Dissolve a Partnership Firm

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ABOUT THIS PRACTICE

Partnership firm is the business entity that is formed with a single motive of earning profit from business. Two or more parties come together with a formal agreement (known as Partnership Deed) to own and manage the business. Once the purpose is achieved or after the partners decide to put an end to their partnership it needs to be dissolved bringing the partnership to an end. On dissolution of the firm, the business of the firm comes to an end since its affairs come to an end by selling the assets and by paying for the liabilities and dismissing the claims of the partners. The dissolution of partnership among all partners of a firm is called dissolution of partnership firm. This is usually completed through a dissolution agreement between the partners.

Methods Of Dissolution Of A Partnership Firm

Dissolution with intervention of the court: Courts get involved in case a dissolution is started off by one partner by suing the other . But a court can dissolve the firm only if it is registered with the registrar of firms. Thus, an unregistered partnership firm can’t be dissolved by the court. The court may interfere and help in the dissolution in situations where one partner becomes incapable of carrying out his duties due to incapability, or unsound mind, if a partner is accountable for any misconduct that can harm the business, repeated violation of the partnership agreement by a partner. In such situations the court may get involved and help in legal dissolution of partnership.
Dissolution without courts intervention: Normally, partnership firms are dissolved through dissolution agreements between the concerned partners. All the partners come together and sign an agreement to confirm such a dissolution and mutually settle all the pending liabilities and accounts amongst themselves. Hence, a third party intervention is not required . This may happeb for numerous reasons like insolvency of partner/partners, or Unlawful business carried out in the name of the partnership firm by either of the partners. In case the term of the decided partnership lapses or the assignment for which the partnership was created comes to an end , Demise of one of the partners and resignation of a partner. It can also be dissolved by a notice of dissolution sent by one partner in written to all other partners.

Documents Required

PAN Card: All partners are required to submit their and the firms PAN number as identity proof.
Address Proof of firm: If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.
Accounting Information: The financial statement of the partnership firm
Legal Liabilities: A statement regarding pending litigation, if any involving the partnership firm.
List of secured creditors: Original partnership deed and all its modified versions
Address Proof of firm: If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.