• Dissolution of partnership firm

A partnership firm (unregistered) with two partners was dissolved by unregistered deed of dissolution due to retirement of one partner and dissolving partnership as well the firm . Can overdraft loan account opened by partnership firm availing 5.00 lacs of loan be continued shifting all loan liability on the remaining partner.
Also can the cheques of such account be used for payment of capital and other dues of retiring partner.

Kindly help by reply
C.P.Verma
Asked 4 years ago in Criminal Law
Religion: Hindu

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15 Answers

Hello,

What were the terms of dissolution with regards to the liability after the dissolution. Once the partnership has been disolved, no cheques of the such partnership can be used for payment.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

A partnershipfirm once dissolved its all asset and liabilities has to be settled, in a two partners firm if once leave the firm cannot be continued so the loan in name of partnership firm cannot be continued and cheques cannot be given.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

After the dissolution the assets and liabilities remaining should be divided among the partners and the balance the CC account should be may by the partners in their capital ratio.

The account should be closed as soon as possible and the PAN should be surrendered with the AO in the Income Tax department.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

1.Once the firm is dissolved the personalliabilty of the partner also relinquishes.

2. However the partners in the official capacity continues to remain jointly and severally liable for the unfinished job to be done or the pay the debt.

3. In this case with the dissolution of the firm the liberty of the firm does not go away to repay the bedt taken.

4.in that circumstances thecredor can sue the firm along with the aprtners or one aprtner only.

5. If one partner is sued he would be solely liable to repay the debt in the proceeding though he ahs to be compensated by the remaining partners subsequently.

6. Howeevr one partner cannot shift the burden to another wholly.

7. Please refer to section 45 of the Indian partnership Act to get an idea on this.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

once firm has been dissolved over draft account is to be closed

2)When a business is discontinued, the firm is said to be dissolved. As a result, all the accounts be closed. It is, therefore, necessary to open Realisation Account, Cash or Bank Account and Partners Capital Accounts.

(i) Realisation Accounts is opened for all transactions relating to realisation of assets and payment of liabilities. That is, on dissolution, it is essential to make sale of assets of the firm, realize cash and paying off the liabilities.

Realisation of assets and settlement of liabilities are centred round the Realisation Account. It is a nominal Account. The transactions – realisation and settlement – are over, the difference, being gain or loss will be transferred to Capital Accounts.

(ii) Cash/Bank Account is opened to record all cash transactions. When the purpose is over the Cash Account shows a balance, which is equal to the amounts due to partners.

(iii) Capital Accounts are opened to make all entries connected with the partners’ accounts. Current Accounts, if any, are transferred to Capital Accounts. Finally the Capital Accounts are closed by receiving or paying cash.

4) overdraft account cheques cannot be used for payment of capital , other dues to retiring partner

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

Dear Client,

An unregistered firm cannot enforce any rights arising from the contract. It also includes rights conferred by the Partnership Act unless the partner’s name is entered into the Register of Firms as a partner in the firm.

Well, retirement from the firm, dose not absolve the retiring partner from liabilities incurred before retirement. Any dues/loan remaining shall be payable either from self savings or from the account maintain in the name of firm,.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Show courts documents.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

have you filed police complaint of forgery , fabrication of documents , cheating against the exiting partner ?

2) if signatures on cheque are forged file case against exiting partner for forgery of cheque

3) did you lead evidence of hand writing expert regarding forgery of cheque and other documents

4) if you have taken legal proceedings against exiting partner you should succeed in appeal

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

You should keep following the case ongoing and file a case of cheating and forgery on the partner.

Give court evidence regarding the same and request for hand writing expert for examining the documents.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Then such deed is not a valid deed and nothing mentioned therein can be enforce.

Which case is pending before the sessions court?

And

At what stage the same is pending?

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

An unregistered partnership firm doesn't have any legal existence in the eyes of law. It can be sued but not sue others. You can do the same as internal arrangements and settlement but the same is legally void if some litigation crops.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

Dear Sir,

The law will take its course. Any business between two partners without registration acquired not legal right on each other. It is like with mutual understanding you have done your business. Conviction will be upheld and the only course is to suffer jail term. Nothing to bother.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

Hi,

In the present case, the case of forgery and cheating against that partner should be used and the same should be brought to court notice also.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Can overdraft loan account opened by partnership firm availing 5.00 lacs of loan be continued shifting all loan liability on the remaining partner.

Also can the cheques of such account be used for payment of capital and other dues of retiring partner

The contents of the dissolution deed itself is self explanatory wherein all such details would have been discussed and the actions to be taken on all such eventualities.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

Since the matter is in court, may be a cheque bounce case or forgery case agaisnt the other partner, the same has to be fought on merits and the documentary evidences supporting your claim.

If ther was no notice for retirement and if the signature is reported to have been forged, then this could have been taken up for verification and confirmation during trial proceedings.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

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