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

Pooja and Qadir are partners. Rohan is admitted as a new partner on 1 January. A creditor claims Rs 80,000 from Rohan for goods supplied to the firm in the previous year, before his admission. What is the correct position?

Rohan is not personally liable for the Rs 80,000. A person admitted as a new partner does not become liable for acts or debts of the firm before his admission. The creditor must look to the firm's assets and the earlier partners instead.

  1. ARohan is personally liable for the debt, as every partner is liable for all firm debts
  2. BRohan is liable for half the amount, because he joined mid-term
  3. CRohan is not personally liable for it, because a new partner is not liable for acts of the firm before his admissionCorrect
  4. DRohan is liable only if the creditor was told of his admission

Explanation

An incoming partner is not liable for any act of the firm done before he became a partner. The supply was made before 1 January, so Rohan has no personal liability for it. The creditor can still claim against the firm and the old partners. Unless Rohan expressly agrees to take it on, option A is wrong.

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