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) states the maximum number of partners is 50. While the Partnership Act, 1932, is silent, Rule 10 of the Companies (Miscellaneous) Rules, 2014 (under the Companies Act, 2013) sets the maximum limit at 50. So, Assertion (A) is true.
Step 2: Evaluate Reason (R):
Reason (R) correctly states that the Companies Act, 2013 (specifically Section 464) empowers the Central Government to set the maximum number (up to 100), and that the Government has prescribed this limit as 50 via rules (Rule 10). So, Reason (R) is true.
Step 3: Link Reason (R) to Assertion (A):
Reason (R) explains the legal basis (Companies Act empowerment) and the specific action (Government rule setting the limit at 50) that leads to the fact stated in Assertion (A). Therefore, Reason (R) correctly explains Assertion (A).
Conclusion:
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation for Assertion (A).