colaws

If an AOI/BOI carrying out any business activity for gain and no. of members in such association of person is beyond 100 members but not registered as company than it shall be called as illegal association. Illegal association does not exist in the eyes of law so any legal actions can't be taken. the income of Illegal association is taxable There are exemtion to some entity like HUF, or the firms which are governed by their own laws as CA firms, CS associations etc. If any illegal association created, than entire liability of that illegal association is the members personal liability and have to pay 1 lakh rupees as penality.

1-Jones v. Lipman,(1962) I.W.L.R. 832                       (prevention of fraud)    Lipman agreed to sell a land to Jones in a agreement later on his mind changes and he don't wanna sell so for avoiding the agreement he incorporated a company  and transferred land to it. When the matter went to court than the decision came was here we lift the corperate veiland look the real person behuind the name of comapany and the corperate personality feature will be ignored as the company was not doing any business it was only formed for the purpose of fraud. 2-Dailmer co. ltd v.Continental tyres and rubber co.,(1961) 2 A.C.307                         (determining enemy character of company or trading with enemy) A german company incorporated a company in england whose all the shareholders were german residents trade with another company of england during the war period. some trade debt were left which the england company refused to pay.  When the matter went to co

(Members are different from co.- corperate personality) A company was formed for the purpose of aerial top dressing.              Lee, a qualified pilot held all but one of the shares in the company. he voted himself the Managing Director and got appointed as chief pilot at a salary.   He was killed in air crash while wrkng for company and her widow claim compensation for death of her husband in the course of his employment.              The company opposed on the ground that lee was not a mere worker as the same person could not be the employer and employee at the same time.                 than, the decision of privy council comes that lee is the M.D. at the same time the chef pilot (i.e. the servant of the company)                  lee was the seprate person from the company he formedand his widow was entitled to get the compensation . In effect the magic of incorporate personality enabled him(lee) to be the master and the servant at the same time and enjoy advanta

(based on corporate personality) A person Salamon carried on a business as a leather merchant and a boot manufacturer, for some years and than form a limited co. consisting of himself, his wife , his daughter and his four sons as shareholders, all of whom subscribed to one shareeach so actual cash paid capital was 7 pound. sale of Co. to the Co. formed by salamon. Sold for the sum of 38782 pound whose nominal capital was 40000 pound in 1 pound shares..        10000 pound-secured debenture issued to salamon         20000 pound-fully paid share to salamon          3782 pound-to salamon in cash salamon was the M.D.and his two sons were the other Directors. liquidation of company  Total asset-6050 pound liabilities-10000 pound (secured debenture to salamon)                -8000 pound (unsecured trade creditors) Creditors claimed assets on the ground that salamon was the owner of the company but when the matter went to the court, the decision ca