Prohibition of associations and partnerships exceeding certain number.
No company, association or partnership consisting of more than ten persons shall be formed for the purpose of carrying on the business of banking, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law. 1. Subs. by Act 46 of 1977, s. 2, for the words and figures Chapter XXXV of the Code of Criminal Procedure, 1898 . 2. Subs. by Act 31 of 1988, s. 4 w. e. f. 31- 5- 1991 . 3. Ins. by s. 5, ibid. w. e. f. 31- 5- 1991 .
Ins. by s. 5, ibid. w. e. f. 31- 5- 1991 .
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 gain 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.
Every member of a company, association or partnership carry- ing on business in contravention of this section shall be personally liable for all liabilities incurred in such business.
Every person who is a member of a company, association or partnership formed in contravention of this section shall be punish- able with fine which may extend to one thousand rupees. Memorandum of Association