Urgent - property owned by unregistered partnership firm
Jaya Pathak
(Querist) 14 June 2023
This query is : Resolved
A unregistered partnership firm had only 2 partners. One partner died in 2006. So as per Sec 42 of The Partnership Act this partnership firm dissolved in 2006. There is only one property in the partnership firm's name. So I have following queries:
1) Can the surviving partner sale this property now?
2) Does he require permission of the court to sale this property?
3) Can the surviving partner take the sale proceeds in the partnership firm's bank account? If not, then what should the surviving partner do now?
4) Any other important point the surviving partner should take into consideration.
Sudhir Kumar, Advocate
(Expert) 14 June 2023
It is believed successors of deceased partner have been given their dues. Please confirm?
kavksatyanarayana
(Expert) 14 June 2023
Out of 2 partners, one partner has died and the firm is deemed to be dissolved from the date of death of one partner. So the assets either movable or immovable should go to the legal heirs of the deceased partner under a notarized affidavit. They should specify in the affidavit that no properties are to be received and that we have no objection to the assets as of the date of the death of the deceased partner.
T. Kalaiselvan, Advocate
(Expert) 14 June 2023
All properties of a partnership are to be converted into money, and. Therefore, any immovable property which belonged to the undissolved firm loses such 'immovable' character. Such properties have a status of 'movable property' post-dissolution, from which the respective shares of the partners must go to them.
Mohd. Laiquiddin & Anr. v. Kamala Devi Misra By LRs & Others
The Supreme Court held that under the Partnership Act, property which is brought into the partnership by partners upon formation or which may be acquired in course of firm’s business, becomes partnership property and a partner is subject to contract between partners, entitled to a share in the money representing the value in the property upon the dissolution of the firm.
S. V. Chandra Pandian and Ors v. S. V. Sivalinga Nadar & Ors
The Supreme Court held that post-dissolution of firm each partner becomes entitled to his share in the profits of the firm post the settlement of accounts as per Section 48 of the Indian Partnership Act, 1932. The interest of the partners is in accordance with the proportion of their share in the firm.
Jaya Pathak
(Querist) 16 June 2023
Reply to Sudhir Kumar, Advocate Sir.
No dues have been settled till date. But the surviving partner wants to sale this property and do the full and final settlement of the share of the deceased partner to his legal heirs.
Jaya Pathak
(Querist) 16 June 2023
Reply to T. Kalaiselvan, Advocate Sir.
To which bank account should the money from sale of this property be taken into, Partnership's Current Account or a separate bank account should be opened?
kavksatyanarayana
(Expert) 16 June 2023
Which account is being maintained by the Firm till the date of the death of the one partner, this amount also be deposited in that account.
Jaya Pathak
(Querist) 16 June 2023
Reply to kavksatyanarayana Sir
The Current account is maintained which had joint signatory of both partners but now will the bank allow to to operate that bank account if one partner is expired?
kavksatyanarayana
(Expert) 16 June 2023
Yes if you produce the death certificate of the deceased partner and the NOC of the legal heirs of the deceased partner.
