CONSEQUENCES OF INSOLVENCY OF A PARTNER

CONSEQUENCES OF INSOLVENCY OF A PARTNER
If a partner goes insolvent then the following are the consequences:

1. The partner adjudicated as insolvent ceases to be a partner on the date on which the order of adjudication is made.

2. The firm is dissolved on the date of the order of adjudication unless there is a contract to the contrary.

3. The estate of the insolvent partner is not liable for any act of the firm after the date of the order of adjudication, and

4. The firm cannot be held liable for any acts of the insolvent partner after the date of the order of adjudication.