What is the maximum number of partners in Banking business
Show Hint
- Eight
- Ten
- Twelve
- Sixteen
The Correct Option is B
Solution and Explanation
Step 1: Understanding the Concept:
This question pertains to the maximum number of partners allowed in a partnership firm, a limit historically set by company law to prevent large, unincorporated associations. The limits used to be different for banking and non-banking businesses.
Step 2: Detailed Explanation:
This question is based on the provisions of the erstwhile Indian Companies Act, 1956.
- Section 11 of the 1956 Act stipulated that no company, association, or partnership consisting of more than a certain number of persons shall be formed for the purpose of carrying on any business, unless it is registered as a company under the Act.
- The maximum number prescribed was ten for a banking business and twenty for any other business.
Note: This law has been changed. Under the current Companies Act, 2013, Section 464, read with Rule 10 of the Companies (Miscellaneous) Rules, 2014, the maximum number of partners in any firm is prescribed by the Central Government, which is currently set at fifty. The old distinction between banking and non-banking business has been removed. However, given the options, the question is clearly testing the old law.
Step 3: Final Answer:
Under the old Companies Act, 1956, the maximum number of partners in a banking business was ten.
Top Questions on Company Law
The Companies Act, 2013 does not deal with insolvency and bankruptcy when the companies are unable to pay their debts or the aspects relating to the revival and rehabilitation of the companies and their winding up if revival and rehabilitation is not possible. In principle, it cannot be doubted that the cases of revival or winding up of the company on the ground of insolvency and inability to pay debts are different from cases where companies are wound up under Section 271 of the Companies Act 2013. The two situations are not identical. Under Section 271 of the Companies Act, 2013, even a running and financially sound company can also be wound up for the reasons in clauses (a) to (e). The reasons and grounds for winding up under Section 271 of the Companies Act, 2013 are vastly different from the reasons and grounds for the revival and rehabilitation scheme as envis aged under the IBC. The two enactments deal with two distinct situations and in our opinion, they cannot be equated when we examine whether there is discrimi nation or violation of Article 14 of the Constitution of India. For the revival and rehabilitation of the companies, certain sacrifices are required from all quarters, including the workmen. In case of insolvent companies, for the sake of survival and regeneration, everyone, including the secured creditors and the Central and State Government, are required to make sacrifices. The workmen also have a stake and benefit from the revival of the company, and therefore unless it is found that the sacrifices envisaged for the workmen, which certainly form a separate class, are onerous and burdensome so as to be manifestly unjust and arbitrary, we will not set aside the legislation, solely on the ground that some or marginal sacrifice is to be made by the workers. We would also reject the argument that to find out whether there was a violation of Article 14 of the Constitution of India or whether the right to life under Article 21 Constitution of India was infringed, we must word by word examine the waterfall mechanism envisaged under the Companies Act, 2013, where the company is wound up in terms of grounds (a) to (e) of Section 271 of the Companies Act, 2013; and the rights of the workmen when the insolvent company is sought to be revived, rehabilitated or wound up under the Code. The grounds and situations in the context of the objective and purpose of the two enactments are entirely different.
(Extracted, with edits and revision, from Moser Baer Karamchari Union v. Union of India, 2023 SCC Online SC 547)- CLAT PG - 2026
- Legal Studies
- Company Law
- A company is vested with a distinct legal personality separate from its members. This was held in which of the following case?
- CUET (PG) - 2025
- LLM
- Company Law
- Memorandum of Association is a:
- CUET (PG) - 2025
- LLM
- Company Law
- In which of the following business associations the liability of its members is joint and several?
- CUET (PG) - 2025
- LLM
- Company Law
- A company for charitable purpose may be incorporated as:
- CUET (PG) - 2025
- LLM
- Company Law
Questions Asked in AIBE exam
- In which of the following cases did the Supreme Court of India hold that the rule of nemo judex in causa sua is subject to the doctrine of necessity?
- AIBE - 2025
- Administrative Law
- According to the Motor Vehicles Act, 1988, what is the fixed amount of compensation payable in the event of death caused by a motor vehicle accident under no-fault liability?
- AIBE - 2025
- General Law
- The grounds for decree for dissolution of marriage under Section 2 of the Dissolution of Muslim Marriages Act, 1939 are:
I. whereabouts of the husband have not been known for two years.
II. husband has been sentenced to imprisonment for a period of five years.
III. husband has failed to perform marital obligations for two years without reasonable cause.
IV. husband has neglected or failed to maintain his wife for one year.
Select the correct answer.- AIBE - 2025
- Family Laws
- Statement 1: Under the Indian Penal Code, if a person harbours an offender who has escaped custody for an offence punishable with imprisonment up to 3 years, he shall be punished with imprisonment up to 7 years.
Statement 2: The law provides an exception for harbouring or concealing by the husband or wife of the offender.- AIBE - 2025
- Indian Penal Code (IPC)
- A Statement is followed by two Conclusions, I and II.
Statement: According to the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, the Government credits ₹15,000 to the Rehabilitation Fund for each child or adolescent for whom fine has been recovered from the employer. This amount may be deposited or invested, and the interest is also payable to the child or adolescent.
Conclusions:
I. The child or adolescent is entitled not only to the credited amount but also to the interest accrued on it.
II. The Government is not required to deposit any money other than what is collected as fines from the employer.
Which one is correct?- AIBE - 2025
- Labour & Industrial Law