2. A Partnership is a
strategic alliance
between two or more
people.
1. Formal- each party’s
roles and obligations
are spelled out in a
written agreement.
2. Informal- roles and
obligations are
assumed or agreed on
verbally .
The term
“Dissolution” stands
for discontinuation or
termination of the
firm.
When the relation
between all the
partners of the form
comes to an end, this
is known as
dissolution of the firm.

3. • It means termination of the old partnership
agreement and a reconstruction of the firm due to
admission, retirement or death of a partner.
• Change in relation of partners.
• may or may not result in the closing down of the
business - remaining partners may agree to carry
on the business under a new agreement.

4. The partnership is deemed to have been
dissolved in any of the following cases:
• change in profit sharing ratio of existing partners
• admission of a new partner
• retirement of a partner
• expulsion of a partner
• death of a partner
• insolvency of a partner
• expiry of the period of partnership

5. • It means that a firm closes down its business
and comes to an end.
• the assets of the firm are sold and liabilities
are paid off .
• out of the remaining amount, the accounts of
the partners are settled.
• The partnership is automatically dissolved.

6. A partnership firm can be dissolved in any of
the following circumstances:
• all partners agree to dissolve the firm.
• business becomes unlawful or illegal.
• all partners except one become insolvent.
• court orders the dissolution of the firm.
• any partner gives notice of dissolution.
• a Partner is involved in continuous disregard of
Partnership Deed

7. By order of
the Court
Without the
order of the
Court

8. By Mutual
Agreement
Compulsory
Dissolution
By
Notice
On Happening
of an Event

9. • By Mutual Agreement All partners agree for its dissolution

10. •Compulsory Dissolution -All partners except one become insolvent
- business of the firm becomes unlawful

11. •On Happening of an Event - expiry of the term
- completion of the venture
- death of a partner
- insolvency of a partner

12. •By Notice any partner giving notice in writing to all the other
partners of his intention to dissolve the firm.

13. Insanity of a
partner
Permanent
Incapacity
Transfer of
interest
Persistent
breach of
contract
Just and
Equitable
ground
Misconduct
Perpetual
Losses
On the following grounds, a court may order for dissolution of
firm :

14. • Partners right to enforce winding up
• Continuing authority of the partners of a dissolved firm
• Settlement of accounts in the case of dissolution and winding up the
partnership firm.
• Giving notice