ADMISSION OF A PARTNER
A person may join as a
new partner in an existing partnership firm. This is called admission of a
partner. The purpose of admission of a new partner may be to raise additional
capital for expansion of business or managerial skill of the new partner or
both. Generally, the new partner has to contribute capital to the firm and
thereby he / she acquires the right to share the future profits and the assets
of the firm.
On admission of a new
partner, the firm is reconstituted with a new agreement and the existing
agreement comes to an end.
According to Section
31(1) of the Indian Partnership Act, 1932, subject to contract between the
partners no person shall be introduced as a partner into a firm without the
consent of all the existing partners.