Difference between terms

Querist : Anonymous (Querist) 17 October 2011 This query is : Resolved
What is the difference between retiring from partnership and dissolving a partnership. Under which condition a partner can retire and under which condition a partnership can be dissolved.

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Sankaranarayanan (Expert) 17 October 2011
Any partner may. with the consent of all the other partners or in terms of the deed of partnership where the partnership is at will, by giving notice in writing to all other partners, to that effect, dissolve the partnership or retire from partnership
When the relation between all the partners of the firm comes to an end, this is called dissolution of the firm.

dissolution-of-partnershipDissolution of partnership is different from the dissolution of firm. When any of the partners dies, retires or become insolvent but if the remaining partners still agree to continue the business of the partnership firm, then it is dissolution of partnership not the dissolution of firm. Dissolution of partnership changes the mutual relations of the partners. But in case of dissolution of firm, all the relations and the business of the firm comes to an end.

Modes of Dissolution:- A firm may be dissolved in any of the following ways:-

1. By Consent:- A partnership firm can be dissolved any time with the consent of all the partners whether the partnership is at will or for a fixed duration.

2. By Agreement:- A partnership can be dissolved in accordance with the terms of the Partnership Deed or of the separate agreement.

3. Compulsory Dissolution:- In case, any of the following events take place then it becomes compulsory for the firm to dissolute: -
(i) Insolvency of Partners:- In case all the partners or all the partners except one become insolvent.
(ii) Unlawful Business:- In case the firm’s business become unlawful on the happening of a subsequent event. e.g. trading with alien country.

prabhakar singh (Expert) 17 October 2011
There can not be two view on this topic.

Sailesh Kumar Shah (Expert) 17 October 2011
Shri Sankar Narayanan has left no room to add further.

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