ILLIGAL ASSOCIATION
An association, partnership or a company,
· Consisting of more than 20 members,
· Formed for the purpose of carrying on a business, &
· For the acquisition of gains
Is required to be registered under companies ordinance 1984, if not so registered it would be considered an illegal association.
Exceptions
· Any society, body or association (other then partnership) formed or incorporated under any other Pakistani law.
· Joint family carrying on joint family business
· Partnership of two or more joint families where total number of members (other than minor members) does not exceed 20 members.
· A partnership formed to carry on practice as lawyer, accountant, other profession where practice as a limited liability company is not permitted under the relevant laws and regulations for such practice.
Consequences of illegal association
· Members cannot claim any relief against each others and against outsiders.
· Company loses its legal existence
· Members of such association
o Shall become personally liable for the liabilities of the company, &
o Shall be fined up to Rs.5000
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