A partner is a member of the firm according to the partnership deed which is a written document, the partnership deed or the membership of the partner changes according to the need and circumstances such as the death of the partner.
A partner who after sometime accidentally or by nature becomes dead the partnership deed becomes dissolved and new partnership deed is to be formatted by the other existing partners, partnership deed is dissolved if there is an insolvency, partner becomes insane or the death of partner lead the partnership to an end.
Entry of the New Partner:
A company constitutes of many persons, partners are the owner of the company which is also known as the pillar for any organization as they invest their capital and provide their assistance for the growth and maturity of the company.
A firm also requires capital according to need for the extension of business for that the company offers its ownership’s share any person who has the good potential and healthy in capital can be invited to become partner and share and invest its money in the business.
With the entrance of the partner the deed of old partner has no value and now there is a need to form a new deed in which all the terms and conditions, timing, salary packages, duties and other things are needed to be rescheduled.
It should be made clear for the partner in the very beginning of the formation of the deed if anybody wants it salary or not, because for such facility the partner has to offer its more time and work with the organization as an employee for that he is receiving the salary, a partner can be appointed as an auditor, accountant or any other administrative position.
Retirement of the Existing Partner
Anything in this world either it is tangible or intangible has its time or span of life after that it has to be finished even a human has its age with the youth it enjoys heavy potential of work and energy but as the time passes the human seems less energetic, shorter in memory, inactive and tiered that’s why up to a certain age the partner feels that he cannot continue to provide its services to the firm, no he calls for the withdrawal from the partnership, the partnership deed is dissolved here with the retirement of the partner and formation of new partnership deed takes place.
Partnership is also dissolved if the firm is expanding its business and converting their business from the firm to a company with such conversion the partnership is dissolved, the decision regarding the public or the privatization of the firm is decided by the partners.