Section 16, The Companies Act, 2009

(1) No company, association, or partnership consistingof more than 20 persons shall be formed for the purpose of carrying on any business for profit or gain by the company, association, or partnership or by the individual members thereof, unless it is incorporated as a company under this Act or is formed in pursuance of some other enactment. (2) Nothing in this section shall apply to– (a) any co-operative society registered under the Cooperative Societies Act, 1977; (b) any partnership for the purpose of carrying on practice– (i) as legal practitioners, by persons each of whom is a legal practitioner; or (ii) as accountants by persons each of whom is entitled by law to practise as an accountant. (3) If at any time the number of members of a company, association or partnership exceeds 20 in contravention of this section and it carries on business for more than 14 days while the contravention continues, every person who is a member of the 8 9 Funds of Accounts and audit. Annual Right to form Partnership, etc of more than 20 members to be incorporated. Act No. 6 of 1977. company, association or partnership during the time that it carries on business after those 14 days shall be guilty of an offence and liable on conviction to a fine of Le500,000 for each day during which the default continues.