The dissolution of the partnership firm is said to be dissolving when relationships between partners are terminated. In the event of dissolution, the firm ceases to exist. The dissolution process includes the disposal of the asset and the debts are paid. The firm ceases all its activities and no partner has a relationship with other partners. The dissolution of a partnership firm is different from the dissolution of partnership. In the event of the dissolution of the partnership, the partnership agreement is terminated due to following reasons:

• Admission of new partner
• Non-payment, retirement or death of a partner
• Change in existing profit ratio
• At the completion of a particular business on which the partnership is built.
• On the expiry of the period fo which that partnership was formed

Other partners can continue the business by entering into a new agreement. The partnership can be terminated without the dissolution of the company. The termination of a partnership means a change in the partnership and the dissolution of the partnership firm means the termination of the company’s business.

According to Sec 39 of The Partnership Act, 1932 the dissolution of a partnership between all partners of a company is called a ‘dissolution of the partnership firm’.

After the dissolution, a partnership firm cannot do any kind of business work with anyone. It can only dispose of firm assets to determine value, pay liability of firm, and issue partner claims.

The dissolution of a partnership firm is possible in the following ways:

1. Dissolution by Agreement: The partnership firm may be dissolved if all partners agree to terminate or subject to the terms of the agreement.

2. Dissolution by notice: In the event of partnership at will, the dissolution of the company may occur if one of the partners gives notice in writing to other partners expressing his intention to liquidate the company.

3. Contingent Dissolution: In this case, the partnership can be dissolved by the occurrence of any of the following conditions:

• On the expiry of the date, if the partnership is for a fixed period of time.
• At the completion of a particular business on which the partnership is built.
• On the death of a partner
• On spending money on a partner

4. Compulsory liquidation: Compulsory liquidation of the company occurs in the following cases:

• When all the partners except one partner are said to have no money
• When a company’s business becomes illegal for some reason.
• When a company business becomes illegal due to the occurrence of an event.

5. Dissolution by the Court: The dissolution of a partnership firm may be ordered by the court due to the following reasons:

• When a partner becomes insane
• When a partner permanently fails to perform his or her duties as a partner.
• When a partner is guilty of misconduct that may affect the reputation and business of the firm.
• When a partner continues to violate the partnership agreement.
• When a partner transfers all his or her interest or shares with the firm to a third party.
• Where corporate business cannot be carried on except at a loss.
• Where the court’s opinion regarding the liquidation of the company is fair and equitable for any reason.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

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We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge