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anil das   15 January 2024

Indian partnership act - partnership deed-dissolution at partners will

Dear sirs, 

My self anil, from Kerala.  I started a business in 2016 in partnership with my cousin and the business is making loss all these years, so I wanted to terminate the partnership. I wish to know the interpretation of below termination clause on which my partnership deed made and registered (only 2 partners in).  The land, factory building and all licenses are under my name.  The land and plant is mortgaged, which is on the verge of attachment.  He made only nominal investment and contributed towards repayment of bank.  We are into dispute and being the managing partner, shall i send a notice to terminate the partnership? In such case what is his right of claim?

"The partnership shall commence Twenty First Day of March 2016 and shall be liable to be terminated at the will of the partners"  

Thanking you and look forward for a resonse. 



Learning

 3 Replies

T. Kalaiselvan, Advocate (Advocate)     15 January 2024

The properties seem to be under your name and not on the company's name, hence it will not become company's assets. 

Dissolution by notice of partnership at will.

43. (1) Where 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.

(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice.

As per section 40 of the partnership act, Partners can also dissolve the partnership based on a contract that has already been made.

A form of partnership that arises where the partnership has been entered into for an undefined term. A partnership at will may be dissolved at any time by a partner serving notice on the other partner(s).

You may proceed following the procedures of law with the assistance of an advocate or a chartered accountant

 

lying lichen   17 January 2024

The properties appear to be in your name and not the firm's name, thus they will not become corporate assets.

https://www.lawyersclubindia.com/forum/bank-geometry dash online-recovery-from-guarantor-232586.asp

anjali tamrkar   17 January 2024

As per the query 
If you want to terminate the partnership As per the section 43 of the Indian partnership Act  which states that 
“DISSOLUTION BY NOTICE OF PARTNERSHIP AT WILL” 
(1) Where 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. 
(2) The firm is dissolved as from the date mentioned in the notice as the date of 
dissolution or, if no date is so mentioned, as from the date of the communication of 
the notice. 
So the section clearly states that the notice must be sent if one of the partner want to terminate the deed 
Rights of the claiming partner.
1.    Right to express opinions: Another one of the rights of partners is their right to freely express their opinion. Partners, by a majority, can determine differences with respect to ordinary matters connected with the business. Each partner can express his opinion to decide such matters.
2.    Right to be indemnified: Partners can make some payments and incur liabilities through their decisions in the course of their business. They can claim indemnity from each other for these decisions. Such decisions must be taken in situations of emergency and should be of such nature that an ordinarily prudent person would resort to under similar conditions.
3.    Right to interest on capital and advances: Partners generally do not get an interest on the capital they contribute. In case they decide to take an interest, such payment must be made only out of profits. They can, however, receive interest of 6% p.a. for other advances made subsequently towards the business.


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