There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.
Assertion: In a partnership, there should be a minimum 2 person and maximum 50 person.
Reason: Maximum limit of 50 person is prescribed by the Indian Partnership Act,1932.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Assertion (A) is true, but Reason (R) is False.
Assertion: In a partnership, there should be a minimum 2 person and maximum 50 person. THIS IS TRUE. In order to form partnership, there should be at least two persons coming together for a common goal. In other words, the minimum number of partners in a firm can be two. There is, however, a limit on their maximum number. By virtue of Section 464 of the Companies Act 2013, the Central Government is empowered to prescribe maximum number of partners in a firm, but the number of partners cannot be more than 100. The Central government has prescribed the maximum number of partners in a firm to be 50.
Reason: Maximum limit of 50 person is prescribed by the Indian Partnership Act,1932. THIS IS FALSE. Maximum limit is decided by Companies Act, 2013 not Indian Partnership Act,1932.