Insolvency of a partner

Querist : Anonymous (Querist) 09 December 2023 This query is : Resolved
Hi, I would like to understand if a Person "X" has declared insolvency in his Pvt Ltd company "A" and has a legal case in progress with creditors, can "X" continue to be a partner in a Partnership Firm "B" OR can "X" transfer his partnership in "B" to his Son/Daughter/Wife?

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T. Kalaiselvan, Advocate (Expert) 10 December 2023
The partner cannot continue as one in the firm after being insolvent. The partner ceases to be a partner from the date on which the order of adjudication is made. Transfer of partnership can be done as per the articles of association of the company, if there is a provision for that.

kavksatyanarayana (Expert) 10 December 2023
Yes. Usually, in the Partnership deed, one of the terms/conditions will be noted if any partner's insolvency will cease his business in partnership. Verify the partnership deed or show it to a local advocate/CA.

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