One company

One –man company:

This is a company in which one man holds practically the whole of the share capital of the company, and in order to meet the statutory requirement of minimum number of members, some dummy members who are mostly his relations or friends it one with limited liability.

Prohibition of large partnership:

Illegal association:

A company, association or partnership consisting of more than 10 persons for the purpose of carriying on banking business and of more than 20 persons for the purpose of carriying on any other business with the company act.

Consequences of illegal association:

The consequences of an illegal association are as followes:

1.personel liability:

Every member of an illegal association is persanolity liable for all liability incurred in the business and his punishable with fine which may extend to rs.10,000.


2.contracts.

An illegal associations cannot enter into any contract nor can it sue any member or outsiders.

3.winding up.

An illegal association cannot be wound up under the companies act either at the instance of a creditor, or a member or the association itself. The tribunal will do nothing in relation to it that will amount recoginisation.