DEATH OF A PARTNER
SREEKUMAR
(Querist) 19 August 2009
This query is : Resolved
There are 5 partners in a firm which is closely held by family consisting of father & sons. Whehter death of the father dissolve the firm?
A V Vishal
(Expert) 19 August 2009
If it is a partnership firm, then no.
Further Under the Partnership Act, 1932, The Act provides that a partnership firm may be dissolved under the following circumstances namely,
as a result of any agreement between all the partners
by adjudication of all the partners or all partners but one as insolvent, or
by the happening of an event which makes it unlawful for the business of the firm to be carried on in partnership or
subject to agreement between the parties,
on the happening of any of the following events such as -
efflux of time,
completion of the adventure,
death of a partner, and
insolvency of a partner.
In these last four cases the partnership agreement may provide whether the firm will be dissolved or not on the happening of any of the four events. Even if the deed provides that the partnership will not be dissolved on the death or insolvency of a partner, it does not mean that on the death or insolvency of a partner he ceases to have interest in the partnership property. In such case his interest in the partnership property will survive to his heirs in case of his death and to his assignees in case of insolvency. In the absence of a term in the deed of partnership to that effect, it cannot be that, the partnership shall continue, and notwithstanding the death of a partner it will operate to extinguish his proprietary rights in the assets of the Firm.
G. ARAVINTHAN
(Expert) 20 August 2009
Firm goes only be a dissolution deed.
The other partners can run the firm after entering into a new partnership deed stating the death of the partner and so on
