Section 464 of the Companies Act 2013 empowers the Central Government to prescribe the maximum number of partners in a firm, subject to the ceiling of 100 partners.
This section provides regulatory control over partnership firms by setting an upper limit on the number of partners. The rationale is that if a business requires more than 100 partners, it should be incorporated as a company rather than continuing as a partnership firm, as larger entities need more formal corporate governance structures.
The key provisions under Section 464 are:
- Central Government has the power to prescribe maximum number of partners
- The absolute maximum limit is capped at 100 partners
- Any firm exceeding this limit must convert into a company
This provision ensures that partnerships remain suitable for smaller to medium-sized businesses, while larger enterprises adopt the company form with appropriate regulatory framework and public accountability.