"The partner who is expelled will cease to be liable to the third party for the act of the firm done after expulsion." Analyse.
CA Foundation · Business Laws · PYQS · September 2024
"The partner who is expelled will cease to be liable to the third party for the act of the firm done after expulsion." Analyse.
Suggested Answer and Working Notes:
“The partner who is expelled will cease to be liable to the third party for the act of the firm done after expulsion” According to Section 32 (3) of the Indian Partnership Act,1932, notwithstanding the expulsion a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the expulsion, until public notice is given of the expulsion. However, an expelled partner is not liable to any third party who deals with the firm without knowing that he was a partner. Hence, the statement given is partially correct.
Topics: The Indian Partnership Act, 1932
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