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Insolvency of a partner

  • If a partner is declared insolvent, he is no more a partner in the firm from the date he is declared insolvent by the court
  • In ordinary circumstances, the firm is automatically dissolved as one of its members ceases to be a partner due to his insolvency
  • When partners specifically provide in the agreement that the firm shall not be dissolved and the remaining partners continue the firm’s business, the firm is not dissolved
  • The estate of an insolvent person is not liable for the acts of the firm which are done after the order of insolvency
  • The firm is also not liable for any act of the insolvent partner done after the date of the order of insolvency

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