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

Neha, Omkar and Pranav carry on business under a partnership deed that has no clause on retirement. Neha wants to retire while the firm is a partnership at will. Which course of action is legally valid for Neha to retire?

Neha may retire by giving written notice of her intention to retire to all the other partners. In a partnership at will, this is sufficient. She needs no court order, no substitute, and no approval from the Registrar of Firms.

  1. AObtain a court order permitting her retirement
  2. BGive notice in writing to all the other partners of her intention to retireCorrect
  3. CWait until the firm completes its accounting year
  4. DFind a substitute partner who is approved by the Registrar of Firms

Explanation

In a partnership at will, a partner may retire by giving notice in writing to all the other partners of her intention to retire. No court order, accounting year end or Registrar approval is required. The retirement takes effect from the date mentioned in the notice or the date it is received.

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