Master TDS & TCS Provisions with Critical Issues. Register Now!

Company Law on Partnership firm

04 December 2020

If co.law 2013 does not apply on partners form of business so how come section 464(illegal association)
tells the limit of persons in partnership or association?
or does co law 2013 apply on partnership firms?

Reply
Follow
Share

2 Replies

JATINDER KUMAR (Accountant) (3662 Points)
Replied 06 December 2020

Company Law is not applicable on Partnership Firms but maximum partners limit is 50 in partnership firm

2 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Chirag (Professional) (1979 Points)
Replied 07 December 2020

Here, Companies Act is not regulating Partnership form of business, while this section is just elaborating that if the No of Partners exceeds 50 or In any unicorparted AOP and If such AOP/Firm is carrying on or having it's object towards profit oriented activity then it's mandatory to register itself as company under this act, here, your query is also reasonable that how Companies act, can even provide no of partners, while Indian Partnership act, 1932 is not providing it, see only one reason being, Contemporena exposition can't be applied for act dated back in 1932 with no significant changes while Companies act is dynamic and according to modern need of Society, So, simply if there are more than 50 partners (Professional Firms are not in it), Then it's impossible all are actually involved in business, while they had infused capital and are sleeping one, If limit is not at there, Partnership firm which can easily escape itself with Deposit Regulations ,Investors Protection, Governance Requirments, No Reporting or filing any FS (Except IT/GST),can make 1000-2000 or even more person(s) as partner and then dupe crores, and such Regulatory authority RBI/SEBI/MCA can't do anything in it, that's why it seems there is a limit prescribed under companies act... Hope it helps.. thnx