|
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 |
What is the difference between Preliminary Contract and Provisional Contract?
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