. The shares of a public company are freely trained members cad dispose of their shares whenever they like Hat see any permission from the company or the other members. in a pave c company, however, some restriction on the right to transfer is dialing rats a boles as per Section 3(1)(ii) of the Act. Although restriction Infix lit to transfer may also be placed m the case of a: public cornpany:m
Cases. e.g., in case of partly paid shares, but absolute right of the embers to transfer shares cannot be restricted arid any provision in the rialto that effect shah be void.:
however, Denoted here that a company possesses the above .' rnchatactenstics by Virtue of this incorporation or registration under the yes Act Although a partnership the main automat
'S: SECRETARIALPRACTICE
compass as a form of business organization may also be registered under the Indian Partnership Act, 1932, yet it does not possess any of
Illegal Associations. After having discussed the meaning and characteristics, etc. of a company, there arises a question is It dicretionar.or an -association of persons' having any number, formed for the purpose of carrying on a business for guan, either to get itself registered under the Companies Act or to act as a partnership or unregistered company? The answer to this question is provided by Section l i of the Act which provides that no company associate on or partnership consisting 'Orson (10 in the case of ban business) be formed Is carry on tarn- business for gain unless it is registered under the Companies A or arm other Indian Lao it will be noted that an association of persons on Bin nag of more persons than specified by Section 11, need not necessarily be registered under the Companies Act for being a legal body of persons. Such am association of persons will perfectly legal even if it is registered under an other Indian Law. For example, Clifton Mutual Help Societies are to be registered under Madras Culet Fund Act, 1961, and the Baluster Benefit Cubit Fumed Pal Ltd. 124 ASAP Ali Road, New Delhi, which have been registered under Madras Chit Fund Act as extended to Union Teton- of Delhi, is a legal company. A partnership consisting of more than the aforesaid number of persons, unless so registered, will be illegal association having no legal existence although none of the objects for which it may have been donned is illegal within the meaning of Second 23 of the Indian Contract Act, 1872. So far as associations consisting of less than the number prescribed as above are concerned, they have the potato whether to get themselves registered or not. If not registered, they will be regarded as perfectly legal associations but the liability of their members will always be unlimited. This Second does not apply to the case of a single Joint Hindu family business, whatever may be the number of its members (Shalala Ray vs. Alrshusudan Ray).
Object. It is to be emphasized that there must be a business having for its object the acquisition of gain for the application of this Section. Associations, which carry on business but whose object is not the acquisition of 'gain' for its members need not be registered under the Act. Thus, Section 11 does not apply to literary, scientific or charitable associations and as such they are not compulsorily remittable. Again, if there is gain to members of the association Without carrying on a business by virtue of pooling agreements' to eliminate competition then also the association does not fall within the pun low of this Section and need not be compulsorily registered under the Companies Act ( en Mousse Co. Ltd. vs. Ru.ctomji).
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