Page 45 - DCOM106_COMPANY_LAW

Company Law

Notes 13. A one-mean company is one in which a single person holds virtually all shares of the
company.
14. An association of persons may be incorporated having its objects of promoting commerce,
arts, science, religion or charity.
15. A partnership firm can be a member of s.25 company.

Case Study Customer Contract

“I didn’t receive the products. The supplier said the goods were detained in the Customs
Office because Customs didn’t find the original invoice attached to the goods. The supplier
explained that it’s his company’s policy was to issue original invoices only when quantities
are above 5 units. He told me to pay for another 2 units for another $150 USD, but I have
refused. I paid by Western Union. He registered on your website as a US company, but
actually it is Chinese Company.
All his information is fraudulent. His is a fraudulent company!”

If you think their price is very attractive and want to deal with them, it is very necessary
for you to verify that they are legitimate company and their contact information is correct.
In this case, the fraudster is pretending to be a US company, but all his registered information
is false. This can be judged easily by calling his company telephone number or by searching
the company name on related state government websites.
Western Union is a dangerous payment method, it can be picked up anywhere in the
recipient’s country, with no way of tracing the person who picked it up. The criminal
remains anonymous. So it is a commonly used payment method for con-artists. So try to
avoid adopting this payment method and consider other more secure payment methods
like escrow.
Questions:
1. What would you understand if the seller requests you to send payment to another
country instead of his registered country showed on the website? (Hint: Refer First
Para of case)

2. Analyze the ways in which a person can find out the whether the company is
fraudulent. (Hint: Take full knowledge about the product and company if you use
virtual mode of transaction)

3.9 Summary

No company, association or partnership consisting of more than twenty persons shall be
formed for the purpose of carrying on any other business that has for its object the
acquisition of again by the company, association or partnership, or by the individual
members thereof, unless it is registered as a company under this Act, or is formed in
pursuance of some other Indian law.
This section shall not apply to a joint family as such carrying on a business; and where a
business is carried on by two or more joint families, in computing the number of persons
for the purposes of sub-sections (1) and (2), minor members of such families shall be
excluded.

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