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Different kinds of Companies

Company is an association of persons coming together with a common motive of doing business which is legal in nature to earn profits out of the same and share it among themselves as agreed. There are different kinds of companies that can be established to do business and earn profits. Kinds of companies we generally see are as follows;

Public CompanyPrivate CompanyHolding CompanySubsidiary CompanyGovernment CompanyForeign CompanyStatutory Company

Public CompanyThe Company which has a paid-up of Rs 5 lakhs and more is called as a public company. A public company requires a minimum of 7 members to form the company and there is no restriction of maximum number. It must have atleast 3 directors. The directors of the public company must file with the registrar of companies to act as a director to a public company. The public company can issue its shares for subscription to general public. The share and the debentures sold can be easily transferable.
Private companyThe Company which has a paid…

What are the Rights of Unpaid Seller

The seller who has not received price of goods sold or the seller who has got his negotiable instrument dishonored will become Unpaid Seller. Sale of goods act, 1930 Section 45 to 55 read about the rights of Unpaid Seller. Those rights can be classified into two groups. They are as follows.
Rights against Goods Rights against Buyer
What are the Rights of Unpaid Seller against Goods
When goods are in existence and title has not gone to buyer, Unpaid Seller can exercise the rights against goods. These rights are categorized into three types. They are as follows.
Right of lienRight of stoppage in transitRight to Re-Sell
Right of lienRight to retain goods by unpaid seller till amount is recovered is called right of lien. If unpaid seller wants to exercise right of lien, he has to fulfill the following conditions. He must be unpaid sellerThere should be no credit terms in the Contract of Sale.After completion of credit period, right of lien can be exercised.The unpaid seller should have obtained …

Types of Guarantee

The Indian Contracts Act defines Guarantee as a contract in which one promises to discharge the liability of the other upon the default of the latter. Creditor, debtor and the surety are the three parties to the contract of guarantee. This contract is formed by the consent of the all the three parties to the contract. Guarantee contract may be oral or written. The contract of guarantee is of different types depending on the contract’s contents and the nature of the same. Here under are the different types of guarantee contracts.

Unilateral Contract of Commercial CreditThis is a type of contract of guarantee usually seen in trade transactions. It commonly arises between the wholesale trader and a retail trader. Also, it arises between a retail trader and the customer. In this type of guarantee contract, the goods are delivered against no payment but with an agreement. The agreement between parties is either written or oral. The agreement may or may not have any securities against discha…

Company Registration Documents

A company is an entity basically formed by group of individuals. It is a place of work formed by following a set of rules and regulation formulated by the state. After all the formalities are fulfilled by the promoters of the business, the registrar of companies issue the Certificate of Incorporation. Post that, the company is formed and business commences. Here under mentioned are some necessary documents needed for the formation of the company.
Documents needed for the registration of the companyAvailability of names: For a company to be established, it requires a name and the promoters are required to decide a name for the company and must inquire whether the name they wanted to have for their company is available for registration or not. To inquire, the promoters must fill Form-1 A with names upto three and with the sufficient fee it has to be sent to the registrar. Until the name is available, the foregoing process continues.
Documents for registration: Once the name is available, …

What is Insurance Premium

Premium is a payment or a consideration, may be kind, paid to the insurer by the insured for the risk undertaken by the former. Usually, the premium is paid in the form of cash. The Premium is fixed by the insurer. The insurer takes into account the contributions he would receive and the average losses that could possibly occur while coming to an estimation while fixing the premium. The insurer takes into account his profits too into the account apart from contributions and other losses while fixing the premium to be paid by the insured.

Here is the simple example to explain or simplify the process or fixation of the premium by the insurer which would be paid by the insured to enter into contract of insurance. Imagine, 10000 people purchased cars. Of those owners, 8000 people insured their cars. The insurance company has past experience, every year 2 cars damages in accidents. Now let us assume, each car cost Rs. 200000. If in a year 2 cars are damaged, the average loss would be Rs. 40…

Types of Fire Insurance Policies

Fire Insurance contract is an insurance policy where insurer agrees to make good the loss of the insured that occurs out of a fire accident that it was during a period that was specified. The contract of fire insurance contains the maximum sum that can be claimed by the insured. It is important to note that in this contract of insurance, only the loss is paid by the insurer to the insured but not the maximum amount specified in the contract made in between the insurer and the insured. The maximum assured sum is paid only when the loss is more than the specified amount according to the contract. The fire insurance policies are of different types and they were specified here under.
Types of Fire Insurance Policies
Specific Fire Insurance PolicyComprehensive Fire Insurance PolicyValued Fire Insurance PolicyFloating Fire Insurance PolicyReplacement Fire Insurance Policy
Specific Fire Insurance PolicyIn this type of fire insurance policy, the loss is covered up to a specific amount. That spec…

Re-Insurance and Double Insurance

Re-insurance and double insurance contracts are two different concepts and are detailed here under. They both are similar to the contract of insurance, however, they have their own nature and the contract goes on as per the requirement.
Re-Insurance
One person agrees to make good the loss of another person, in simple words this is the concept of insurance. The one who make good the loss is the insurer and the one whose loss is made good is the insured. The insurer who undertakes the risk to make good the loss has a limit. The insurer sometimes goes beyond his capacity and enters into contract of undertaking to make the loss good. In this scenario, the insurer ensures to safeguard oneself and to spread the risk, insures the same either entirely or partially with other insurer. This spreading of the risk by an insurer is what is called the re-insurance.
In every kind of insurance, the re-insurance can be made. Like the insurance, the contract of re-insurance too is a contract of indemnity.…