Question

a) Define an illegal association. What are the consequences of
forming such an association?​

Answer 1

Answer:

Any company association or partnership carrying on banking business with more than ten members or carrying on any other business with more than twenty members that has for its object the acquisition of gain, without being registered under the Companies act, shall be considered an illegal association.

The consequences of forming such association is that: Every member of such an association is personally liable for all liabilities incurred in the business. The third party can take action against the members. Fine : Every member of such an association will be punishable with a fine which may extend to one lakh.

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Answer 2

Answer:

Any company association or partnership carrying on banking business with more than ten members or carrying on any other business with more than twenty members that has for its object the acquisition of gain, without being registered under the Companies act, shall be considered an illegal association.

The consequences of forming such association is that: Every member of such an association is personally liable for all liabilities incurred in the business. The third party can take action against the members. Fine : Every member of such an association will be punishable with a fine which may extend to one lakh.

Explanation:

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