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

Tanvi, Uday and Vishal are partners in a trading firm in Surat. The deed is silent on admission of new partners. Tanvi and Uday want to admit Vishal's nephew Waseem as a partner, but Vishal objects. What is the legal position?

Waseem cannot be admitted over Vishal's objection. Unless the partnership contract says otherwise, a new partner can be introduced only with the consent of all the existing partners. Majority agreement, a capital deposit or a family relationship with a partner does not override one partner's refusal.

  1. AWaseem can be admitted because a majority of the partners agree
  2. BWaseem can be admitted only if every partner consents, so he cannot be admitted over Vishal's objectionCorrect
  3. CWaseem can be admitted if he deposits capital in the firm
  4. DWaseem can be admitted because he is related to a partner

Explanation

Under the Act, unless the contract provides otherwise, a new person can be introduced as a partner only with the consent of all existing partners. Vishal's objection therefore blocks the admission. Majority approval, capital contribution or kinship does not replace unanimous consent.

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