Names of group members

Minal . A . Tembhare – 157.

Mayur . M . Rawool – 141.
Guruprasad . S . Pednekar – 128.
Shreya . R . Yadav – 165.
Renuka . Mundhe – 109.
Mangesh . Yadav – 164.
 Meaning of Firm.
• A firm usually denotes a ‘Partnership firm’.

•A partnership firm is a commercial organisation

which is a result of an agreement.

•It is an organisation wherein minimum 2 member s

are required .
•The maximum number of member can
extend up to 20.

•This rule does not apply in case of banking

business where maximum number is only 10.

•Like every other commercial organisation, a

partnership firm should be lawful and socially
desirable .
 DISSOLUTION OF A FIRM.
• The termination of the contractual
Relationship in case of partnership is called
dissolution.

• Dissolution can mean ‘Dissolution of the

firm’ or ‘dissolution of partnership’.

• Dissolution of the firm means complete

breakdown of all relations among partners.
• Dissolution of partnership means the
relationship between the partners ends but
firm continuous.

•Dissolution of the firm implies dissolution of

the partnership.

• But dissolution of partnership does not

necessarily involve dissolution of the firm.
Modes of dissolution.
Voluntary dissolution.
• DISSOLUTION BY CONSENT.
When all partner may consent for dissolution it is
called dissolution of firm by consent.

• DISSOLUTION BY NOTICE.
When a partnership is at will any partner can give
notice for dissolution this is dissolution by notice

• DISSOLUTION BY AGREEMENT.
When a firm is dissolved in accordance with a
contract it is dissolution by agreement.
 DISSOLULTION BY
OPERATION OF LAW.
 COMPULSORY
DISSOLUTION.
By insolvency:
When all partners of the firm become insolvent the firm
dissolves .
Partnership becoming unlawful:
Some times an event happens that makes the business
of the firm unlawful leading to dissolution .
Event making business unlawful,if carried on in
partnership :
Some times business may be lawful but carrying on in
partnership makes it unlawful leading to dissolution.
 Dissolution on happening of
certain contingencies.
1. Expiry of the term for which the firm was constituted.

2. On completion of the venture.

3. On death of partner.

4. On insolvency of a partner.
 DISSOLUTION BY
INTERVENTION OF COURT.
 DISSOLUTION BY
INTERVENTION OF COURT.
1. Insanity of partner:
Insanity of partner leads to dissolution by
court.

2. Incapacity:
Permanent incapability of partner also leads
to dissolution by court.
 3. MISCONDUCT:
CERTAIN MISCONDUCT ON PART OF THE PARTNERS OTHER THAN THE
3. Misconduct :SUING PARTNER LEADS TO DISSOLUTION BY COURT.

When the partners are guilty of misconduct

4. WILLFUL BREACH OF AGREEMENT:
other than the the suing partner,the
IN CASE A PARTNER WILFULLY COMMITS BREACH OFcourt
AGREEMENT
may order for dissolution.
THE OTHER PARTNERS CAN APPROACH THE COURT FOR
DISSOLUTION.

4. Willful breach of agreement :

When partners commit breach of
agreement wilfully,the court may order for
dissolution.
 5. LOSSES:
WHEN THE BUSINESS OF A FIRM CAN NOT BE CARRIED ON EXCEPT
5. Transfer of interest :
LOSSES THE COURT MAY ORDER FOR DISSOLUTION.

Sometimes a partner may transfer a part or

6. TRANSFER OF INTEREST:
whole of hisA PARTNER
SOMETIMES interest/shares
MAY TRANSFERtoHISa third TO A THIRD
INTEREST
PARTY IN SUCH CASE THE PARTNERS MAY APPROACH THE COURT
person for this the other partnersFOR can
DISSOLUTION.
approach the court for dissolution.

6. Losses :
When the business of a firm can not be
carried on except for losses the court may
order for disssolution.
 DISADVANTAGES OF
DISSOLUTION.
•Unemployment:
Dissolution of a firm leads to
unemployment of the staff members
working for the firm.

• Bad corporate image:

When a firm is dissolved it leads to bad
corporate image specially in case of
treachery.
3. Payment to creditors:
After dissolution of the firm the creditors
demand their loans as quickly as possible
for which the partners may have to sell off
their assets.

4. Deviation among partners:

Due to dissolution the partners may not
want to continue any venture in future
leading to deviation of paths.
 PUBLIC NOTICE:
When a partnership firm is dissolved, the
creditors and third parties who have done
business with the old firm may not be
aware of the firm’s dissolution and maybe
in danger of being cheated by the firm. For
the protection of such third parties a notice
has to be published to create awareness of
dissolution. Such notice is called ‘Public
notice’.
 Circumstances when a
public notice is required to
be given.
• On retirement /expulsion of an active
partner.
• On dissolution of the firm.
• On the election to become or not become
a partner ,by a minor on attaining age of
maturity.
MODES OF GIVING PUBLIC
NOTICE .
 IN CASE OF REGISTERED
FIRMS.
1. Publication in the official gazette.

2. Notice to registrar of firms.

3. By publication in at least one vernacular

news paper.
 IN CASE OF UNREGISTERED
FIRM.
1. Publication in the official gazette.

2. By publication in atleast one

vernacular newspaper.
 CONSEQUENCES OF NOT
GIVING PUBLIC NOTICE.
•In case of retirement and expulsion of
partner he shall continue to be liable to the
creditors for acts of the firm.

• In case of dissolution of firm all the

partners would continue to be liable to the
third parties for the acts of the firm.
 Distribution of assets.

After the dissolution of partnership the

partner’s share in the assets remaining
after payment of debts to creditors,is
allocated to the respective partners.
 Liabilities of partners on
dissolution.
The partners are liable for payment of all the
loans taken from creditors like banks, financial
institutes, etc. On non-payment of such debts
the partners’ personal assets are in danger of
being taken over by the creditors as the partners
are liable for all the debts of the firm as the firm
does not have a legal entity i.e.there is no
difference between the partners and the
partnership firm.
Thank
you.