Corporate law
What should be done in case a partner becomes mentally incompetent?
My elder brother, now seventy years old, is a partner in our joint family venture. He is physically handicapped since birth. Though mentally quite alert, he could get very little formal education. Because of this inability he did not marry and to look after him properly, we three brothers (a fourth one is abroad and rarely visits) remained in a joint family, even after 30 years of the death of our parents, though our children are married and well settled. He has tantrums, but we manage in our day to day life and business, as our employees are considerate and compassionate. For the last couple of years, his tantrums have increased and have become unbearable. Often he becomes violent and in spite of his failing health, attacks the servants. In day to day life we still manage, but when it comes to business, it becomes impossible. As a business partner he has to sign cheques and other documents and appear in offices, whenever required. But now he becomes stubborn and refuses to discharge these duties. This problem is getting worse and worse. What is the legal remedy to this ? How can we remove him from the business, as he has every right in the business and the property ? Health and moral problems apart, I need your legal opinion on this point.
By  Anonymous  |  15 Apr 2016  |  Upvotes: 0  | 

1 Answer(s)

Rashi Gahlaut
Advocate

Any question of taking in or retirement or removal of a partner would be within the purview of the partnership deed entered into between the partners. If there is no partnership deed then provisions of the Indian Partnership Act would govern w.r.t. the removal/dissolution/retirement of a partner. A partner can not be expelled from a firm by any majority of the partners, unless the agreement of partnership provides so; or when there is a case of charge on him having acted against the interest of the partnership. However in either case ,retirement or expulsion, he shall have a right of full and fare final accounting and accordingly to give to or take from the firm. And in either case of fore going event,his rights and liabilities shall be governed for future as provided in subsection (2)to (4)of section 32 of the partnership Act.

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