RETIREMENT OF A PARTNER :

According to Section 32(1) of the Indian Partnership Act, a partner may retire:

(a) with the consent of all the partners;

(b) in accordance with an express agreement by the partners;

(c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.

Generally, the business of the partnership firm may not come to an end when one of the partners retires. Other partners continue to run the business of the firm. Just as a number of adjustments have to be made on the admission of a partner, a number of similar adjustments have to be made before a partner retires. These adjustments may be as regard to reserves and undistributed profits, revaluation of assets and liabilities, profits sharing ratio, goodwill etc.