Partners liability in case of default

Dear Prashantha,

Have you executed a retirement deed???? please confirm.

Kindly call on 9324538481 for further details.

Regards,

Advocate Rohit Dalmia

Mumbai

Yes sir. retired partner has submitted resignation letter to bank as well and has been acknowledged by bank stating that this retired partner is no more a partner of the firm and his liabilty stands as on March 31, 2012. Could you please advice. thanks Sir.

have you executed a deed of retirement signed and accepted by all partners ?

do so, and forward a copy to bank to remove yourself from all bindings and also put a request to release your personal sureity. it the partnership is having adequate sources and value, then the bank will release your property. for further assistance feel free to contact me, if required. good luck.

Dear Prashantha,

also you need to give a public notice in two local news paper this would help you and the retired partner to convey about the retirement to the public atlarge and thus the retired partner cannot do any act on behalf of the firm and the firm can safe guard itself in the future.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

thank you sir for suggestions. retirement deed or reconstitution deed is not executed due to other partners issue and they are not willing to execute one. However partners and bank have accepted letter of resignations and confirmed that resigned person is no more a partner and liability of the said retired partner dates has been defined. Public notice have been issued already in the month end of April 2012 stating the retirement.

Thanks Sir,

Unless the retirement of any partner is depicted in the revised partnership deed clearly showing extinguishment of his liabilities of the partner after retirement and a copy of duly revised and registered partnership deed is provided to the bank, any intimation to the bank by the partner about his resignation would not hold good to make him free from his liabilities towards the bank. The bank can hold him liable any time on default by the firm.

Mere giving notice to the bank is not sufficient. You have to execute a retirement deed and a fresh partnership deed and supply copies thereof to the bank. If the retired partner had not offered any of his personal propoerties as mortgage to the bank, the bank shall hold the retired partner responsible for repayment of bank's dues  till the date of his retirement. However, any credits to the firms account after the date of retirement of the outgoing partner shall reduce his liability by the amounts of such credits.

The bank has to take the decision whether to continue the credit facilities based on a balance sheet prepared by the firm as on the date of reirement of the outgoing partner. I am a banker and you can contact me for any other guidance/clarification at skg_fbd@yahoo.com