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Clarification on section 464 of the Companies Act, 2013 in Paper No. 2, Business Law, Ethics and Communication at Intermediate (IPC) Level
August, 21st 2015
Clarification on section 464 of the Companies Act, 2013 in Paper No. 2, Business Law,
Ethics and Communication at Intermediate (IPC) Level

The students are hereby informed that according to section 464(1) of the Companies Act,
2013, 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.

Further, the Companies (Miscellaneous) Rules, 2014, provides that no association or
partnership shall be formed, consisting of more than 50 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.

Thus, the students may note that for all purposes, the limit of 50 persons shall hold good
and any association or partnership consisting of more than 50 persons 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, shall be deemed to be
an illegal association.





Corrigendum in the Practice Manual of Paper No. 2, Business Law, Ethics and
Communication [Intermediate (IPC) Level] in the printed copy (Edition: December, 2014)

       In chapter 6 ­unit 1, students are advised to delete question no. 56 and its answer given on
       page 6.43.

 
 
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