Ipa 1932

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Indian Partnership Act 1932

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Ipa 1932

  1. 1. Business lawsBusiness laws Indian Partnership Act, 1932Indian Partnership Act, 1932
  2. 2. Introduction to TopicIntroduction to Topic  One of the forms in which business can be carried on isOne of the forms in which business can be carried on is ‘partnership’, where two or more persons join together to form‘partnership’, where two or more persons join together to form the partnership and run the business. In order to govern andthe partnership and run the business. In order to govern and guide partnership, the Indian Partnership Act, 1932 wasguide partnership, the Indian Partnership Act, 1932 was enacted.enacted.  Since public at large would be dealing with the partnership asSince public at large would be dealing with the partnership as customers, suppliers, creditors, employees or any othercustomers, suppliers, creditors, employees or any other capacity, it is also very important for them to know the legalcapacity, it is also very important for them to know the legal consequences of their transactions and other actions in relationconsequences of their transactions and other actions in relation with the partnership.with the partnership.
  3. 3. Indian partnership Indian partnership act 1932 act 1932
  4. 4.  The law relating to partnership was inThe law relating to partnership was in sections 239 to 266 of the Indian contractsections 239 to 266 of the Indian contract Act 1872. These sections have beenAct 1872. These sections have been replaced to other act name Indianreplaced to other act name Indian Partnership Act.Partnership Act.  It came into the force on 1It came into the force on 1stst October, 1932October, 1932 except section 69, which came into theexcept section 69, which came into the force one year later.force one year later.
  5. 5.  This act is specially meant forThis act is specially meant for governing business of partnership ingoverning business of partnership in India. The act mainly containIndia. The act mainly contain necessary provisions relating to thenecessary provisions relating to the formation of the partnership, theformation of the partnership, the rights, duties and liabilities of partnersrights, duties and liabilities of partners and the procedure of its dissolution.and the procedure of its dissolution.
  6. 6. Features of Partnership Act, 1932Features of Partnership Act, 1932  Indian Partnership Act, 1932 is a Central Act. (madeIndian Partnership Act, 1932 is a Central Act. (made by Parliament)by Parliament)  This Act deals with special type of contract.( contractThis Act deals with special type of contract.( contract of partnership)of partnership)  Provisions regarding contract of partnership wereProvisions regarding contract of partnership were earlier contained in the Indian Contract Act, 1872.earlier contained in the Indian Contract Act, 1872.  This Act extends to the whole of India except theThis Act extends to the whole of India except the state of Jammu and Kashmir.state of Jammu and Kashmir.  This Act came in to force onThis Act came in to force on 1.10.19321.10.1932, except, except section 69 which came into force on thesection 69 which came into force on the 11stst Day ofDay of October, 1933.October, 1933.
  7. 7. Meaning & Definition ofMeaning & Definition of ‘Partnership’‘Partnership’
  8. 8.  Simply speaking, a partnership is anSimply speaking, a partnership is an association of persons who conduct someassociation of persons who conduct some business activity and agree to sharebusiness activity and agree to share profits earned out of it.profits earned out of it.  Acc to Indian Partnership Act:Acc to Indian Partnership Act: Partnership is the relationPartnership is the relation between two or more persons who havebetween two or more persons who have agreed to share the profit of a businessagreed to share the profit of a business carried on by all of them or any of themcarried on by all of them or any of them acting for all.acting for all.
  9. 9. Thus, Partnership is the name of legal relationship between/among persons who have entered in to the contract of partnership.
  10. 10. Meaning of ‘Partner’ ‘Firm’ and ‘Firm Name’Meaning of ‘Partner’ ‘Firm’ and ‘Firm Name’  Section 4 of Indian Partnership Act, 1932Section 4 of Indian Partnership Act, 1932 provides that:provides that: Persons who have agreed into partnership withPersons who have agreed into partnership with one another are called individuallyone another are called individually ‘PARTNERS’‘PARTNERS’ and collectivelyand collectively ‘FIRM’‘FIRM’ and theand the name under which their business is carried on isname under which their business is carried on is called thecalled the ‘FIRM NAME’‘FIRM NAME’ ““Partnership is thus, invisibility which binds thePartnership is thus, invisibility which binds the partners together and firm is the visible form ofpartners together and firm is the visible form of those partners who are thus bound together”.those partners who are thus bound together”.
