Partnership is a contract between some partners. Dissolution means closure of partnership business. According to Partnership Act, partnership will be dissolved under the following conditions.
(1) Dissolution by Agreement : Partnership is created by the agreement. Similarly existing partners can dissolve by another agreement.
(2) Dissolution of Notice : When the partnership business has no fixed time or it is at will, any partner can dissolve the firm the firm by giving a written notice to all partners. Dissolution will be effective as mentioned in the notice.
(3) Dissolution at Any Time : In spite of partnership deed, partnership can be dissolved at any time under the following conditions:
a. If a partner becomes unable to take up his responsibility as per the partnership deed.
b. If a partner did not pay the amount payable to the firm or transfers his share to another person without the consent of remaining partners.
c. If the right of a partner is taken over by a court for compensation.
d. If any partner committed forgery of negligence.
e. If any partner is sentenced to prison.
(4) Dissolution After the Expiry of Time : As per the partnership deed a partnership will be automatically dissolved immediately after the expiry of the fixed period or on the completion of the specified job.
(5) Immediate Dissolution : The death of insolvency of any partner will immediately dissolve the partnership.
(6) Dissolution by Concerned Department : The concerned department can dissolve the firm under the following conditions:
a. If the firm is not renewed within a prescribed time.
b. It the partners apply in the concerned department for dissolution with reasonable causes.
c. If the firm does not provide accounts and progress report within specified period when demanded.
d. If the firm operates unlawful works or violates the rules and regulation of the Act.
If concerned department dissolves partnership firm except in case (b), the partners of the firm cannot register similar type of partnership for one year.
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3 comments:
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Thanks for sharing. Nice article. In such a partnership deed format the participants are private partners and share the obligations of the company as well as income in a fixed ratio.
Thanks for the information. Reach us to know about Partnership Deed Format
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