Lernovate Ecommerce WEEK 4 Task (Thursday)

Submitted By - Sanket Dhole Date: 22/07/2021

Learnovate e-commerce

Q1) a) Define holder. Explain the rights of

holder in due course.

The "holder" of a promissory note, bill of exchange or cheque means any person
entitled in his own name to from the parties the possession thereof and to receive or
recover the amount due thereon thereto. Where the note, bill or cheque is lost or
destroyed, its holder is the person so entitled at the time of such loss or
destruction. Holder in due course" means any person who for consideration
became the possessor of a promissory note, bill of exchange or cheque if payable to
bearer, or the payee or endorsee thereof, if payable to order, before the amount
mentioned in it became payable, and without having sufficient cause to
believe that any defect existed in the title of the person from whom he derived his title.

RIGHTS OF HOLDER IN DUE COURSE

Section 36 of NI ACT1881 reads the rights of Holder in due

course.
“Every prior party to a negotiable instrument is liable
thereon to a holder in due course until the instrument is
duly satisfied.” In the above section;
‘Every prior party’ means the maker or drawer, the acceptor,
and intervening endorser/s.
Duly satisfied means if the liability of all the parties is
extinguished and the instrument is discharged.

b) 'A' sells a radio to M, a minor, who pays for it by cheque. 'A'

indorses the cheque to B who takes it in good faith &
for more value. The cheque is dishonored on presentation. Can
B' enforce payment of the cheque against 'A' or M?
Sol: Payment can’t be enforced against M as he is a minor.
But the instrument can be enforced against A.

Q2) a) Define promissory note. Explain the

essential features of promissory note
(Specimen is required)

Definition of Promissory Note:

“A promissory note is defined as an instrument in writing
(Not being a bank note or a currency note), containing an
unconditional undertaking signed by the maker, to pay a
certain sum of money only to or to the order of a certain
person, or to the bearer.”
Features of Promissory Note:
The features of promissory note are:
1. It must be in writing.
2. It must contain an unconditional promise to pay.
3. It should be signed by the maker.
4. The payment should be made to a certain person.
5. The certainty of the amount payable should be there.
6. It should be stamped
b) 'A' is the payee of a bearer instrument 'A' misplaces the instrument in his office. It is
picked by B delivers it to C who takes it in good faith & for valuable
consideration. Is 'C a holder in due course?

Holder in due course means any person who for consideration

became the possessor of a promissory note, bill of exchange
or cheque is payable to bearer, or the payee or endorsee
thereof, if payable to order before the amount mentioned in
it became payable and without having sufficient cause to
believe that any defect existed in the title of the person
from whom he derived his title.
Q3) Define company, Differentiate between a
company & a partnership firm

A company is a legal entity formed by a group of individuals to engage in and operate a

business—commercial or industrial—enterprise. File Copyright Online - File mutual
Divorce in Delhi - Online Legal Advice - Lawyers in India
Difference Between Partnership And Company the members of the partnership firm are
called partners whereas the members of company are called shareholders.
The partnership business is to be governed by the Indian Partnership Act, 1932 whereas
the business of the company is determined by Indian Companies act, 2013
Partnership firm is created by contract between two or more persons whereas company
is created by law i.e. registration. The rules of a partnership are to be registered by the
state government whereas in the case of the company it is to be regulated by the
central government. Registration of a firm is not necessary whereas the
company's registration is mandatory. The mandatory document in case of partnership is
partnership deed whereas in the case of a company the mandatory document is the
memorandum of association and articles of association. A partnership firm is not a
separate legal entity from its partners whereas a company is a separate legal entity.
Partners have unlimited liability whereas shareholders have limited liability.
Seal (Stamp) is not required for partnership whereas in case of company stamp is
required. In case of partnership, management is to be done by active partners whereas
in case of company management is done by the board of directors. Decree against a
firm can be executed against partners whereas decree can't be executed against
shareholders. In the case of a private company, the word is to be used Pvt. Ltd and in
case of a public company, the word is to be used Ltd. only whereas such words are not
required in case of partnership. A partnership firm has to maintain accounts as per the
conditions stated in partnership deed whereas a company should maintain accounts and
auditing of accounts by a certified Chartered Accountant. The name of the partnership
firm can be changed easily by having discussion between the partners and by following
the simple procedure provided in s.60 whereas the name of the company can't be
changed easily and prior approval of the central government is required.

Define company, Differentiate between private company &

public company.

A company is a legal entity formed by a group of individuals to engage in and operate a

business—commercial or industrial—enterprise. The major differences between a Public
and Private company are highlighted as under:
1. Meaning:
The public company refers to a company that is listed on a recognized stock exchange
and its securities are traded publicly. A private company is one that is not listed on a
stock exchange and its securities are held privately by its members.