  11. 11. Maximum Limit on Number of PartnersMaximum Limit on Number of Partners  Section 11 Companies Act provides that theSection 11 Companies Act provides that the maximum no. of persons, a firm can have:maximum no. of persons, a firm can have: In case of partnership firm carrying on a banking businessIn case of partnership firm carrying on a banking business 1010 In case of partnership firm carrying on any other businessIn case of partnership firm carrying on any other business 2020 If the number of partners exceeds the limit, the partnership firm becomes an illegal association. If an association of persons or firm having members or partners exceeding the Above limit will not be an illegal association if that firm’s objective is not to earn profit.
  12. 12. Two or more persons An agreement Sharing of profit Business Mutual agency Essential elements of Partnership For explanation go through the next slides: For forming a partnership the above elements should be present. Though each element is important.
  13. 13. Essentials of PartnershipEssentials of Partnership  At least two personAt least two person  Agreement or ContractAgreement or Contract  Business- A partnership is formed for theBusiness- A partnership is formed for the purpose carrying on business.purpose carrying on business. 1.1. The business must be in existence at theThe business must be in existence at the time of formation.time of formation. 2.2. The business must be a running businessThe business must be a running business 3.3. The business must be lawfulThe business must be lawful 4.4. The purpose of business must be to earnThe purpose of business must be to earn profitprofit
  14. 14. Meaning of Mutual AgencyMeaning of Mutual Agency Mutual agency refers to the relationship of principal and agent Among partners Example in case of firm of A,B and C When A acts A- Agent B and C- Principal When B acts B- Agent A and C- Principal When C acts C- Agent A and B- Principal
  15. 15.  Mutual agency- A business carried on by all ofMutual agency- A business carried on by all of them or any of them acting for all can bind allthem or any of them acting for all can bind all the partners of the firm.the partners of the firm. Relationship in case of a firm of A, B and C A- Agent B and C- Principals B- Agent A and C- Principals C- Agent A and B- Principals
  16. 16.  Share profit- Sharing of losses by all theShare profit- Sharing of losses by all the partners is not essential. The partnerspartners is not essential. The partners may have express agreement, may agreemay have express agreement, may agree that any one or more of them shall not bethat any one or more of them shall not be liable for the losses. But if nothing isliable for the losses. But if nothing is expressly agreed upon by the partners, itexpressly agreed upon by the partners, it is implied that the profit and losses will beis implied that the profit and losses will be shared equally.shared equally.
  17. 17. Advantages of Partnership FirmAdvantages of Partnership Firm  Easy to formEasy to form:: Like sole proprietorships, partnershipLike sole proprietorships, partnership businesses can be formed easily without any compulsory legalbusinesses can be formed easily without any compulsory legal formalities. It is not necessary to get the firm registered. Aformalities. It is not necessary to get the firm registered. A simple agreement or partnership deed, either oral or in writing,simple agreement or partnership deed, either oral or in writing, is sufficient to create a partnership.is sufficient to create a partnership.  Availability of large resources:Availability of large resources: Since two or moreSince two or more partners join hands to start a partnership business, it may bepartners join hands to start a partnership business, it may be possible to pool together more resources as compared to a solepossible to pool together more resources as compared to a sole proprietorship. The partners can contribute more capital, moreproprietorship. The partners can contribute more capital, more effort and more time for the businesseffort and more time for the business ContdContd..
  18. 18. Advantages contd.Advantages contd.  Better decisions:Better decisions: The partners are the owners of the business. Each ofThe partners are the owners of the business. Each of them has equal right to participate in the management of the business. Inthem has equal right to participate in the management of the business. In case of any conflict, they can sit together to solve the problem. Since allcase of any conflict, they can sit together to solve the problem. Since all partners participate in the decision-making process, there is less scope forpartners participate in the decision-making process, there is less scope for reckless and hasty decisions.reckless and hasty decisions.  Flexibility in operationsFlexibility in operations:: A partnership firm is a flexibleA partnership firm is a flexible organization. At any time, the partners can decide to change the size ororganization. At any time, the partners can decide to change the size or nature of the business or area of it’s operation. There is no need to follownature of the business or area of it’s operation. There is no need to follow any legal procedure. Only the consent of all the partners is required.any legal procedure. Only the consent of all the partners is required. contd.contd.
