Multiple choice

In case of a firm carrying on the business of banking,

  1. there should be at least seven members and the maximum number of members should not exceed fifty

  2. there should be at least two members and the maximum number of members should not exceed ten

  3. there should be at least ten members and the maximum number of members should not exceed twenty

  4. there should be at least two members and the maximum number of members should not exceed hundred
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Banking firms are subject to special regulations due to the fiduciary nature of their business involving public funds. The legal requirement specifies that a banking firm must have a minimum of 2 partners and cannot exceed 10 partners. This restriction is more stringent than general partnership rules to ensure proper oversight and accountability in handling depositors' money. The lower limit ensures shared responsibility while the upper limit prevents excessive diffusion of control.

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