Insolvent partner-Section 34
Definition: An insolvent partner is a person who has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due, when he has committed an act of insolvency and has been adjudged insolvent by an insolvency court.
Effect of insolvency:
When a partner is adjudicated insolvent the effects are:
a. he ceases to be a partner on the date on which the order of adjudication is made.
b. the firm shall be dissolved but partnership agreement may provide that firm shall not be dissolved.
c. estate of insolvent partner is not liable for the acts of the firm done after the date of order of adjudication.
d. public notice to the effect that a partner has been adjudicated insolvent is not required,
e. firm is also not liable for any act of the insolvent (partner) after the date at order of adjudication. Section 34(2).