Admission of a New partner in a Partnership
According to the partnership act , no new partner can be taken in a firm without the consent of all the existing partners. the new partner when admitted is called “Incoming Partner” . an incoming partner is not liable for any act of the firm done before he became a partner.
According to section 31 of the partnership act subject to contract between the partners and to the provision of section 30 , no person shall be introduced as a partner into a firm without the consent of all the existing partners.
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Subject to provision of section 30, a person who is introduced as a partner into a firm does not there become liable for any act of the firm done before he became a partner.
- The admission of a new partner results in the legal dissolution of the existing partnership and the beginning of a new one.
- To recognize economic effects , it is necessary only to open a capital account for each new partner.
A new partner may be admitted either by;
- purchasing the interest of an existing partner
- investing assets in a partnership
Withdrawal of partners in partnership business
according to section 32 of a partnership Act a partner may withdraw from a firm.
Retirement of a partner.
1. the following points are as under;
- with the consent of all the other partner
- in accordance with an express agreement by the partners
- where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
2. An outgoing partner continues to be liable for the debts of the firm before his retirement until he gives a public notice of hi retirement.
Insolvency of Partner:
when a partner of the firm is declared bankrupt, he then ceases to be a partner from the date of the order of the Court (Adjudication). the insolvency of a partner does not necessarily result in the dissolution of the firm.
Death of a Partner:
if the firm consist of only tow partners, the death of one partner shall dissolve the partnership , if there are more than 2 partners, the death may not result in the dissolution of the firm. the partners may agree to carry on the partnership business.