1. General Rule Under Indian Law

• The Indian Partnership Act, 1932, does not fix a maximum limit.t
  
• The Companies Act, 2013 prescribes partner limits for regulation.n
  
• Section 464 of the Companies Act governs the maximum partner’s ru.le.
  
• It applies to firms that are not registered as companies.
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• The The Central Government has the power to notify the maximum numbers

2. Limit for General Partnership Firms

• A partnership firm in general business can have up to 20 partners
  
• This applies to all non-banking commercial and professional firms.
  
• Having more than 20 partners makes it an illegal association.n
  
• Such associations must register as companies to operate legally.
  
• The limit ensures proper control and structure within the firm

3. Limit for Banking Business

• A partnership firm in the banking business is limited to 10 partners
  
• This rule applies to firms engaged in traditional banking activities.s
  
• It is aimed at reducing financial risk and increasing accountability ty.
  
• If partners exceed the limit, the firm must register as a company.
  
• The rule ensures greater regulation in financial partnerships

4. Penalty for Exceeding the Limit

• Exceeding the allowed number results in an illegal status
  
• The firm cannot legally enforce its contracts in court.
  
• Individuals may face legal consequences under the law.w
  
• Regulatory action can include penalties or business closure. re
  
• All partners are jointly accountable for non-compliance

5. Exceptions and Special Structures

• Limited Liability Partnerships (LLPs) do not have a maximum partner cap
  
• Professional bodies may allow more than 20 members under special laws
  
• Rules differ if the firm is governed by sector-specific regulations.
  
• Permission from authorities may be required in special cases.
  

A clear distinction must be maintained between partnerships and companies.