Section 36 of IPA : Section 36: Rights Of Outgoing Partner To Carry On Competing Business

Explanation using Example

Imagine a scenario where Raj, Meena, and Anil are partners in a firm called 'QuickTech Solutions'. Raj decides to leave the partnership to start his own venture. According to Section 36 of The Indian Partnership Act, 1932:

• Raj can start a competing tech business, but he cannot use the name 'QuickTech Solutions' for his new venture.
• He cannot claim that his new business is associated with 'QuickTech Solutions' or is a continuation of it.
• He is also prohibited from approaching the existing clients of 'QuickTech Solutions' to divert their business to his new company.

However, if Raj had an agreement with Meena and Anil that he would not start a similar business within the same city for 2 years after leaving the firm, this agreement would be valid and enforceable, provided that the terms are reasonable and not excessively restrictive.