  19. 19. Contd.Contd.  Sharing risks:Sharing risks: In a partnership firm all the partners “share” theIn a partnership firm all the partners “share” the business risks. For example, if there are three partners and the firmbusiness risks. For example, if there are three partners and the firm makes a loss of Rs.12,000 in a particular period, then all partnersmakes a loss of Rs.12,000 in a particular period, then all partners may share it and the individual burden will be Rs.4000 only.may share it and the individual burden will be Rs.4000 only. Because of this, the partners may be encouraged to take up moreBecause of this, the partners may be encouraged to take up more risk and hence expand their business more.risk and hence expand their business more.  Benefits of specialization:Benefits of specialization: Since all the partners are owners of theSince all the partners are owners of the business, they can actively participate in every aspect of business as perbusiness, they can actively participate in every aspect of business as per their specialization, knowledge and experience. If you want to start a firmtheir specialization, knowledge and experience. If you want to start a firm to provide legal consultancy to people, then one partner may deal with civilto provide legal consultancy to people, then one partner may deal with civil cases, one in criminal cases, and another in labor cases and so on as per thecases, one in criminal cases, and another in labor cases and so on as per the individual specialization. Similarly, two or more doctors of differentindividual specialization. Similarly, two or more doctors of different specialization may start a clinic in partnership.specialization may start a clinic in partnership.
  20. 20. Contd.Contd.  Protection of interest of each partner:Protection of interest of each partner: In aIn a partnership firm, every partner has an equal say in decisionpartnership firm, every partner has an equal say in decision making and the management of the business. If any decisionmaking and the management of the business. If any decision goes against the interest of any partner, he can prevent thegoes against the interest of any partner, he can prevent the decision from being taken. In extreme cases an unsatisfieddecision from being taken. In extreme cases an unsatisfied partner may withdraw from the business and can dissolve it. Inpartner may withdraw from the business and can dissolve it. In such extreme cases the “partnership deed” is required. Insuch extreme cases the “partnership deed” is required. In absence of the partnership deed, no legal protection is given toabsence of the partnership deed, no legal protection is given to the partners.the partners.
  21. 21. Disadvantage of Partnership FirmDisadvantage of Partnership Firm  Unlimited liability:Unlimited liability:All the partners are jointly liable for the debt of theAll the partners are jointly liable for the debt of the firm. They can share the liability among themselves or any one can befirm. They can share the liability among themselves or any one can be asked to pay all the debts even from his personal properties depending onasked to pay all the debts even from his personal properties depending on the arrangement made between the partners.the arrangement made between the partners.  Uncertain life:Uncertain life:The partnership firm has no legal existence separateThe partnership firm has no legal existence separate from it’s partners. It comes to an end with death, insolvency, incapacity orfrom it’s partners. It comes to an end with death, insolvency, incapacity or the retirement of a partner. Further, any unsatisfied or discontent partnerthe retirement of a partner. Further, any unsatisfied or discontent partner can also give notice at any time for the dissolution of the partnership.can also give notice at any time for the dissolution of the partnership.  No transferability of share:No transferability of share:If you are a partner in any firm, youIf you are a partner in any firm, you cannot transfer your share or part of the company to outsiders, without thecannot transfer your share or part of the company to outsiders, without the consent of other partners. This creates inconvenience for the partner whoconsent of other partners. This creates inconvenience for the partner who wants to leave the firm or sell part of his share to others.wants to leave the firm or sell part of his share to others. Contd.Contd.
  22. 22. Contd.Contd.  Lack of harmony:Lack of harmony: In a partnership firm every partner has anIn a partnership firm every partner has an equal right to participate in the management. Also, everyequal right to participate in the management. Also, every partner can place his or her opinion or viewpoint before thepartner can place his or her opinion or viewpoint before the management regarding any matter at any time. Because of this,management regarding any matter at any time. Because of this, sometimes there is a possibility of friction and discontentsometimes there is a possibility of friction and discontent among the partners. Difference of opinion may lead to the endamong the partners. Difference of opinion may lead to the end of the partnership and the business.of the partnership and the business.  Limited capital:Limited capital: Since the total number of partners cannotSince the total number of partners cannot exceed 20, the capital to be raised is always limited. It may notexceed 20, the capital to be raised is always limited. It may not be possible to start a very large business in partnership formbe possible to start a very large business in partnership form..
