lecture-27 - LESSON 27: INDIAN PARTNERSHIP ACT, 1932...

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Learning Objectives At the end of this chapter, you will able to know: · The modes of dissolution of partnership · The consequences of dissolution of partnership · The settlement of accounts on dissolution of partnership Introduction Today, we will be discussing dissolution of partnership business. But before going ahead you need to understand that there is a difference between the dissolution of partnership and dissolution of firm. Section 39 of the Act provides that there is a difference between the dissolution of partnership and the dissolution of the firm. Partnership is a relation between the partners and the partnership firm is an entity which exists because of partnership relations. Thus, whenever a partner leaves the firm, partnership is dissolved but the firm continues until the partnership firm is dissolved. After starting the business, partners may feel like closing the business, may be because the business is not lucrative or it is not going the way they predicted or for any other reason. When a partner close down the firm, dissolution of the partnership firm takes place. Thus , when partners close down the business, dissolution of the partnership firm takes place. The dissolution of partnership between all the partners of the firms occurs is called dissolution of the firm. Let us now concentrate on the modes of dissolution of the firm. Modes of Dissolution of the Firm Section 40- Dissolution by Agreement A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners. Section 41- Compulsory dissolution A firm is dissolved-(a) By the adjudication of all the partners or of all the partners but one as insolvent, or (b) By the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership: It is further provided that, where more than one separate adventure or undertaking is carried on by the firm the illegality of one or more shall not of itself cause the dissolution of the firm in respect of its lawful adventures and undertakings. Section 42- Dissolution on the Happening of Certain Contingencies Subject to contract between the partners a firm is dissolved- a)If constituted for a fixed term, by the expiry of that term; b)If constituted to carry out one or more adventures or undertakings, by the completion thereof; c)By the death of a partner; and d)By the adjudication of a partner as an insolvent. Section 43- Dissolution by notice of partnership at will 1)Where the partnership is at will, any partner giving notice in writing to all the other partners of his intention to dissolve the firm may dissolve the firm. 2)The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice. Section 44- Dissolution by the court
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This note was uploaded on 09/27/2011 for the course BUS 100 taught by Professor Sherry during the Spring '11 term at Faculty of English Commerce Ain Shams University.

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lecture-27 - LESSON 27: INDIAN PARTNERSHIP ACT, 1932...

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