what is the rule for counting number of persons with respect to section 14?

In computing the number of persons each individual forming the association is to be counted as one (1). Again either natural person or an artificial person will be counted as one (1) person, so a company being an artificial person will be counted as one person. But a partnership, which is not separate legal entity, is not counted as one (1) person. So a partnership between four firms, each consisting of 6 partners, is to be counted as 24 persons.

What are effects of illegal association?

If an association becomes illegal because of contravention of Sec. 14, then its effects will be:

• It will not have any legal existence.  Neither the provisions of the Partnership Act 1932, nor those of  Companies Ordinance 1984 are applicable to such an illegal body because it was not registered as a Companies Ordinance 1984 as company (however the penalties on such illegal existence will continue to apply)
• It cannot sue or be sued as a corporate body.
• It shall lack the contractual capability.
• A member of such association cannot sue for its dissolution.
• A member cannot sue another member in respect of accounts, partition of the existing assets or any other matter connected with the association.
• Every member of such association cannot sue the other member for the contribution.

• Such an association cannot be wound up under Companies Ordinance 1984 at instance of any association, creditor or member.