Companies Act does not apply

In the following cases, Sec.11 of the Companies Act does not apply (i) An association consisting of less than the maximum number prescribed (20 for
general business and 10 for banking business). (i i) An association carrying on an activity with an object not for earning profits but for some other purposes


i.e. for promoting art, science, culture, religion etc. (iii) A joint Hindu family even it consists of more than the number prescribed U/S II.In the above cases,
the association is not an illegal association even if the number of its members is above the number prescribed and it is not registered under Companies
Act or not Offiled under any other Indian law.Consequences of an Illegal Association Consequences of an illegal association are as follows- .
1. No Legal Existence. Illegal association has no legal existence. Such an association therefore, (i) cannot enter into a binding contract, (ii) neither the
association nor its Alembert's in their personal capacity cannot see any outsider who has dealt with it, (iii) members also cannot sue inter-se for any
. matter connected with the association, (iv) the association cannot be sued either by a member or an outsider because it cannot enter into a contract or
cannot contract a debt, (v) an association cannot be dissolved through the court, (vi) it cannot be wound up under the Act either at the instance of a
creditor, or a member or the association itself as there is nothing to disclose. The association has no legal existence at all.