• Dissolution of a partnership firm on a past date

Can one or more partners dissolve a Partnership firm on a Past date?

10 partners out of 12 want to dissolve the partnership firm, since there are no activities planned or taken up since many years and also they had to spend their personal amounts to clear the debts for maintenance of firm and assets.

All partners met 2 months ago, discussed dissolution process, settlement of debts etc.,
A resolution was drafted on the same day on which 10 partners signed and 12 partners did not sign

Now, can one or more of these 10 partners (who signed) dissolve this partnership firm by sending notice to all partners on the date of this resolution:?

The question is specific about CAN DISSOLUTION (of Partnership firm) BE DONE AT A PAST DATE???
Asked 1 year ago in Property Law
Religion: Hindu

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9 Answers

Hi,

 

With reference to your query, dissolution of partnership can be done with effect from past date i.e. the date of resolution but dissolution of partnership will be of a present date on which you will send the notice to all the partner.

 

Separately, while issuing notice, partnership deed needs to be reviewed and acted accordingly.

 

For any further query. please feel free to contact us.

 

Regards,

Nitesh A.

Nitesh Agarwal
Advocate, Mumbai
21 Answers
3 Consultations

4.5 on 5.0

Dissolution can be done on the resolution of past but not on past date. It will be effective from date of present

Prashant Nayak
Advocate, Mumbai
28570 Answers
101 Consultations

4.4 on 5.0

Dissolution of firm cannot be done at past date 

 

2) 

Section 43 of Indian partnership act provides firm may be dissolved by any partner giving notice in writing to other partners of intention RTI dissolve the firm

3) firm would be dissolved from date mentioned in notice as date of dissolution

4) if no date mentioned in notice from date of receipt of notice

Ajay Sethi
Advocate, Mumbai
89848 Answers
6516 Consultations

5.0 on 5.0

Hi, if the partners don't want to continue in the Partnership Firm, they can retire from the Firm. Here, in your case only 10 partners want to dissolve the firm and others are want to continue with the firm. Therefore, you can't dissolve the Firm. It is better you can retire from the Partnership Firm. 

Pradeep Bharathipura
Advocate, Bangalore
5468 Answers
314 Consultations

4.5 on 5.0

Dear Sir

The dissolution cannot be done from the past date.

The firm would be dissolved from the date mentioned in the notice.

Thank you

Anik Miu
Advocate, Bangalore
5838 Answers
59 Consultations

4.9 on 5.0

1. your query may be specific but to get a specific answer, you need to share the partnership contract 

2.if the partnership is at Will as contained in the contract then the dissolution process will happen as agreed in the contract and not by any resolution which is in deviation to the contract

3. so i would suggest to please check the partnership contract first and ascertain how all the parties had agreed in the contract as regards the manner of dissolving the firm 

Yusuf Rampurawala
Advocate, Mumbai. E: adv.yusuf.rampurawala@gmail.com
7074 Answers
79 Consultations

5.0 on 5.0

If a partnership business is at will, any partner can dissolve the partnership by giving advance notice. Notice will contain a date from which dissolution will be effective.

Dissolving a partnership firm means discontinuing the business under the name of the said partnership firm. In this case, all liabilities are finally settled by selling off assets or transferring them to a particular partner, settling all accounts that existed with the partnership firm.

Dissolving a partnership firm is different from dissolving a partnership. In the former case, the firm ends its name and hence cannot do business in the future. But in case of dissolving a partnership, the existing partnership is dissolved by consent or on happening of a certain event, but the firm can retain its existence if remaining partners enter into a new partnership agreement.

T Kalaiselvan
Advocate, Vellore
80015 Answers
1674 Consultations

5.0 on 5.0

A partnership firm can be dissolved by many modes like by agreement on the happening of certain contingencies, or judicially.

A Partner in a partnership firm can dissolve it by giving notice of dissolution to other partners. The notice should be communicated to the other partners as mentioned in the agreement and if not mentioned then a mode of communication should be reasonable. The notice of dissolution should not be in between any transaction and if a partner gives notice of dissolution in between the transaction his notice should be held until the time the transaction is completed. The notice should be clear and should not be confusing in any sense. This should be properly communicated to the other partners. But Dissolution of firm cannot be done at a past date.

Please understand the following things  also

After the dissolution of the firm, every partner is entitled to equal rights or according to the contract. All the partners are entitled to the property of the firm applied in payment of the debts and liabilities of the firm and to have the surplus distributed among the partners or their representatives according to their rights. These rights are given when winding up of the firm is taking place. The dissolution of the partnership brings about a change in the relations between partners but partnership between them does not completely end. After the dissolution of the partnership, partners have certain rights regarding the given powers:

  1. Right to an equitable lien, when on the dissolution of the firm, every partner is entitled to certain rights like the right to have the property of the firm used in payments of debts and liabilities and rights to have surplus distributed among all the partners.
  2. Right to return of premium entitled at the time of the partnership, partners pay an amount in the form of premium when the partnership dissolves. Partners get that premium according to the agreement.
  3. Rights where a partnership contract is revoked for fraud or for other reasons: If a partner agrees to join a firm by fraud or by misrepresentation by the other partners or if he finds so, he has the right to put an end to the partnership agreement.
  4. Right to restrain the use of the firm’s name or property: after the dissolution of the partnership, the partner has a right to stop other partners from using the same name of the firm.
  5. The right to earn personal profit by using the firm’s name: if on the dissolution, the partner has a right to use the name of the firm as he buys goodwill of the firm and can earn profit from it.

 

Ajay N S
Advocate, Ernakulam
4027 Answers
99 Consultations

5.0 on 5.0

- A partnership firm can be dissolved, if all the partners have mutually agreed upon closing the partnership firm, or after entering into an agreement.

- Further, if a partnership business is at will, then any partner can dissolve the partnership by giving an advanced notice. Notice should contain a date from which dissolution will be effective.

- Further, if any of the partners becomes mentally unstable or misbehaves with the other partner or doesn’t abide by the clauses of the agreement, then the other partner may file a case in the court to dissolve the firm. However a court can dissolve the firm only if it is registered with the registrar of firms. 

- Further, in case of dissolution, accounts have to be settled and distributed as per the mode prescribed in section 48 of the Partnership Act.

- Hence , the dissolution can be done from the date mentioned in the notice. 

Mohammed Shahzad
Advocate, Delhi
10661 Answers
132 Consultations

5.0 on 5.0

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