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Treating Manager as Partner

ABC Co., a ...

Question

ABC & Co., a firm consists of three partners A, B and C having one-third share each in the firm. According to A and B, the activities of C are not in the interest of the partnership and thus want to expel C from the firm. Advise A and B whether they can do so ___________.

A

Yes

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B

No

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C

A & B have to retire from the firm

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D

Yes, but subject to permission of C

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Solution

The correct option is A Yes
According to the Partnership Act 1932, the partners those are in agreement with the partnership deed can expel any partner with majority if the acts of the partners are not in the good faith of the business. Therefore, A and B can do so under partnership act 1932.

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(a) A wants that interest on capital should be allowed to the partners but B and C do not agree.
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(c) C wants that the loan given by him to the firm should bear interest @ 10% p.a. but A and B do not agree.
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