  23. 23. Types of PartnershipTypes of Partnership Partnership at Will (Sec.7) Particular Partnership (Sec.8) On the Basis of Duration
  24. 24. Partnership at Will [Sec.7 read withPartnership at Will [Sec.7 read with Sec.43)]Sec.43)]  When there is no provision in partnership agreementWhen there is no provision in partnership agreement (known as partnership Deed, if in writing) for:(known as partnership Deed, if in writing) for:  The duration of their partnership, orThe duration of their partnership, or  The determination of their partnership,The determination of their partnership, then the partnership is called ‘Partnership at Will’.then the partnership is called ‘Partnership at Will’.  Special feature ofSpecial feature of ‘‘Partnership at will’Partnership at will’ is that suchis that such partnership may be dissolved by any partner by giving apartnership may be dissolved by any partner by giving a notice in writing to all other partners of his intention tonotice in writing to all other partners of his intention to dissolve the partnership.dissolve the partnership.  The partnership will be dissolved from that date which isThe partnership will be dissolved from that date which is mentioned in the notice as the date of dissolution and if nomentioned in the notice as the date of dissolution and if no date is mentioned then from the date of communication ofdate is mentioned then from the date of communication of notice.notice.
  25. 25. Particular Partnership [sec. 8]Particular Partnership [sec. 8]  When a partnership is formed for aWhen a partnership is formed for a  Specific venture or undertaking, orSpecific venture or undertaking, or  Particular period (fixed term)Particular period (fixed term) then such partnership is called a ‘particular partnership’.then such partnership is called a ‘particular partnership’.  Such partnership comes to an end on the completion ofSuch partnership comes to an end on the completion of the venture or the expiry of time period.the venture or the expiry of time period.  If such partnership is continued after the expiry of termIf such partnership is continued after the expiry of term or completion of venture,or completion of venture, it is deemed to be ait is deemed to be a partnership at will.partnership at will.  A particular partnership may be dissolved before theA particular partnership may be dissolved before the expiry of the term or completion of the ventureexpiry of the term or completion of the venture only byonly by the mutual consent of all the partners.the mutual consent of all the partners.
  26. 26. Contd.Contd.  Sec. 17 (b)Sec. 17 (b) of the Act provides that if aof the Act provides that if a firm, constituted for a fixed term,firm, constituted for a fixed term, continues to carry on business after thecontinues to carry on business after the expiry of that term,expiry of that term, thenthen the partnershipthe partnership will becomewill become partnership at willpartnership at will ANDAND mutual rights and duties of partners willmutual rights and duties of partners will remain same as they were before theremain same as they were before the expiry.expiry.
  27. 27. Partnership deedPartnership deed  A partnership is formed by an agreement. ThisA partnership is formed by an agreement. This agreement may be in writing or oral though the lawagreement may be in writing or oral though the law does not expressly require that the partnershipdoes not expressly require that the partnership agreement should be in writing, when the contract ofagreement should be in writing, when the contract of partnership is made in writing, it takes the form of apartnership is made in writing, it takes the form of a document.document. The document which contains the term ofThe document which contains the term of a partnership as agreed among the partners is calleda partnership as agreed among the partners is called “partnership deed”.“partnership deed”.  The partnership Deed is to be duly stamped as perThe partnership Deed is to be duly stamped as per the Indian Contract Act, and duly signed by all thethe Indian Contract Act, and duly signed by all the partners.partners. ContdContd..
