had a few minutes at a time to do this.

Detailed explanation-3: -There are three traditional exit routes for private equity investors – trade sales, secondary buy-outs and initial public offerings (IPOs).

Detailed explanation-4: -Venture Capital Fund is made up of investments from wealthy individuals or companies who give their money to a VC firm to manage their investment portfolios for them and to invest in high-risk start-ups in exchange for equity. The basic idea is to invest in a company’s balance sheet and infrastructure.

There is 1 question to complete.