Clarification about Maximum Number of Partners

 

The Banking Tutor

Clarification about Maximum Number of Partners

In Banking literature we come across the following :

1) As per companies act 2013, the number of partners can be 100 (Earlier this number was restricted to 10 for Banking Business and 20 for business other than banking.)

2) The minimum number of partners is two, with a maximum of ten for banking and twenty for other businesses.

If we read the two guidelines, we may get confused.

The confusion arises due to different legal provisions governing partnerships in India.

- Companies Act 2013 (Section 464) allows a partnership firm to have up to 100 partners.

- Indian Partnership Act 1932 does not specify a maximum limit on the number of partners. However, earlier, under Companies Act 1956, the limit was 10 for banking businesses and 20 for other businesses.

- Companies (Miscellaneous) Rules, 2014 further restricts the number of partners to 50.

So, while the Companies Act 2013 sets a theoretical upper limit of 100, the actual enforceable limit under the rules is 50 partners.

02-06-2025                                                                                                              Sekhar Pariti

+91 9440641014