RIGHTS OF TRANSFEREE OF PARTNERS’ INTEREST: SECTION 29
Section 29(1) deal with the position during the continuance of the firm, where as the position
on dissolution of the firm of contained in Section 29(2).
– During the continuance of the firm, the transferee of a partner’s interest does not become
entitled to interfere in the conduct of the business of the firm. Nor can such transferee require
accounts. Nor can he inspect the books of the firm.
– He is bound to accept the account of profits agreed to by the partners. His only right is to
receive the share of profits of transferring partner.
– The reason why the transferee is not entitled to interfere in the conduct of business is that
partnership being based on mutual confidence and trust between partners. There should be
no interference by any outsider.
– When the firm is dissolved or the transferring partner ceases to be a partner there is
obviously final settlement of accounts. At that time, the transferee is entitled to share of
assets of transferring partner. For the purpose of ascertaining such share he is also entitled
to account as from date of dissolution.
– What is meant by a share of partner to his proportion of partnership assets after they have
been realised and converted into money and all the partnership liabilities and have been paid
and discharged. [Section 44 (e)]