The partnership between brothers who owned a sugar mill was dissolved in 1944 when one brother filed a lawsuit. This led to litigation over the next several years regarding management of the mill and distribution of profits during receivership. The Supreme Court ultimately ruled that the date of dissolution was when the last summons was served in the 1944 lawsuit, not when it was filed. It restored the original trial court decree and rejected the High Court's ruling that limitation period began when the suit was filed rather than when all parties were served.

1. DISSOLUTION OF PARTNERSHIP FIRM

2. DISTINCTION The action of distinguishingTHE PARTNERSHIP ACTDissolution of partnershipDissolution of firmFew of the partners but not allAll the partners of the firm.Extinction of relationship between partners.Complete closure of business

3. Dissolution of Partnership The dissolution of partnership between few of the partners but not all is called dissolution of partnership. Dissolution of firmThe dissolution of partnership between all the partners of a firm is called dissolution of firm.

4. EXAMPLEABCABCABC

7. VOLUNTARYThe dissolution occurs with the consent of all the partners.The firm is compulsory dissolved when all the partners will have no other option.Fixed term expiry

8. Completion of the adventure

9. Death of partner.

10. Insolvency of partner {Sec 42}BY NOTICE {Sec 42}HAPPENING OF CONTINGENCIES {Sec 40}{Sec 41}COMPULSARY DISSOLUTION BY AGREEMENTThe partner ship is at will the firm may be dissolved any time by any partner giving notice to other partners.

11. DISSOLUTION BY COURT ---{sec 44}When a partner becomes of unsound mind;When partner becomes permanently incapable of performing his duties as a partner;When a partner becomes of unsound mind;When a partner commits willful or persistent breach of agreement;PERSISTENT BREACH OF AGREEMENTINSANITYMISSCONDUCTPERMANENT INCAPACITYWhen the partner sell or transfers his intrest.TRANSFER OF INTRESTJUST AND EQUITBLECONTINUOUS LOSSESSWhen a business cannot be carried on expect at loss;In addition to the above, the court may order dissolution on any other ground.

12. CONSEQUENCES OF DISSOLUTIONRIGHTS OF A PARTNER AFTER DISSOLUTION:[S46]Right to have business wound up after dissolution.[S46]

13. Right to have firm’s debts settled out of firm’s property:[S49]

14. Rights to personal profits earned after dissolution:[S50]

15. Right to return of premium or premature dissolution:[S51]

16. Right to restrain from use of firm name or firm property: [S53]LIABILITY OF PARTNER AFTER DISSOLUTION1. Liability for acts of partners done after dissolution:[S45]2.Continuing authorities of partner for purpose of winding up[S47]Winding up the affairs of the firm.

17. Completing the transactions already begun but unfinished at the time of dissolution.SETTLEMENT OF ACCOUNTS UPON DISSOLUTIONSEC 48 OF PARTNERSHIP ACTPAYMENT OF LOSSESlosses include deficiency of capital, shall be paid first out of profits, next out of capital, and lastly, if necessary, by partnership individually in proportion.APPLICATION OF ASSETSThe assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, comes in application of assets.Pay debt to third party.

18. In paying to each partner rateably what is due to him as capital.

19. The residue shall be divided is a proportion they use to share profit.FIRM DEBTS Vs PRIVATE DEBTSSec 49 say if debt due from the firm and debt due to from the partner then firm property first use to pay firm due and surplus use to pay partner due as per share.LOSS ARISING FROM INSOLVENCY OF A PARTNERif partner become insolvent & unable to contribute then the rule laid down in the landmark case of GARNER V/S MURRAY will be applicable in the absence of a contract to contrary.a)-the loss on realisation of asset shall be borne by all the partners in their profit sharing ratio.b)-the loss on account of deficiency of capital of the insolvent partner shall be borne by the solvent partner in the ratio of their capital standing before dissolution.SALE OF GOODWILL AFTER DISSOLUIONAlthough goodwill is intangible asset, it can be sold like another asset sec 55 tells us about sale of goodwill.a)- settling of the account after dissolution goodwill shall be subject to contract b/w the partner or included asset and it can be sold either separately or with property of the firm.b)-Right of buyer and seller of goodwill.

20. PUBLIC NOTICE According to Sec. 72 of The Indian Partnership Act 1932, a public notice is given :When a partner retiresfrom a firm.

21. When a firm is dissolved.

22. When a minor, admitted to benefits of firm, attains majority.Formalities for public notice in case of a registered firmNotice to the Registrar of Firms under Section 63.

23. Publication in Official Gazette.