Reconstitution and Dissolution of a partnership

2036 WordsMar 26, 20139 Pages
RECONSTITUTION AND DISSOLUTION OF A PARTNERSHIP ABSTRACT: The paper aims to study using secondary research resources. That what are concepts of Partnership reconstitution and dissolution according to the partnership act 1932. Under what circumstances a partnership firm is entitled to these two concepts respectively, what are the rights, duties and liabilities of each of the partners involved under each case. And according to what modes can the accounts be settled among the partners upon the winding up of the business. � INTRODUCTION "Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all (THE PARTNERSHIP ACT 1932) Partnership' does not mean a…show more content…
Reconstitution of a partnership of a firm will take place in the events of retirement of a partner, death of a partner or insolvency of a partner. Thus firm has to be reconstituted with the remaining partners of the firm. Now they will deal with the business with a new partnership contract between them. Even in this case firm may continue to work provided the deed signed has such effect. Also when a new partner is admitted, a new partnership emerges so a firm is reconstituted. There will be a new contract between the new partners and the old relationship is no more valid. Each will have a different share of profits as per the new contract signed. Reconstitution involves only a change in the relationship of the partners of a business but in the case of dissolution of the firm there is a complete discontinuation in the relationship of the partners of a firm. Dissolution of a partnership can be dome under circumstances not just voluntarily. It can be dissolved under a mutual agreement when all partners agree to it and it is in accordance to the contract. It can be dissolved by giving a legal notice and under law. When there is a breach of terms and conditions by one partner than partnership can be dissolved. Also when the court gives out a notice it has to be dissolves. (MATHUR, 2010) Dissolution of partnership cannot just be said nor done as it have its own consequences. When it is discontinues than the partners are liable to wind up the business and the
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