Company

Kinds of Companies
Distinguish Between Partnership Firm and Company

Sale and Agreement To Sell
Prepared By:
Prairna Gupta-55
Neha Phool-53
Priyanka Gupta-54
Nirmal Kaur
Shivanshi 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 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  Companies Act, 1956

Act,1932
Number of Members
 Minimum-2  Private Company:

 Maximum-20 in ordinary  Minimum-2, Maximum-50
business and 10 in banking  Public Company:
business
 Minimum-7, Maximum-
No. of shares divided by
the lot of minimum
number of shares
Separate Entity
 No separate legal entity  Separate legal entity from

from that of its partners. that of its members.
Liability
 Unlimited  Limited
Management
 All partners are entitled to  Only members of the

participate. Board of Directors are
entitled to manage.
Transfer of Interest
 Not possible without the  Freely transferable except

consent of all the partners. in case of private company.
Financial Resources
 Can raise limited resources.  Can raise large financial

resources.
Winding up
 Can be dissolved at will  Cannot be wound up at

without any legal will. Winding up regulated
formalities 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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Kinds of Companies

Distinguish Between Partnership Firm and Company

A company is an artificial person

According to Section 3(1)(i) of the Companies

 Unincorporated Companies: These are the mere

 Statutory Companies: A company may be incorporated

 A company registered under the Act may be:

 i. Companies limited by shares: In a company limited by

 E.g.:-Reliance Industries Ltd., Tata Iron & Steel

PARTNERSHIP FIRM COMPANY

 Indian Partnership  Companies Act, 1956

PARTNERSHIP FIRM COMPANY

 Minimum-2  Private Company:

PARTNERSHIP FIRM COMPANY

 No separate legal entity  Separate legal entity from

PARTNERSHIP FIRM COMPANY

PARTNERSHIP FIRM COMPANY

 All partners are entitled to  Only members of the

PARTNERSHIP FIRM COMPANY

 Not possible without the  Freely transferable except

PARTNERSHIP FIRM COMPANY

 Can raise limited resources.  Can raise large financial

PARTNERSHIP FIRM COMPANY

 Can be dissolved at will  Cannot be wound up at

THE TERM “ CONTRACT OF SALE “ IS A

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