  28. 28. Contents of partnership DeedContents of partnership Deed However, a Partnership Deed should contain the followingHowever, a Partnership Deed should contain the following clause:clause:  Name of the firm, Name of the partnersName of the firm, Name of the partners  Nature and place of businessNature and place of business  Duration of partnershipDuration of partnership  CapitalCapital  Share of partners in profits and lossesShare of partners in profits and losses  Bank Account firm, Books of accountBank Account firm, Books of account  Rules as to admission, expulsion, retirement of partnersRules as to admission, expulsion, retirement of partners  Powers of partnersPowers of partners  Dissolution of firmDissolution of firm  Settlement of disputesSettlement of disputes
  29. 29. Registration ofRegistration of PartnershipPartnership
  30. 30.  Obtaining prescribed formObtaining prescribed form  Preparing statement in the prescribedPreparing statement in the prescribed formform  Signing the statementSigning the statement  Verifying the statementVerifying the statement  Submitting the statement with feeSubmitting the statement with fee  RegistrationRegistration  Issue of certificate of registrationIssue of certificate of registration
  31. 31. Types of PartnersTypes of Partners
  32. 32.  Active or Actual partnerActive or Actual partner  Sleeping partnerSleeping partner  Nominal partnerNominal partner  Sub- PartnerSub- Partner
  33. 33. ••Active partner–Actively participates in theActive partner–Actively participates in the conduct of the businessconduct of the business ••Sleeping Partner–Doesn’t take active partSleeping Partner–Doesn’t take active part ••Nominal Partner–A partner who lends hisNominal Partner–A partner who lends his name to the firm without having any realname to the firm without having any real interest in it.interest in it. ••Sub-Partner–When a partner agrees toSub-Partner–When a partner agrees to share his profits derived from the firm withshare his profits derived from the firm with a third person, a sub-partnership maya third person, a sub-partnership may arise. The third person is called as subarise. The third person is called as sub partner.partner.
  34. 34. Right and duties of partnersRight and duties of partners Subject to contractSubject to contract (Between the partners)(Between the partners)
  35. 35. Rights of PartnersRights of Partners  Right to take part in businessRight to take part in business  Right to be consultedRight to be consulted  Right to access to booksRight to access to books  Right to share the profitsRight to share the profits  Right in emergencyRight in emergency  Right as an agent of the firmRight as an agent of the firm  Right to prevent admission of a new partnerRight to prevent admission of a new partner  Right not to be expelledRight not to be expelled
  36. 36. Duties of PartnersDuties of Partners  To carry on business to the greater advantageTo carry on business to the greater advantage  To be faithfulTo be faithful  To render true accountsTo render true accounts  To give full informationTo give full information  To indemnify for fraudTo indemnify for fraud  Duty to share lossesDuty to share losses  To act within authorityTo act within authority  To be liable for the act of the firmTo be liable for the act of the firm
  37. 37. INCOMING ANDINCOMING AND OUTGOINGOUTGOING PARTNERSPARTNERS
  38. 38.  . Introduction of a partner. Introduction of a partner  (1) Subject to contract between the partners(1) Subject to contract between the partners and to the provisions of section 30, no personand to the provisions of section 30, no person shall be introduced as a partner into a firmshall be introduced as a partner into a firm without the consent of all the existingwithout the consent of all the existing partners.partners.  (2) Subject to the provisions of section 30, a(2) Subject to the provisions of section 30, a person who is introduced as a partner into aperson who is introduced as a partner into a firm does not thereby become liable for anyfirm does not thereby become liable for any act of the firm done before he became aact of the firm done before he became a partner.partner.
  39. 39.  . Retirement of a partner. Retirement of a partner (1) A partner may retire-(1) A partner may retire- (a) with the consent of all the other partners,(a) with the consent of all the other partners, (b) in accordance with an express agreement(b) in accordance with an express agreement by the partners, orby the partners, or (c) where the partnership is at will, by giving(c) where the partnership is at will, by giving notice in writing to all the other partners ofnotice in writing to all the other partners of his intention to retire.his intention to retire.
  40. 40.  Expulsion of a partnerExpulsion of a partner  (1) A partner may not be expelled from a(1) A partner may not be expelled from a firm by any majority of the partners, save infirm by any majority of the partners, save in the exercise in good faith of powersthe exercise in good faith of powers conferred by contract between the partners.conferred by contract between the partners.  (2) The provisions of sub-sections (2), (3)(2) The provisions of sub-sections (2), (3) and (4) of section 32 shall apply to anand (4) of section 32 shall apply to an expelled partner as if he were a retiredexpelled partner as if he were a retired partner.partner.
