Partnership firm membership
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 October 2012
Dear Sir,
Please Tell Me the Procedure to withdraw Partnership in the Firm?
Please Tell Me the Procedure to withdraw Partnership in the Firm?
17 October 2012
Hi
NTRODUCTION AND RETIREMENT OF A PARTNER
Under the Partnership Act no person can be admitted into Partnership without the consent of the other partner or partners unless there is any contrary to the contract (section 31).
Any partner may, with the consent of all the other partners or in terms of the deed of Partnership where the Partnership is at will, by giving notice in writing to all other partners, to that effect, dissolve the Partnership or retire from Partnership. A retiring partner, however, continues to be liable to third parties even if the liability is taken over by the remaining partners (S 32). Therefore in a deed of retirement it is necessary to provide that in the event of the retiring partner being held liable by a third party, the remaining partners shall indemnify him to that extent, when the liabilities are taken over by the remaining partners. Insolvency of a partner also causes compulsory retirement of an insolvent partner (S. 35). It is, therefore, generally provided in a deed of Partnership when there are more than two partners that the insolvency of any partner will not dissolve the Partnership. If a partner retires, unless there is contract to the contrary, the retiring partner cannot use the firm name, represent himself as carrying on the business of the firm or solicit the customers of the Firm (S. 36). Therefore, in a deed of retirement it is generally not necessary to make explicit that the retiring partner shall not do any of these things. But, if he is to be restrained from carrying on similar business for a specified period or in a specified area, such condition can be provided in the deed of retirement and it is legal (S 36 (2).
NTRODUCTION AND RETIREMENT OF A PARTNER
Under the Partnership Act no person can be admitted into Partnership without the consent of the other partner or partners unless there is any contrary to the contract (section 31).
Any partner may, with the consent of all the other partners or in terms of the deed of Partnership where the Partnership is at will, by giving notice in writing to all other partners, to that effect, dissolve the Partnership or retire from Partnership. A retiring partner, however, continues to be liable to third parties even if the liability is taken over by the remaining partners (S 32). Therefore in a deed of retirement it is necessary to provide that in the event of the retiring partner being held liable by a third party, the remaining partners shall indemnify him to that extent, when the liabilities are taken over by the remaining partners. Insolvency of a partner also causes compulsory retirement of an insolvent partner (S. 35). It is, therefore, generally provided in a deed of Partnership when there are more than two partners that the insolvency of any partner will not dissolve the Partnership. If a partner retires, unless there is contract to the contrary, the retiring partner cannot use the firm name, represent himself as carrying on the business of the firm or solicit the customers of the Firm (S. 36). Therefore, in a deed of retirement it is generally not necessary to make explicit that the retiring partner shall not do any of these things. But, if he is to be restrained from carrying on similar business for a specified period or in a specified area, such condition can be provided in the deed of retirement and it is legal (S 36 (2).
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