Explain with reference to provisions of the Indian Partnership Act, 1932.
(i) Whether a partner can be introduced without consent of other partners? If yes describe the procedure. If no, in what manner a partner can transfer his share in partnership?
(ii) Describe the rights of transferee: -
(1) During the continuance of partnership.
(2) On the dissolution of the firm.
No. By virtue of provisions of Section 31 of the Indian Partnership Act, 1932, no person can be introduced as a partner in a firm without the consent of all the existing partners.
As per Section 31 of the Indian Partnership Act, 1932, no person can be introduced as a partner in a firm without the consent of all the existing partners unless specified as per the partnership agreement. A partner cannot, by transferring his own interest, make anybody else a partner in his place, unless the other partners agree to accept that person as a partner.
(ii) (1) Rights of a Transferee during the continuance of Partnership [Section 29(1)]:
(2) The rights of such a transferee on the dissolution of the firm are as follows [Section 29(2)]:
(i) Whether a Partner can be introduced without the consent of other Partners?
In what manner a Partner can transfer his share in Partnership?
However, a partner is not debarred from transferring his interest. A partner’s interest in the partnership can be regarded as an existing interest and tangible property which can be assigned.
During the continuance of partnership, such transferee is not entitled:
(a) to interfere with the conduct of the business,
(b) to require accounts, or
(c) to inspect books of the firm.
He is only entitled to receive the share of the profits of the transferring partner and he is bound to accept the profits as agreed to by the partners, i.e., he cannot challenge the accounts.
On the dissolution of the firm, the transferee will be entitled, against the remaining partners:
(a) to receive the share of the assets of the firm to which the transferring partner was entitled, and
(b) for the purpose of ascertaining the share, he is entitled to an account as from the date of the dissolution.
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