Incoming Partner is the partner who is joining the partnership firm by contract or is added to the firm.
Outgoing Partner is the partner who is leaving the partnership firm. It can be because of death, expansion, retirement etc.
Incoming Partner: A new partner can be introduced into a firm in the following ways:
1. With the consent of all existing partners.
2. In accordance with a contract between the partners.
3. In accordance with the provisions of section 30. (minors)
(Useful for PT/MAINS)
Section 30: Minors admitted to the benefit of Partnership.
Who can be a partner?
With combined effect of section 2(c) and section 3, reference is made from section 10 of Indian Contract Act.
So any person of sound mind, major and not disqualified by law can be a partner.
After death of a partner can his wife or his legal heir be a partner of that partnership firm?
Section 42(C) of Partnership Act talks about ‘Dissolution of firm on the death of a partner.’
If there is no contract to the contrary then partnership automatically dissolves on the death of a partner.