Q.3 Explain the procedure of admission and withdrawal of a partner?
Ans: ADMISSION OF NEW PARTNER
Following are the important conditions of admission of new partners:
1. CONSENT OF OTHER PARTNERS
In an listing firm a person can be taken as a partner only on the consent of all the partners. Admission or introduction of a new partner in the firm is an important factor. A new person cannot be taken in unless all the partners.
2. NOT LIABLE BEFORE THE ADMISSION
When a person is taken in as partner, he is not liable for any act of the firm before he becomes a partner. His liability extends from the date of his introduction/admission and not from before.
3. NOT BE INSOLVENT
A new person/partner admitted in a firm may not be insolvent.
4. LIABLE FOB ALL ACTS
From the date of introduction/admission new partner will be liable for all acts of the firm.
5. OTHER CONDITIONS
If there are some other conditions, there will be determined in the light of the provisions of partnership agreement.
6. POSITION OF MINOR
A minor person/partner cannot be introduced admitted as partner of the firm. However, with the consent of all other partners of the firm a minor may be admitted in firm for the lime being and he also allowed the benefits of partnership.
RETIREMENT OR WITHDRAWAL OF A PARTNER
According to Section 32 of the Partnership Act a partner may retire:
(i) With the consent of all the other persons.
(ii) In accordance with an express agreement by the partner.
(iii) Where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
We may discuss the retirement/withdrawal of partnership in the following heads
1. WITH THE CONSEHT OF OTHER PARTNERS
A partner may withdraw or retire from the firm with the consent of all other partners.
2. ACCORDING TO AGREEMENT
A partner may retire or withdraw from a firm accordance with an express agreement by the partners.
3. PARTNERSHIP AT WILL
In case of partnership at will a partner may retire by giving 14 days notice to other partners.
4. LIABLE TO THIRD PARTIES
A withdrawing partner will be liable to third parties for all acts of the firm until he gives public notice.
5. HOT LIABLE AFTER RETIREMENT
After the retirement a partner is not liable for any act of the firm.
6. RIGHT OF BENEFITS
Under the provision of agreement a retired person / partner has a right to receive all the benefits from other partners.
Notice: Notice under Section 32(3) for withdrawal is to be given by the retiring partner.