Difference between Dissolution of Partnership & Dissolution of Firm
Difference between Dissolution of Partnership & Dissolution of Firm
Sunday, June 21, 2020
Difference between Dissolution of Partnership & Dissolution of Firm
It must be kept in mind that the Dissolution of partnership and dissolution of the firms are two different things. The Dissolution of partnership never refers to the Dissolution of the firm. The dissolution of partnership means change in the composition or arrange of partners. The dissolution of the firm means end to the partnership business.
DISSOLUTION OF PARTNERSHIP
DISSOLUTION OF PARTNERSHIP
Dissolution of partnership means modification in the partnership agreement with reference to relations among partners. In fact it is a reorganization of partnership under which composition of partners is changed. The change may result from increase or decrease in the number of partners. If Ahmed, Babar and Salim are partners in a firm and Salim deices to retire from it, dissolution of partnership will take place; now the firm will be reconstituted or reorganized between the two remaining partners, namely Ahmed and Babar. Conditions of Dissolution of Partnership
1. Admission of Partners If a new partner is admitted to the firm, the old partnership will have to be dissolved and new agreement is draw up to continue the business.
2. Retirement of a Partner In the case of retirement of a partnership the old partnership will have to be dissolved and new agreement is draw up to among the remaining partners to continue the business.
3. Insolvency of a Partner If a partner in a firm is adjudged bankrupt by the court of law, the partnership will turn dissolved. However, the remaining partner may decide to continue the business.
3. Insolvency of a Partner If a partner in a firm is adjudged bankrupt by the court of law, the partnership will turn dissolved. However, the remaining partner may decide to continue the business.
4. Insanity of Partner and Death of a Partner If a partner gets mad or insane the partnership stands dissolved. The death of a partner brings the partnership to the dissolution
5. A convict Partner When a partner is convicted of crime i.e. he is declared to be guilty by the court of law, the partnership will get dissolved.
6. Expiry of Period If the partnership were formed for a definite period of time it would bread up the expiry of that term.
7. Conclusion of venture Partnership may be formed to undertake a particular venture or project. Once the project is complete the partnership stands dissolved.
DISSOLUTION OF THE FIRM The dissolution of the firm means end to the partnership business. Conditions of Dissolution of the Firm
DISSOLUTION OF THE FIRM The dissolution of the firm means end to the partnership business. Conditions of Dissolution of the Firm
1. Illegality of Business A firm involve in illegal businesses firm will be dissolved.
2. Insolvency of all Partners Where all partners in a firm become bankrupt the firm becomes dissolved.
2. Insolvency of all Partners Where all partners in a firm become bankrupt the firm becomes dissolved.
3. Mutual Agreement Partnership is formed by mutual consent so the firms may also be dissolved if all partners agree.
4. Notice of Dissolution If the partnership exists at will for a certain period of time and continues beyond the stipulated period the firm will stand dissolved if a notice in writing is served by a partner to others showing his intention to dissolve. The dissolution date will be that mentioned in the notice.
--------------
check
this out
--------------