2. Name:
A public company need not include the word “private” in its name. But for a private
company, it is mandatory to write the words “private limited” at the end of its name.

3. Number of Members:
There must be at least seven members to start a public company. But on the contrary,
the private company can be started with a minimum of two members. There is no
ceiling on the maximum number of members in a public company. Conversely, a private
company can have a maximum of 50 members, including its past and present
employees.

4. Number of Directors:
A public company should have at least three directors, whereas a private company can
have a minimum of 2 directors.

5. Quorum:
It is compulsory to call a statutory general meeting of members, in the case of a public
company. Presence of two members is an adequate quorum for the general meeting in
case of a private company. On the other hand, there must be at least five members,
personally present at the annual general meeting for constituting the requisite quorum
in case of a public company.

6. Capital:
A public company must have a paid-up capital of rupees five lakh. Conversely, a private
company must have a paid-up capital of rupees one lakh.

7. Commencement of Business:
To start a business, the public company needs a certificate of commencement of
business after it is incorporated. On the contrary, a private company can start its
business just after receiving a certificate of incorporation.

8. Articles of Association:
A public company can adopt the model Articles of Association given in the Companies
Act. On the other hand, a private company must prepare and file its own Articles of
Association.
9. Transferability of Shares:
The transferability of shares of a private company is completely restricted. On the
contrary, the shareholders of a public company can freely transfer their shares.

10. Restrictions on the Appointment of Directors:

A director of a public company shall file with the registrar consent to act as such. He/she
shall sign the memorandum and enter into a contact for qualification shares. He/she
cannot vote or take part in the discussion on a contract in which he/she is interested.
Two-thirds of the directors of a public company must retire by rotation. These
restrictions do not apply to a private company.

. Q4) Write short notes

a) Trade mark

A trademark is a distinctive sign that identifies certain goods or services as those

produced or provided by a specific person or enterprise. It may be one or a combination
of words, letters & numerals. They may consist of drawings, symbols, three dimensional
signs such as the shape packaging of goods, audible, signs such as the shape &
packaging of goods audible signs, such as music or vocal sound, fragrances or colors
used as distinguishing features. It provided protection to the owner of the mark by
ensuring the exclusive right to use it to identify goods or services or to authorize
another to use it in return for payment.

b) Digital signature

Digital signatures are used to authenticate the identity of the sender. It is like signing a
message in electronic form. A digital signature is a protocol that produces the same
effect as a real signature. It is a mark that only the sender can make and other people
can easily recognize that it belongs to the sender. A digital signature is also used to
confirm agreement to a message. A digital signature must be unforgeable and authentic.
In a digital signature process, the sender uses a signing algorithm to sign the message.
The message and the signature are sent to the receiver. The receiver receives the
message and the signature and applies the verifying algorithm to the
combination. If the result is true, the message is accepted otherwise it
is rejected. A conventional signature is like a private key belonging to
the signer of the document. The signer uses it to sign documents. The copy of the
signature on a file is like a public key so anyone can use it to verify a document to
compare it to the original signature.

c) Who is consumer & who is not consumer (with examples)

The words “customer” and “consumers” are often interchangeably used and are easily
confused with one another. It is high time that common folk and businesses
alike learn the meaning of “customer” and “consumer”. So, when do we use “customer”
and “consumer”, and for whom?
Definition Of Customer
A customer is the individual/business/organization who buys the offering from the seller
via a financial transaction or monetary exchange. In simple terms – Customer is the
buyer of the offering.
Example: A person buying a gift for someone from a gift shop the person is a customer
of the gift shop. In general, businesses tend to focus on getting more
customers as they help them grow and gain more profits. There are different ways of
classifying customers based on the different segments of businesses. But for the sake of
simplicity, we can classify them into two categories:
End-Customer – They are the people who buy the product offered for their own use, in
turn becoming the consumer of the specified product.
Reseller – They are the intermediary who buys the goods for selling it to others and
hence just acting as a customer and not as a consumer of the purchased product.

d) Patent

A patent is the granting of a property right by a sovereign authority to an inventor. This

grant provides the inventor exclusive rights to the patented process, design, or
invention for a designated period in exchange for a comprehensive disclosure of the
invention. They are a form of incorporeal right.

e) Unfair Trade Practices

Unfair trade practices refer to the use of various deceptive, fraudulent, or unethical
methods to obtain business. Unfair business practices include misrepresentation, false
advertising or representation of a good or service, tied selling, false free prize or gift
offers, deceptive pricing, and noncompliance with manufacturing standards. Such acts
are considered unlawful by statute through the Consumer Protection Law, which opens
up recourse for consumers by way of compensatory or punitive damages. An unfair
trade practice is sometimes referred to as “deceptive trade practices” or “unfair
business practices.”