Difference between preliminary contract and provisional …
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Sia ? 4 years, 6 months ago
Basis
Preliminary Contract
Provisional Contract
1.
Meaning
Preliminary contracts are the contracts, which are made before the formation of the company
The contracts which are entered by a company after incorporation but before it is entitled to commence business are provisional Contracts
2.
Enforcement of contract
Neither the company can sue nor can it be sued to enforce the preliminary contracts.
Can be enforced only on receiving certificate of Commencement of Business.
3
Contracts related to
Preliminary contracts may relate to property which the promoters desire to purchase for the company or they may be made with the persons whose know-how is vital to the success of company.
It is not so with the provisional contracts
4
Applicable for
Both private and public company
Only public company
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