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    Dissolution of Firm Section 39 To Section 44 1

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    Ifra Zafar
    The document discusses the various modes of dissolution of a partnership firm under Indian law. There are six main modes: [1] by agreement between the partners; [2] compulsory dissolution due to certain events making the business unlawful; [3] upon the occurrence of certain contingencies such as expiration of term or death of a partner; [4] by notice of a partner wishing to dissolve a partnership at will; [5] by order of the court for reasons such as misconduct or perpetual losses; and [6] other just and equitable grounds as determined by the court. Dissolution is necessary to end the legal relations between the partners.

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    Dissolution of Firm Section 39 To Section 44 1

    Uploaded by

    Ifra Zafar
    43 views9 pages
    The document discusses the various modes of dissolution of a partnership firm under Indian law. There are six main modes: [1] by agreement between the partners; [2] compulsory dissolution due to certain events making the business unlawful; [3] upon the occurrence of certain contingencies such as expiration of term or death of a partner; [4] by notice of a partner wishing to dissolve a partnership at will; [5] by order of the court for reasons such as misconduct or perpetual losses; and [6] other just and equitable grounds as determined by the court. Dissolution is necessary to end the legal relations between the partners.

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    Dissolution-of-firm-Section-39-to-Section-44-1

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    The document discusses the various modes of dissolution of a partnership firm under Indian law. There are six main modes: [1] by agreement between the partners; [2] compulsory dissolution due to certain events making the business unlawful; [3] upon the occurrence of certain contingencies such as expiration of term or death of a partner; [4] by notice of a partner wishing to dissolve a partnership at will; [5] by order of the court for reasons such as misconduct or perpetual losses; and [6] other just and equitable grounds as determined by the court. Dissolution is necessary to end the legal relations between the partners.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    43 views9 pages

    Dissolution of Firm Section 39 To Section 44 1

    Uploaded by

    Ifra Zafar
    The document discusses the various modes of dissolution of a partnership firm under Indian law. There are six main modes: [1] by agreement between the partners; [2] compulsory dissolution due to certain events making the business unlawful; [3] upon the occurrence of certain contingencies such as expiration of term or death of a partner; [4] by notice of a partner wishing to dissolve a partnership at will; [5] by order of the court for reasons such as misconduct or perpetual losses; and [6] other just and equitable grounds as determined by the court. Dissolution is necessary to end the legal relations between the partners.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Dissolution of firm ( Section

    39 to Section 44)

    When the partnership is dissolved by all the partners then it is


    called a dissolution of a firm. It is necessary to dissolve the existing
    relations between the partners in order to dissolve the partnership .
    The partnership is dissolved either
    1)voluntary; or
    2)by the order of Court.
    Various Modes of Dissolution of Partnership Firm
    ● By Agreement (section 40)
    ● Compulsory dissolution (section 41)
    ● By the happening of certain events (section 42)
    ● By the partnership at will( section 43)
    ● By the court (section 44)
    Lets us further understand each mode in detail
    By Agreement

    ● The partnership can be dissolved when all the


    partners gives their consent to it.
    ● The partnership which was created for a particular
    purpose dissolved after the completion of such
    purpose.
    Compulsory Dissolution

    Sometimes an events make the partnership as unlawful


    to carry out his business. In such case the partners has
    no option except to dissolve. When a partnership firm
    carries more than one undertaking out of which one
    becomes unlawful then it is not compulsory to dissolve
    the partnership. It can withdraw from the illegal
    undertaking and can continue with other lawful
    undertaking
    On happening of certain contingencies
    The partnership is dissolved on the happening of certain
    contingencies. Certain contingencies includes:-
    ❖ On the expiration of fixed term; when the partnership is
    created for the fixed term,
    ❖ On the death of partner,
    ❖ On the completion of project or undertaking; when the
    partnership was created for the purpose of completing
    undertaking or project,
    ❖ On the adjudication of partners as a partner.
    By notice of partnership at will

    When any partners desire to dissolve partnership he


    serves a notice to all other partners expressing his
    intention to dissolve the partnership. If all the partners
    gives agrees then the partnership is dissolved.
    The partnership is dissolved on the date prescribed in
    the notice and if no such date is mentioned in the notice
    then date of dissolution of firm is the date of
    communication of notice
    By Order from the Court
    The Court may dissolve the partnership on any of the following
    grounds:-
    1) Unsound mind/insanity:-when any partners becomes
    unsound or insane then a suit is brought by a next friend of a partner
    who has become unsound or insane or any other partner.
    2) Incapability:- When the partners other than a suing partner become
    permanent incapable to perform his duties as a partner.
    3) Misconduct:-when the partners other than suing partner is guilty of
    any act which affect the carrying on a business with respect to the
    nature of business
    4) Continuing Breach of Contract:- a partner may continuously, persistently
    or willfully committing a breach of contract with regard to
    1) Management of affairs of its conduct
    2) A reasonable conduct of its business
    3) Conduct himself in such a manner that it is not possible for other partners
    to carry out the business of firm.
    In such case the other partners may file a suit in a court and the court may
    order to dissolve the firm. Following acts are considered as breach of
    agreement:-
    ● Keeping wrong accounts
    ● Refuse to show the accounts in spite of requests
    ● Keeping more cash than is actually allowed
    ● Embezzlement.
    5) Transfer of interest:-when a partner has transfer all his interest to the third party
    without the consent of other partners or gives a permission to Court to charge or sell his
    share for the recovery of arrear of land revenue and sit is filed by any other partners
    against such partners the court my dissolve the firm.

    6) Perpetual or Continuous losses:- when the business is continuously suffering loss


    and the court believes that the firm can not survive in the future due to continuous loss
    and cannot revive to its original position the court may order to dissolve the firm.

    7) Other grounds:- The court may find other just and equitable grounds for the
    dissolution of the firm. Such grounds are as follows:-
    Conflict between the partners
    Deadlock in the management
    Offence committed by any of its partner
    Loss of foundation of business.

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