Company ppt

Kinds of CompaniesDistinguish Between Partnership Firm and CompanySale and Agreement To Sell

Prepared By:Prairna Gupta-55Neha Phool-53Priyanka Gupta-54Nirmal KaurShivanshi Sethi-57

Mba(IB)-I

MEANING OF COMPANY

A company is an artificial person created by law. It is a voluntary association of individuals for profits.

DEFINITION AS PER THE ACT

According to Section 3(1)(i) of the Companies Act, a company means, “ A company formed and registered under this Act or an existing company.”

Companies

Incorporated

Chartered Companie

s

Statutory Compani

es

Registered

Companies

Companies limited by shares

Public

Private

Companies Limited

By GuaranteeP

ublic

Private

Unlimited Companies P

ublic

Private

Unincorporated

Incorporated Companies: These are the association of persons who contribute money to a common stock known as capital of the company. They have existence independent of its members.

Unincorporated Companies: These are the mere collection of persons who have agreed to join in partnership to run a business and share the profits.

Chartered Companies: The ‘Crown’ in the exercise of the royal prerogative has power to create a corporation by the grant of a charter to persons assenting to be incorporated. Such companies or corporations are known as chartered companies.

Statutory Companies: A company may be incorporated by means of a special Act of the Parliament or any State Legislature. Such Companies are called statutory companies. Such companies are generally formed to carry out some special public undertakings, e.g., railways, waterways, gas, electric generation etc. They are governed by the Acts creating them.

Registered Companies:Companies registered under the Companies Act,1956, or the earlier Companies Acts are called registered companies. Such companies come into existence when they are registered under the Companies Act and a Certificate of Incorporation is granted to them by the Registrar.

A company registered under the Act may be:

i. Companies limited by shares: In a company limited by shares the liability of the members is limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.

ii. Companies limited by guarantee: It is a registered company public or private, in which the liability of members is limited to such amounts as they may respectively undertake by the memorandum to contribute to the assets of the company in the events of its being wound up.

iii. Unlimited Companies: A company not having any limit on the liability of its members is termed as unlimited company.

Private company: According to Section 3(1)(iii) of the Companies (Amendment)Act,2000, a private company means a company which:

(a) has a minimum paid up capital of one lakh rupees or such higher amount as may be prescribed by the Government;

(b) has a minimum of 2 and maximum of members excluding employees;

(c) restricts the right of members to transfer its shares , if any;

(d) prohibits any invitation to the general public to subscribe for its shares or debentures;

(e) does not invite the public to subscribe to its deposits.

E.g.:- Ambika Industries Pvt. Ltd., Paras Pharmaceutical Pvt. Ltd. etc.

Public Company: According to Section 3(1)(iv) of the Companies (Amendment)Act,2000, a public company means a company which:

(a) is not a private company; and (b) has a minimum paid up capital of five

lakh rupees or such higher amount as may be prescribed by the Government.

E.g.:-Reliance Industries Ltd., Tata Iron & Steel Co. Ltd., D.C.M. Ltd., etc.

Besides all these companies there are few more kinds of Companies:

Government Companies: It is a company of which 51% or more equity share capital is held by the Government. Rest of the shares can be held by private individuals or businessmen.

Foreign Companies: It is incorporated outside India but has a place of business in India. Some of the popular MNCs operating in India are Coca Cola(USA), Pepsi Cola(USA), Sony(Japan),etc.

DISTINCTION BETWEEN PARTNERSHIP AND COMPANY

Regulating Act

PARTNERSHIP FIRM COMPANY

Indian Partnership Act,1932

Companies Act, 1956

Number of Members


Minimum-2 Maximum-20 in

ordinary business and 10 in banking business

Private Company: Minimum-2,

Maximum-50 Public Company: Minimum-7,

Maximum- No. of shares divided by the lot of minimum number of shares

Separate Entity


No separate legal entity from that of its partners.

Separate legal entity from that of its members.

Liability


Unlimited Limited

Management


All partners are entitled to participate.

Only members of the Board of Directors are entitled to manage.

Transfer of Interest


Not possible without the consent of all the partners.

Freely transferable except in case of private company.

Financial Resources


Can raise limited resources.

Can raise large financial resources.

Winding up


Can be dissolved at will without any legal formalities

Cannot be wound up at will. Winding up regulated as per provisions of the Companies Act.

A CONTRACT OF SALE OF GOODS IS A CONTRACT WHEREBY THE SELLER TRANSFERS OR AGREES TO TRANSFER THE PROPERTY IN GOODS TO THE BUYER FOR A PRICE.

THE TERM “ CONTRACT OF SALE “ IS A GENERIC TERM AND INCLUDES BOTH A SALE AND AN AGREEMENT TO SELL.

SALE AND AGREEMENT TO SELL

WHERE UNDER A COTRACT OF SALE, THE PROPERTY IN GOODS IS TRANSFERRED FROM

THE SELLER TO THE BUYER , THE CONTRACT IS CALLED “SALE”.

WHERE THE TRANSFER OF THE PROPERTY IN GOODS IS TO TAKE PLACE AT A FUTURE TIME

OR SUBJECT TO SOME CONDITIONS THEREAFTER TO BE FULFILLED , THE CONTRACT IS CALLED “AN AGREEMENT TO SELL”

CONSEQUENCES OF BREACH IN A SALE ,IF THE BUYER FAILS TO PAY THE

PRICE OF THE GOODS THEN THE SELLER CAN SUE FOR THE PRICE

WHILE IN AN AGREEMENT TO SELL IF THERE IS A BREACH OF CONTRACT BY THE BUYER , THE SELLER CAN ONLY SUE FOR THE DAMAGES.

RIGHT TO RE –SELL IN A SALE , THE SELLER CANNOT RE –SELL

THE GOODS WHILE IN AN AGREEMENT TO SELL , IN CASE OF RE-SALE ,THE BUYER WHO TAKES THE GOODS FOR CONSIDERATION AND WITHOUT NOTICE OF THE PRIOR

AGREEMENT GETS A GOOD TITLE.

GENERAL AND PARTICULAR PROPERTY A SALE IS A CONTRACT PLUS CONVEYANCE AND

GIVES RIGTH TO THE BUYER TO ENJOY THE GOOD WHILE IN AN AGREEMENT TO SELL IS MERELY A CONTRACT , PURE AND SIMPLE

INSOLVENCY OF BUYER IN A SALE IF THE BUYER BECOMES INSOLVENT

BEFORE HE PAYS FOR THE GOODS , THE SELLER MUST RTURN THEM TO THE ASSIGNEE WHILE IN AN AGREEMENT TO SELL IF THE BUYER BECOMES INSOLVENT SELLER IS NOT BOUND TO PART WITH THE GOODS UNTIL HE IS PAID FOR.

INSOLVENCY OF SELLER IN A SALE ,IF THE SELLER BECOMES INSOLVENT , THE

BUYER BEING OWNER OF THE GOOD IS ENTITLED TO RECOVER THE GOODS FROM ASSIGNEE WHILE IN AN AGREEMENT TO SELL, IF THE BUYER WHO HAS PAID THE PRICE , FINDS THAT THE SELLER HAS BECOME INSOLVENT , HE CAN ONLY CLAIM AA RATEABLE DIVIDEND.

Thank You!

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Company ppt