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Under Section 464 of the Companies Act, 2013 read with Rule 10 of the Companies (Miscellaneous) Rules, 2014, no association or partnership consisting of more than how many persons shall be formed for the purpose of carrying on any business that has for its object the acquisition of gain, unless it is registered as a company or formed under any other law for the time being in force?
Answer & Solution
Correct answer: A.
1. Section 464 of the Companies Act, 2013 read with Rule 10 of the Companies (Miscellaneous) Rules, 2014 caps unincorporated associations at 50 members.
2. The statutory ceiling under Section 464 itself is 100; the rule fixed the operative cap at 50.
3. Two exceptions: (i) a Hindu undivided family carrying on business, and (ii) an association/partnership formed by professionals governed by special Acts (e.g., chartered accountants, advocates).
4. Members of an offending association are punishable with fine up to Rs. 1 lakh and personally liable for liabilities incurred.
_Source: ICSI CS Executive Paper 2 (Company Law) — Lesson 1: Introduction to Company Law, pp. 2-35._
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