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Two banking f...

Question

Two banking firms, each having ten members, amalgamate their business. Can contracts entered into by the amalgamated firm be enforced by the firm?

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Solution

Solution: Section to which the given problem relates: Section 11 of the Companies Act 1956.
Decision: No.
Reason: The amalgamated firm is an illegal association because such a firm consists of 20 persons which exceeds the statutory limit of 10 persons.

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