it is settled law that ordinarily on the death of a partner, the partnership firm is automatically dissolved vide section 42 of the Indian Partnership Act. The only exception is where in the partnership deed it is mentioned that on death of a partner the firm will not dissolve. In this case there is nothing to show that there is any mention in the partnership deed that the firm shall not automatically dissolve on the death of a partner.”

2)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. A retiring partner, however, continues to be liable to third parties even if the liability is taken over by the remaining partners (S 32). Therefore in a deed of retirement it is necessary to provide that in the event of the retiring partner being held liable by a third party, the remaining partners shall indemnify him to that extent, when the liabilities are taken over by the remaining partners. Insolvency of a partner also causes compulsory retirement of an insolvent partner (S. 35).

3) it is necessary to peruse partnership deed to advice further 

If you registered a partnership based on the last 30 years of data, then you will have to pay a fine to the government, and the cost will be huge.

It is better to get a settlement amicably between partners in this current situation.

 If there are only two partners, and one of the partner dies, the partnership firm will automatically dissolve. If there are more than two partners, other partners may continue to run the firm.

Being subject to contract between the partners, a partnership deed can provide for a safeguard against the dissolution of the partnership on the happening of the said contingency. A clause in the partnership deed categorically stating that the death or insolvency shall not result the firm into dissolution, would provide for a safeguard against the dissolution of the partnership firm

Therefore the firm may not be treated as defunct. 

n a lot of cases, the surviving partner decides to continue the business or buy the shares of the deceased partner later. The legal representatives would receive whatever the profits of that person’s firms were.

The partnership firm cannot hold property in its name. It must be in the names of all partners or the authorised partner as per the partnership deed

The firm  can only sell the assets to realize the amount, pay the liabilities of the firm and discharge the claims of the partners.

if the same partners are there then you can continue your partnership. It’s better you register the same for better legal rights 

It is not mentioned in which name the property was purchased and registered 30 years previously. If it was in the joint names of some partners who had started the partnership then, they all can join together and sell the property now as individuals. If it was in the name of the unregistered firm, sale would pose legal hurdles - proof of identity, proof of business address, proof of authorised signatories etc. It is also not mentioned whether the accounts of the firm have been drawn up and audited for every financial year since the original constitution of the firm. Also the fact whether the firm owes any debt is not mentioned.

Hi

We need to check whether the partnership deed states that the partnership will survive in the event of the death of a partner. if the partnership deed states that the partnership will survive upon death of a partner, then you need not worry. 

Also, in your case, 1 partner has resigned and 1 partner has been substituted, but however the same is not documented.

So, you need to make a settlement  with 

a) Surviving partners

b) Legal heirs of deceased partners 

by way of a registered settlement deed and based on the registered settlement deed, the partners mentioned in the settlement deed can take appropriate action (i.e. all partners jointly selling the property or One Partner buying out the other partners and transferring the property in his name etc.).

Since the matter is about a property registered 30 years ago and much time has passed, it is better for you to consult a Bangalore based lawyer with a copy of the partnership deed and copy of the title deed of the property purchased in the name of the partnership firm. 

Hope this helps.

Dear client,

The status of your partnership firm might be affected by several factors. Despite no active operations, your partnership might still be considered active unless formally dissolved or reconstituted according to the law. If you have a partnership deed, review its provisions regarding changes in partners, dissolution, and reconstitution. It should guide you on the procedures to follow in such cases. Even though you didn’t create reconstitution deeds, any changes in partners should ideally be documented to clarify ownership shares and liabilities. This lack of documentation might complicate things, but it's important to establish clarity. Ensure that the addition of a new partner is acknowledged and documented formally. This could include drafting a new partnership agreement or reconstituting the partnership to reflect the current partners' status. Since your partnership is unregistered, you might want to consider registering it now. Contact the Registrar of Firms to understand the process and comply with registration requirements. Ensure all tax and legal compliance requirements are met. This includes filing taxes, maintaining accounts, and adhering to any other legal obligations in your jurisdiction. Depending on the circumstances and your future plans for the partnership, you might need to consider either dissolving the partnership or formally reconstituting it with proper documentation and adherence to legal procedures.

Selling the property owned by your partnership firm might involve legal considerations, especially considering the complexities in the partnership structure and lack of formal documentation. Determine the ownership shares of each partner in the property. This might be based on initial contributions or subsequent agreements, even if not formally documented. Selling the property would typically require the consent of all partners, especially in the absence of a clear partnership agreement specifying the procedure for such actions. Partners might need to authorize specific individuals within the partnership to act on behalf of the firm in the sale of the property.

You can reach out to us for further assistance