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CMA Intermediate · Business Laws and Ethics · Indian Partnership Act, 1932

Rohit retires from the partnership firm Rohit & Co., which is not at will, with the consent of all the other partners. No public notice of his retirement is given. Meera, who knew Rohit as a partner and had dealt with the firm earlier, supplies goods to the firm after his retirement. Under the Indian Partnership Act, 1932, what is Rohit's position?

Rohit stays liable to Meera as a partner until public notice of his retirement is given. Retirement with the other partners' consent does not end liability to third parties who knew him as a partner. Only a person dealing without knowing he was a partner is excluded.

  1. AHe remains liable to Meera as a partner until public notice of retirement is givenCorrect
  2. BHe is not liable because he retired with the consent of all the other partners
  3. CHe is not liable because the firm was not at will
  4. DHe is liable only if Meera sends him a written notice

Explanation

Under section 32(3), a retired partner and the other partners remain liable to third parties for acts that would have been acts of the firm if done before retirement, until public notice is given. The proviso protects only a third party who dealt without knowing he was a partner. Meera knew, so the retirement consent does not help Rohit.

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