Dissolution of Partnership firm

Presented by Deepak Kumar Roll-37

Dissolution of firm

Dissolution of firm:- It means complete breakdown of the relationship of partnership between all the partners of a firm.

Dissolution of partnership:- Dissolution of partnership mean change the relation of partner.

Dissolution without the order of court

1. Dissolution by agreement:- (sec. 40)

(a) with the consent of all the partner (b) in accordance with a contract between them.

2. Compulsory Dissolution :-(sec.41) By the happening of any events which

makes it unlawful for the business.

3.Dissolution on the happening of certain contingencies:- (sec. 42)

The expiry of the term for which the firm was constituted.

The death of a partner

4. Dissolution on notice of partnership-at-will (sec.43) :-

Where the partnership at will the firm may be dissolve by any partner giving notice in writing to all the other partner

Dissolution by court

1. Insanity:- Where the partner has become of unsound mind, the court may dissolve the Firm. [sec.44(a)]

2. Permanent incapacity:- When a partner has become in any way permanently incapable of performing his duty as a partner the court may dissolve the firm. [sec.44(b)]

3. Misconduct [sec.44(c)]

When a partner is guilty of misconduct and it affect the business, the court may dissolve the firm.

4.Persistent breach of agreement:-[sec.44(d)] When a partner come in wilful in matter

relating to business of the firm,

5.Transfer of interest:-[sec.44(e) When a partner has in any way transfer the

whole of it interest in the firm to the third party.

6.Business working as a loss:-[sec.44(e)]

When the business is running only as a loss.

7.Any other ground:-[sec.44(f)]

The court may dissolve a firm on any other ground like continuous quarrelling, always say lie with his partner.

CASE 1

X is the resident in India and Y is resident of Pakistan, are partner. The firm is carrying on the importing and exporting commodity 1 and commodity 2

Case1-If the war breaks out between India and Pakistan.Case2-If the law is passed by which import and export of commodity 1 are prohibited.

[sec.41]

Case 2

A and B are the partner of firm and after some time A become unsound mind then B don’t want to partnership with the A then B complain in court for dissolute the firm.

[sec.44(a)]