Question

Assertion (A): The maximum number of partners in a partnership firm is 50.
Reason (R): By virtue of the Companies Act 2013, the Central Government is empowered to prescribe maximum number of partners in a firm. The Central Government has prescribed the maximum number of partners in a firm to be 50.
Choose the correct option from the following:

• A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is true, but Reason (R) is false.
• D. Both Assertion (A) and Reason (R) are false.

Hint:

The maximum number of partners in a firm (currently 50) is governed not by the Partnership Act, 1932, but by the Companies Act, 2013 (Section 464) and the rules made thereunder (Rule 10, Companies (Miscellaneous) Rules, 2014).

Answer 1

The Correct Option is A

Step 1: Evaluate Assertion (A):
Assertion (A) posits that the maximum number of partners is 50. The Partnership Act, 1932, does not specify this limit. However, Rule 10 of the Companies (Miscellaneous) Rules, 2014, promulgated under the Companies Act, 2013, establishes a maximum of 50 partners. Thus, Assertion (A) is accurate.
Step 2: Evaluate Reason (R):
Reason (R) correctly asserts that the Companies Act, 2013 (Section 464) grants the Central Government the authority to stipulate the maximum number of partners, up to 100. The Government has exercised this power, setting the limit at 50 through Rule 10. Therefore, Reason (R) is valid.
Step 3: Link Reason (R) to Assertion (A):
Reason (R) provides the legal foundation (Central Government's empowerment under the Companies Act) and the specific regulatory instrument (Rule 10) that substantiates the limit stated in Assertion (A). Consequently, Reason (R) accurately elucidates Assertion (A).
Conclusion:
Both Assertion (A) and Reason (R) are true, and Reason (R) offers a correct explanation for Assertion (A).