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CA Foundation · Business Laws · The Indian Partnership Act, 1932

Ganesh, Hema and Imtiaz run a partnership at will. Hema wants to retire. The deed has no clause on retirement. How can Hema retire lawfully?

Hema can retire by giving written notice of her intention to retire to all the other partners. Because the firm is a partnership at will and the deed is silent, no court order, financial year-end or creditor approval is needed for her retirement.

  1. ABy giving written notice of her intention to retire to all the other partnersCorrect
  2. BBy obtaining a court order permitting her to retire
  3. CBy waiting until the firm completes its current financial year
  4. DBy finding a replacement partner acceptable to the firm's creditors

Explanation

A partner in a partnership at will may retire by giving notice in writing to all the other partners of her intention to retire. No court order, year-end or creditor approval is needed. The other options add conditions that the Act does not impose.

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