Table of Contents
Types of Agents
The important types of agents are as under:
- Helpful in sale and purchase
- Helpful in Transportation of goods
- Helpful in sale and purchase of shares
Helpful in Sale and Purchase
- Brokers:
A broker is an agent who represents a buyer or a seller in negotiating a purchase or sale without physically handling the goods involved. He is only concerned with making bargains and contacts between other parties. A broker receives a commission or brokerage for his services. Each broker tends to specialize in a particular line of goods or services.
- Factors:
A factor is an agent who sells goods after taking them in his possession and under his control on the behalf of his principal. He is referred to as a commission salesman. Unlike a broker, a factor possesses the goods and sells in his own name, receives payment and gives valid receipts. He may give credit to a reasonable extent and pledge the goods. The purchaser of goods is not told the name of the real seller. The factor is authorized to conclude the transaction as a special agent of his principal. He can sue the purchaser in his own name and be Sued by him for any breach of contract.
- Commission Agent:
Commission agent is an agent who receives orders from buyers by showing samples Commission agent cannot transact the goods in his own name. Commission agent has to follow the instructions of principal strictly during the sale and purchase of goods. Commission agents get the reward of their services inform of commission. The term “Commission Agent” is used in a very wide sense and includes all the agents who receive remuneration in the form of commission. He can be divided into following two kinds:
(a) Travelling Agents:
Sometimes wholesalers appoint a number of agents who go from place to place, show catalogues, price lists etc. to retailers, book orders and forward them to their principals who execute them. They receive remuneration in the shape of commission on the value of the orders booked by them or in the form of fixed monthly salary or both. Such agents are called Travelling Agents.
(b) Common and Sale Agents:
Sometimes wholesale traders and manufacturers appoint certain shopkeepers in different parts of the country as their selling agents. The principal supplies the goods to his agents according to their requirements. They sell the goods and send a statement of sales known as Account Sales at regular intervals. These agents receive commission on all sales in addition to the expenses, which they have incurred on behalf of the principal. Selling agents may be either ordinary or sole agents. The advantage of Sole Agent is that the principal agrees not to supply the goods to anyone else in that area. This gives certain monopolistic advantages to the sole agent.
- Deleredere Agent:
A delcredere agent is a selling agent, who in consideration of high commission undertakes to indemnify the principal from bad debts, which generally occur due to non-payment of prices of the goods sold to the customers on credit The principal has to give to delcredere agent an extra remuneration called delcredere commission for giving the undertaking that the principal will not have to incur any loss arising from the failure of buyers to pay their dues.
- Auctioneer:
An auctioneer is a person authorized to sell property on commission at a public auction He has legal possession of the goods, which he sells, a lien upon the goods in his possession Tor payment of his charges and the right to use the amount of the goods he sells. He is also, in general, liable to be sued by a buyer to recover the goods sold. Each lot sold through auction is the subject of a separate contract. A sale by auction is complete when the auctioneer announces its completion by a Tall of the hammer. Till then any bidder may retract his bid.
HELPFUL IN TRANSPORTATION
- Exporting Agent:
He is generally appointed by a foreign firm to collect goods, generally materials, from the interior of a country and to export them to his principal. Foreign firms have their agents in Pakistan, particularly in port’ towns, who go from one market and growing centre to another and collect raw materials i.e. cotton, jute, hides and skins which they export to their principals.
- Importing Agents:
An importing agent is appointed to import goods for his principal to sell them (not necessarily in all cases) and to remit the proceeds to him. He is generally appointed when the principal cannot import directly either because he is not known to the foreign manufacturer, exporter or the value and volume of the goods are very small. Such agents are known as Indent Houses.
- Forwarding Agent:
He is appointed when goods are exported to the foreign countries. His principal function is to receive the goods at the docks, to arrange freight, to perform custom formalities, to process bills of lading and to insure the goods.
- Clearing Agent:
A clearing agent is appointed when goods are imported. He performs the custom formalities, takes delivery of the goods from the steamship companies and serves the goods to the importer according to his instructions.
- Warehouse Keeper:
A warehouse keeper is a person who makes arrangements for the storage of goods near seaport. He is expected to exercise reasonable care and diligence to take care of stored goods. He is entitled to receive commission for his services and give delivery of goods only when his charges have been paid. In other words, he has a right to retain the goods until he receives his charges for keeping them in his warehouse.
HELPFUL IN TRANSACTING SHARES
- Underwriters:
They are the agents who help the companies by purchasing their shares. They enter into agreement with the promoters of a newly started company to take up the remaining shares of the new company, which have not been taken up by the public For this guarantee, they are paid commission known as ‘underwriting commission. The underwriters who sell shares to prospective investors thus guarantee new ventures of funds. They render valuable services in the floatation of new Joint Stock Companies.
- Broker:
Broker is an agent who buys and sells the shares of different companies on the behalf of his principal. He receives his remuneration in form of commission.