  41. 41.  Insolvency of a partnerInsolvency of a partner (1) Where a partner in a firm is adjudicated an(1) Where a partner in a firm is adjudicated an insolvent he ceases to be a partner on the dateinsolvent he ceases to be a partner on the date on which the order of adjudication is made,on which the order of adjudication is made, whether or not the firm is hereby dissolved.whether or not the firm is hereby dissolved.  By death of a partnerBy death of a partner (1) Where under a contract between the(1) Where under a contract between the partners the firm is not dissolved by the deathpartners the firm is not dissolved by the death of a partner, the estate of a deceased partner isof a partner, the estate of a deceased partner is not liable for any act of the firm done after hisnot liable for any act of the firm done after his death.death.
  42. 42. DISSOLUTION OF ADISSOLUTION OF A FIRMFIRM
  43. 43. DISSOLUTION OFDISSOLUTION OF PARTNERSHIP ANDPARTNERSHIP AND DISSOLUTION OFDISSOLUTION OF FIRMFIRM
  44. 44.  The dissolution of partnership between allThe dissolution of partnership between all the partners of a firm is called thethe partners of a firm is called the dissolution of the firm. [section 39]. Thus,dissolution of the firm. [section 39]. Thus, if some partner is changed/added/ goesif some partner is changed/added/ goes out, the ‘relation’ between them changesout, the ‘relation’ between them changes and hence ‘partnership’ is dissolved, butand hence ‘partnership’ is dissolved, but the ‘firm’ continues. However, completethe ‘firm’ continues. However, complete breakage between relations of all partnersbreakage between relations of all partners is termed as ‘dissolution of firm’. Afteris termed as ‘dissolution of firm’. After such dissolution, the firm no more exists.such dissolution, the firm no more exists.
  45. 45.  Thus, ‘Dissolution of partnership’ isThus, ‘Dissolution of partnership’ is different from ‘dissolution of firm’.different from ‘dissolution of firm’. ‘Dissolution of partnership’ is only‘Dissolution of partnership’ is only reconstruction of firm, while ‘dissolution ofreconstruction of firm, while ‘dissolution of firm’ means the firm no more exists afterfirm’ means the firm no more exists after dissolution.dissolution.
  46. 46.  Dissolution of a FirmDissolution of a Firm -- A partnership firm isA partnership firm is an ‘organization’ and like every ‘organ’ it has toan ‘organization’ and like every ‘organ’ it has to either grow or perish. Thus, dissolution of a firmeither grow or perish. Thus, dissolution of a firm is inevitable part in the life of partnership firmis inevitable part in the life of partnership firm some time or the other.some time or the other.  Dissolution of a firm without intervention ofDissolution of a firm without intervention of Court can be (a) By agreement (section 40) (b)Court can be (a) By agreement (section 40) (b) Compulsory dissolution in case of insolvencyCompulsory dissolution in case of insolvency (section 41) (c) Dissolution on happening of(section 41) (c) Dissolution on happening of certain contingency (section 42) (d) By notice ifcertain contingency (section 42) (d) By notice if partnership is at will (section 43).partnership is at will (section 43).
  47. 47. Mode of dissolution ofMode of dissolution of firmfirm
  48. 48.  * Dissolution by agreement - [section 40].* Dissolution by agreement - [section 40].  * Compulsory dissolution in case of insolvency -* Compulsory dissolution in case of insolvency - [section 41][section 41]  * Dissolution on the happening on certain* Dissolution on the happening on certain contingencies [section 42]contingencies [section 42]  * Dissolution by notice of partnership at* Dissolution by notice of partnership at will will  [section 43(2)][section 43(2)]  * Dissolution by the court* Dissolution by the court
  49. 49. Dissolution by agreementDissolution by agreement  . Dissolution by agreement : A firm. Dissolution by agreement : A firm may be dissolved with the consent ofmay be dissolved with the consent of all the partners or in accordance withall the partners or in accordance with a contract between the partners.a contract between the partners.
