Incoming and Outgoing Partners

INCOMING AND OUTGOING PARTNERS Incoming partner No person can be admitted as a partner into a firm  without the consent of all the existing partners. L iability iability of a incoming partner.  He cannot be held liable f or the acts of the old firm. Retirement of a partner.  A partner is said to be retired when the surviving partners continue to carry on the business of the firm, and the member retiring ceases to be a partner. Method of retirement. In case of a ´particular partnershipµ a partner may   retire with the c onsent of all the other partners, unless otherwise agreed.

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In case of ´partnership at willµ a partner may retire by giving a notice in writing to all the other partners of his intention to retire, unless otherwise agreed. Right of a retiring partner in certain cases to share subsequent profits. (a) o claim profits in capital ratio. f six per cent per (b) o claim interest at the rate of six annum on the amount of his share in the property of  the firm. Expulsion of a partner.  A partner may be expelled fr om a firm by majority of  the partners only if(a) he power to expel has bee n conferred by c ontract between the partners, and uch a power which is bei ng exercised in good faith (b) f or the benefit of the firm.

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T he he partner who is being expelled must be given reasonable notice and opportunity to explain his position.

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If the expulsion is mala fide the same is v oid but he cannot claim an y damages f or wrong expulsion.

Insolvency of a partner . 

Where a partner in a firm is adjudicated, he ceases to be a partner on the date on which the order of  adjudication is made,

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nlike a retiring partner, an insolvent partner is not req uired do give a public notice of his being adjudicated insolvent in order to absolve himself  from liability f or f uture acts of the firm.

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T he he insolvent partner·s share in the firm·s assets will be used f or firm·s debts first and whatever remains will be utilised f or the insolvent partner·s personal debts. debts.

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On the death a of partner a firm is diss olved, but if  the other partners so agree the firm may not be dissolved.

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Where a firm is not dissolved, the estate of a deceased partner partner is liable only for liabilities undertaken during his life time.

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No public notice of death is req uired to relieve the deceased partner·s estate from f uture liabilities.