As per the section 32 of the Indian Partnership Act, “A partner retires when he ceases to be a member of the firm without ending the subsisting relations between the other members of the firm or between the firm and other parties. If a partner withdraws from a firm by dissolving it, then it is a dissolution and not retirement of a partner. The retirement of a partner from a firm does not dissolve it. The retirement of a partner from a firm does not dissolve the firm, but merely severs the partnership between retiring partners and continuing partners, leaving the partnership among continuing partners unaffected. On retirement of the partner, the reconstituted firm continues and the retiring partner is to be paid his dues in terms of Section 37 of the Partnership Act.
Partner who cut his connection with the firm is called a retiring partner or outgoing partner. Retirement of a partner leads to reconstitution of a partnership firm as the original agreement between the partners comes to an end. The business may continue with a new agreement with the remaining partners.A partner may retire with the consent of all the other partners, in accordance with an express agreement by the partners, orwhere the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.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.
The essential features of a partnership are:
1.partnership is the result of an agreement;
2.it is organised to carry on a business;
3.persons concerned agree to share the profits of the business; and
4.Business is to be carried on by all or any one of them acting for all.
Passport photo of all parties.
PAN card of all parties.
Aadhar card of all parties.
Utility bill of Electricity or Telephone.
Valid Address Proof of all the parties.
Valid Driving Licence of all the parties.
Terms and Conditions between the parties.
Other documents will be intimated through e-mail.
On retirement of a partner, the reconstituted firm would continue and the retiring partner would be paid his dues in terms of Section 37 of the Act. In the case of dissolution of a partnership firm, the accounts would have to be settled and distributed as per Section 48 of the Act.
The word ‘retire’ in the Act is confined to cases where a partner withdraws from the firm and the remaining partners continue to carry on the business without dissolution as between them. It does not cover a case where a partner withdraws from the firm by dissolution and not by retirement.
He/ She is refrained from using the name of the partnership firm, Representing himself as a partner of the firm&Soliciting the custom of persons who were dealing with the firm before he ceased to be a partner.
The retiring partner and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement. But the retiring partner is not liable to any third party who deals with the firm without knowing that he was a partner.
According to Section 32(1) of this Act, a partner of a partnership firm may retire: With the consent of all the other partners of that partnership firm, In accordance with an expressed agreement in this regard by the other partners of the partnership firm.
A partner who cut his connection with the firm is called a retiring partner or outgoing partner.
Goodwill of the firm is valued in the manner prescribed by the partnership deed.