1) According to section 464 any company or association of persons or partnership in which the number of members is more than 50 and if it carries on business for profit if it's not registered under any act then it will be called as an illegal association.
2) Illegal Association does not have any legal existence which means the following things;
a) It cannot sue and be sued in the court of Law.
b)It cannot be wound up because there is nothing to wind up.
c) It cannot be dissolved because there is nothing to dissolve.
3)The liability of all the members of the illegal association is unlimited for all the liabilities of the association.
4) Penalty or Fine - Every person who is a member of an illegal association is liable to pay a fine of Rs.100k.
5) Under section 453 if any association of person works as a private or public company without being registered as a private or public company then there is a fine of not less than Rs.500 per day and may extend to Rs.2000 for the period of default plus unlimited liability of all the persons who work under such association.
6) It is important under section 464 that to call an association illegal, the business must be carried on for profit. If the profit motive is not there then the association can work as a legal association even if the number of members is more than 50. This implies that section doesn't apply to charitable, literally, religious, and scientific association, clubs association.
7) Moreover, section 464 doesn't apply to chit funds, joint Hindu families, and stock exchanges.
8) The profit off illegal association is subject to income tax.
9) An illegal association remains illegal in spite of the subsequent reduction in its membership till it gets registered.
2) Illegal Association does not have any legal existence which means the following things;
a) It cannot sue and be sued in the court of Law.
b)It cannot be wound up because there is nothing to wind up.
c) It cannot be dissolved because there is nothing to dissolve.
3)The liability of all the members of the illegal association is unlimited for all the liabilities of the association.
4) Penalty or Fine - Every person who is a member of an illegal association is liable to pay a fine of Rs.100k.
5) Under section 453 if any association of person works as a private or public company without being registered as a private or public company then there is a fine of not less than Rs.500 per day and may extend to Rs.2000 for the period of default plus unlimited liability of all the persons who work under such association.
6) It is important under section 464 that to call an association illegal, the business must be carried on for profit. If the profit motive is not there then the association can work as a legal association even if the number of members is more than 50. This implies that section doesn't apply to charitable, literally, religious, and scientific association, clubs association.
7) Moreover, section 464 doesn't apply to chit funds, joint Hindu families, and stock exchanges.
8) The profit off illegal association is subject to income tax.
9) An illegal association remains illegal in spite of the subsequent reduction in its membership till it gets registered.
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