In relation to partnership law write explanatory notes on the following:
(i) Expulsion of a partner
(ii) In capacities of an assignee Partner
(iii) Admission of a new partner
(iv) Circumstances in which a court may order the dissolution of a partnership.
• Under the provisions of the Partnership Act a partner can only be expelled from the firm if the power to do so is expressly vested upon the others.
• In addition a partner can only be expelled in good faith.
• He does not become a partner in the firm
• He cannot interfere with the management of the firms business.
• Cannot demand an account from the partners.
• He has no access to the firms books of accounts.
• If a limited partner assigns his interest the assignee becomes a limited partner.
• A person may be admitted as a partner in a firm if all existing partners agree. However, in a limited partnership a person may be admitted as partner without consent of the limited partner.
Under the provisions of the Partnership Act, a court of law may order the dissolution of partnership if:
• A partner has become a lunatic or is permanently of unsound mind.
• A partner is permanently incapable of discharging his obligations as a partner.
• A partner is continuously guilty of willful breach of the partnership agreement.
• The firms business can only be carried on at a loss.
• A partner has behaved in a manner unfairly prejudicial to the firm and his continued association is likely to bring the firms name into disrepute.
• Circumstances are such that it is just and equitable that the firm should be wound up.