Dissolution of Partnership Firm
- According to Section 39 of the Indian Partnership Act, 1932 the dissolution of partnership between all partners of a firm, is called Dissolution of the Firm.
- It is a complete breakdown of the relation of partnership between all the partners.
- The modes of Dissolution of the Firm are as under -
- Dissolution of the Firm Without the Order of the Court
- Dissolution of the Firm With the Order of the Court
- A firm may be dissolved without the Order of the Court in the following ways -
- Dissolution by Agreement (S. 40)
- Compulsory Dissolution (S. 41)
- By insolvency of partners.
- By happening of any event which makes the business of the firm illegal/unlawful
- .Dissolution on the happening of certain contingency (S. 42)
- On the expiry of the term of Partnership Firm
- On completion of the undertakings
- On the death of Partner
- Adjudication of Partner as Insolvent
- Dissolution by Notice of Partnership at Will (S. 43)
- A firm may be dissolved by the Order of the Court in the following circumstances. Section 44 of the Indian Partnership Act, 1932 deal with the same.
- Unsound Mind [S. 44 (a)]
- Permanent incapacity [S. 44(b)]
- Misconduct [S. 44 (c)]
- Persistent Commission of a Breach of Agreement [S. 44 (d)]
- Transfer of Interest [S. 44 (e)]
- Business at Loss [S. 44 (f)]
- Any other Ground [S. 44 (g)]