DISSOLUTION OF PARTNERSHIP FIRM

MEANING: Dissolution of partnership means discontinuance

of relationship between partners.
 Conditions of dissolution of
firm

Dissolution without the Dissolution by the order of

interference of the court court
 Dissolution without the interference of the
court

Dissolution Compulsor Dissolution on Dissolution

by y the happening by Notice
agreement dissolution of certain events

Fulfillment of the
Expiry Death Insolvenc
object for which
of the of y of a
the partner ship
period partner partner
firm was formed
 Dissolution by the
agreement
When all the partner of the firm agree to
dissolve the partnership firm business, it is
called dissolution by agreement
 Compulsory
dissolution
There is compulsory dissolution of partnership firm under the following circumstance:
 By the adjudication of all partners or all except one becoming insolvent.
Or
 By the business of the firm becoming unlawful due to the happening of any such
event.
Dissolution on the happening of certain
events
On the expiry of the period for which a partner
ship firm was formed

On the death of partner

On the insolvency of a partner

On the fulfillment of the object for which the

partnership firm was formed
 Dissolution by
Notice
When the duration of the partnership business is not fixed and the partnership
is at will, the firm may be dissolved by any partner, giving notice in writing to all
the other partners of his intention to dissolve the firm.
 Dissolution by the order of
court

Continuous Just and

Insanit Misconduct equitable
loss
y ground

Persistent
disregard of
Permanent Transfer of
partnership
incapacity interest
agreement by a
partner
 Insanity
If a partner ( not a sleeping partners has become
of unsound mind, then court may allow dissolution
of firm
 Permanent
incapacity
If a partner ( not a sleeping partners) has become
permanently incapable of performing of his duties
as partner, then court may allow dissolution of firm
 Misconduct of partners
When any partner is guilty of any misconduct which is
likely to adversely affect the carrying on business the court
may allow dissolution of firm.
 Persistent disregard of
partnership agreement by a
partner
When a partner willfully or persistently commits breech
of agreement which regard to matters relating to the
business of the firm , any other partner may apply to
court for dissolution of firm
 Continuous loss
When a firm is working in continuous
loss, any partner may apply to court
for dissolution of firm.
 Transfer of interest
When a partner has transferred the whole of his interest
in the firm to a third party then any other partner may
apply to court for dissolution.