SECTION 464. PROHIBITION OF ASSOCIATION OR PARTNERSHIP OF
PERSONS EXCEEDING CERTAIN NUMBER
[Effective from 1st April, 2014]
(1) No association or partnership consisting of more than such number of persons as may be prescribed shall be formed for the purpose of carrying on any business that has for its object the acquisition of gain by the association or partnership or by the individual members thereof, unless it is registered as a company under this Act or is formed under any other law for the time being in force:
Provided that the number of persons which may be prescribed under this sub-section shall not exceed one hundred.
(2) Nothing in sub-section (1) shall apply to—
(a) a Hindu undivided family carrying on any business; or
(b) an association or partnership, if it is formed by professionals who are governed by special Acts.
(3) Every member of an association or partnership carrying on business in contravention of sub-section (1) shall be punishable with fine which may extend to one lakh rupees and shall also be personally liable for all liabilities incurred in such business.
Applicable Rules
Companies (Miscellaneous) Rules, 2014
[Effective from 1st April, 2014]
Rule 10. Association or partnership of persons exceeding certain number. – No association or partnership shall be formed, consisting of more than fifty persons for the purpose of carrying on any business that has for its objects the acquisition of gain by the association or partnership or by individual members thereof, unless it is registered as a company under the Act or is formed under any other law for the time being in force.
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