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“Ignorance of the Law excuses no one“

Stage: 01Subject: Business Laws

Presentation: Partnership Dissolution

Group Members

Hammad Haseeb (96)

Kashif M.Bashir (67)

Aureb Hussain (139)

Naveed Ahmed (224)

Dissolution of Firm & Partner Modes of Dissolution

◦ By Voluntary Acts of The Partners or Without Interference of The Court

◦ By the Order of the Court Settlement Of Accounts

◦ Sale of Goodwill◦ Sharing of Deficiency◦ Application of Assets

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Partnership is a relationship between persons

Who have agreed To share profit Of a business Carried on by all or any one of them acting

for all

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Note:Persons who have entered into partnership are called individually ‘partners’&collectively a ‘firm’

A Firm Ceases to Exist. The Relationship Existing Between all the Partners of the Firm Discontinue.

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When One or More Partners Cease to be Partners of the Firm but Others Continue the Business in Partnership.

In this Case Firm is Reconstituted Without Any Dissolution.

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Dissolution without order of the Court (Sec. 40 to 43)

Dissolution by order of the Court (Sec. 44)

By agreement

(Sec 40)

By compulsory dissolution

(Sec. 41)

On the happening of

Certain contingencies

(Sec 42)

By notice

(Sec. 43)

On partner

Being of

Unsound

Mind

Permanent incapacity

of a partner

Misconduct

of a partner

affecting

business

Willful or

Persistent

Breaches of

Agreement

Transfer

or sale of whole

interest of a

partner

Business

of the firm

Cannot be

Carried on

Save at a

loss

Court being

satisfied on any other

equitable

ground

By Agreement ◦ With the Consent of all the Partners. ◦ Contract Between the Partners (Express Or Implied)

By Compulsory Dissolution Or By Operation Of Law◦ By the Adjudication of all the Partners or of all Partners

But one as Insolvent ◦ Happening of an Event which Makes it Unlawful.

On The Happening Of Certain Contingencies◦ On Expiry of Fixed Period for Which the Firm was

Formed.◦ On the Completion of the Project for Which the Firm was

Formed.◦ Death of a Partner.◦ On the Insolvency of Any Partner .

By Notice

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Insanity of Partner Permanent Incapacity of the Partner Misconduct of a Partner

◦ Gambling by a Partner.◦ Fraudulent Breach of Trust by a Partner.◦ Refusal of a Partner to Attend to Business.◦ Taking Away of Partnership Books By a Partner

Persistent Breach of Agreement

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Transfer of Interest Business of the Firm Working at a Loss Any Other Ground

◦ Dead Lock In The Management.◦ Partners Not on Speaking Terms.◦ Disappearance of the Substratum of the Business.◦ Lack of Co-operation or Mutual Confidence.

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Sale of Goodwill Sharing of Deficiency

◦ First Out of Profits.◦ Next Out of Capital.◦ Lastly, if Necessary, by the Partners Individually in the

Proportions in which They were Entitled to Share Profits.

Application of Assets◦ In Paying the Debts of the Firm to the Third Parties.◦ In Paying to Each Partner Rateably What is Due to Him

From the Firm for Advances Distinguished From Capital.◦ In Paying to Each Partner Rateably What is Due to Him on

Account of Capital.◦ The Residue, If any, Shall be Divided Among The Partners

in the Proportion in Which they Were Entitled to Share Profits.

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Question