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pls teach me abt dissolution of a firm
Dissolution of a firm.

According to Section 39 of the Indian Partnership Act, 1932 dissolution of partnership between all the partners of a firm is called the 'the dissolution of the firm'.
It refers to the winding up of the business in partnership. It involves complete break-down of relations among all the partners and is dissolution of partnership between all the partners of a firm. The business is to be discontinued, it requires realisation of assets and settlement of liabilities. Dissolution of firm takes place in the following cases:

Dissolution by Agreement
(i) All the partners give consent to it; or
(ii) As per the terms of partnership agreement.

Compulsory Dissolution
(i) Where all the partners or all except one partner, become insolvent or insane rendering them incompetent to sign a contract; or
(ii) When the business of the firm becomes illegal; or
(iii) When some event has taken place which makes it unlawful for the partner to carry on the business of the firm in partnership.

Dissolution on the happening of certain contingencies
(i) Subject to contract between partners, a firm is dissolved:
(i) if constituted for a fixed term; or
(ii) if constituted to carryout one or more ventures, by the completion thereof; or
(iii) where all the partners except one decide to retire from the firm; or
(iv) where all the partners or all except one partner dies; or
(v) by the adjudication of a partner as an insolvent.

Dissolution by Notice
In case of partnership at will, the firm may be dissolved if any of the partners give a notice in writing to the other partners signifying his intention of seeking dissolution of the firm.

Dissolution by Court (Under Sec.44)
At the suit of a partner, the court may order for dissolution of partnership firm on any of the following grounds:
(i) If a partner becomes insane; or
(ii) When a partner becomes permanently incapable of performing his duties as a partner; or
(iii) When a partner is guilty of misconduct which is likely to adversely affect the business of the firm; or
(iv) When a partner deliberately and consistently commits breach of agreements relating to the management of the firm; or
(v) When the partner transfer whole of his interest in the firm to the third party; or
(vi) When the business of the firm cannot be carried on, except at a loss; or
(vii) When the court, on any ground, regards dissolution to be just and equitable.



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