Dissolution of Partnership Firm

1. According to Section 39 of the Indian Partnership Act, 1932 the dissolution of partnership between all partners of a firm, is called Dissolution of the Firm.
2. It is a complete breakdown of the relation of partnership between all the partners.
3. The modes of Dissolution of the Firm are as under –
   1. Dissolution of the Firm Without the Order of the Court
   2. Dissolution of the Firm With the Order of the Court
4. A firm may be dissolved without the Order of the Court in the following ways –
   1. Dissolution by Agreement (S. 40)
   2. Compulsory Dissolution (S. 41)
      1. By insolvency of partners.
      2. By happening of any event which makes the business of the firm illegal/unlawful
   3. .Dissolution on the happening of certain contingency (S. 42)
      1. On the expiry of the term of Partnership Firm
      2. On completion of the undertakings
      3. On the death of Partner
      4. Adjudication of Partner as Insolvent
   4. Dissolution by Notice of Partnership at Will (S. 43)
5. A firm may be dissolved by the Order of the Court in the following circumstances. Section 44 of the Indian Partnership Act, 1932 deal with the same.
   1. Unsound Mind [S. 44 (a)]
   2. Permanent incapacity [S. 44(b)]
   3. Misconduct [S. 44 (c)]
   4. Persistent Commission of a Breach of Agreement [S. 44 (d)]
   5. Transfer of Interest [S. 44 (e)]
   6. Business at Loss [S. 44 (f)]
   7. Any other Ground [S. 44 (g)]

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