  50. 50. Compulsory DissolutionCompulsory Dissolution  A firm is dissolvedA firm is dissolved  a) by the adjudication of all the partners or of alla) by the adjudication of all the partners or of all partners but one as insolvent or,partners but one as insolvent or,  b) By the happening of any event which makesb) By the happening of any event which makes it unlawful for the business of the firm to beit unlawful for the business of the firm to be carried on or for the partners to carry it on incarried on or for the partners to carry it on in partnership.partnership.
  51. 51. Dissolution on happening ofDissolution on happening of certain contingenciescertain contingencies  a) If constituted for a fixed term, by thea) If constituted for a fixed term, by the expiry of that termexpiry of that term  b) If constituted to carry out one or moreb) If constituted to carry out one or more adventures or undertakings by theadventures or undertakings by the completion thereof.completion thereof.  c) by the death of a partner.c) by the death of a partner.  d) by the adjudication of a partner as and) by the adjudication of a partner as an insolvent.insolvent.
  52. 52. Dissolution by notice ofDissolution by notice of partnership at willpartnership at will  (1) Where the partnership is at will the firm(1) Where the partnership is at will the firm may be dissolved by any partner giving noticemay be dissolved by any partner giving notice in writing to all the other partners of hisin writing to all the other partners of his intention to dissolve the firm.intention to dissolve the firm.  (2) The firm is dissolved as from the date(2) The firm is dissolved as from the date mentioned in the `notice as the date ofmentioned in the `notice as the date of dissolution or, if no date is so mentioned, asdissolution or, if no date is so mentioned, as from the date of the communication of thefrom the date of the communication of the notice.notice.
  53. 53. Dissolution of partnership byDissolution of partnership by NoticeNotice  Dissolution of partnership at willDissolution of partnership at will Notice in writing to other partners isNotice in writing to other partners is necessarynecessary
  54. 54. Dissolution by the CourtDissolution by the Court  a) That a partner has become of unsound mind,a) That a partner has become of unsound mind, in which case the suit may be brought as wellin which case the suit may be brought as well by the next friend of the partner who hasby the next friend of the partner who has become of unsound mind as by any otherbecome of unsound mind as by any other partner.partner.  b) That a partner, other than the partner suing,b) That a partner, other than the partner suing, has become in any way permanently incapablehas become in any way permanently incapable of performing his duties as partner.of performing his duties as partner. 
  55. 55.  c) that a partner, other than the partnerc) that a partner, other than the partner suing, is guilty of conduct which is likely tosuing, is guilty of conduct which is likely to affect prejudicially the carrying on of theaffect prejudicially the carrying on of the business, regard being had to the naturebusiness, regard being had to the nature of the business.of the business.
  56. 56.  d) that a partner, other than the partnerd) that a partner, other than the partner suing, willfully or persistently commitssuing, willfully or persistently commits breach of agreement relating to thebreach of agreement relating to the management of the affairs of the firm ormanagement of the affairs of the firm or the conduct of its business, or otherwisethe conduct of its business, or otherwise so conducts himself in matter relating toso conducts himself in matter relating to the business that it is not reasonablythe business that it is not reasonably practicable for the other partners to carrypracticable for the other partners to carry on the business in partnership with him.on the business in partnership with him.
  57. 57.  e) That a partner, other than the partnere) That a partner, other than the partner suing has in any way transferred thesuing has in any way transferred the whole of his interest in the firm to a thirdwhole of his interest in the firm to a third party, or has allowed his share to beparty, or has allowed his share to be charged under the provisions of rule 49 ofcharged under the provisions of rule 49 of Order XXI of the First Schedule to theOrder XXI of the First Schedule to the Code of Civil Procedure, 1908 or hasCode of Civil Procedure, 1908 or has allowed it to be sold in the recovery ofallowed it to be sold in the recovery of arrears, of land revenue or of any duesarrears, of land revenue or of any dues recoverable as arrears of land revenuerecoverable as arrears of land revenue due by the partner.due by the partner.
  58. 58.  f) That the business of the firm cannotf) That the business of the firm cannot be carried on save at a loss.be carried on save at a loss.  g) On any other ground which rendersg) On any other ground which renders it just and equitable that the firmit just and equitable that the firm should be dissolved.should be dissolved.

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