Indian Partnership Act, 1932

Right of outgoing partner to carry on competing business

36. (1) An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not-

(a)	-	use the firm name,
(b)	-	represent himself as carrying on the business of the firm, or
(c)	-	solicit the custom of persons who were dealing with the firm before he ceased to be a partner.

(2) Agreements in restraint of trade-A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period or within a specified local limits; and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable.