Formal resignation via registered post or letter issued from firm that you resigned from the firm is sufficient.
Dissolution itself a proof of no more partner. Keep the copy of deed. Notory is fine but have to inform the registrar.
What is the right way to leave a partnership firm?
There was a firm registered in 1990 in Goindwal Punjab. In 1992, I joined this firm as partner. We did a partnership deed on stamp paper at that time. Then, in 1993 I left the firm without any written documentation and gave power of attorney to other partner (brother) to continue with the business. There was some loans on this firm and its plot (land) from PNB bank and Punjab Finance Corporation. Other partner continued with the firm for next few years but then due to a fire incident happened at factory its operation got halted. Now after so many years, the other partner wants to again start the firm. He wants to dissolve the partnership deed and keep all the assets such as plot with him. I don't have any issue with it. My question is, what is the right way to leave such partnership firm to avoid any legal issues in future. Is a dissolution deed written with e-stamp paper and signed by notary is sufficient for it? I currently don't know the status of previous loans and insurance claims. The partner has written in dissolution deed that he takes responsibility of all old and new liabilities. Do I need to get this dissolution deed to be registered in any government office? Please advice. Thanks in advance.
Asked 2 months ago in Business Law
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Thanks for the reply. I have copy of dissolution deed on Rs. 50 /- e-stamp paper signed by notary. Please answer following questions: 1. What is correct way to inform the registrar in Punjab? I tried to search the it's office address on Google but didn't found any. 2. Do I need to inform any other department such Punjab Finance Cooperation or PNB? If yes, then what's the legal procedure for that. 3. Can we have dissolution of partnership in back date? Like I left the firm in 1993. Or it will be on present date only?
Asked 2 months ago
Where the deed was registered ?
No
Yes
firm is dissolved, every partner is required to give written notice duly signed by all the partners to the Registrar within 90 days from the date of dissolution.
deed of dissolution of firm can be entered into by the partners
Written notice means a simple letter written to Registrar or is there a specific format for it? If there is a format for it, please provide that. Also, registrar means Tehsildar of district?
Asked 2 months ago
Just register the dissolution deed.
Registrar means registrar of firms
engage a local lawyer for drafting deed of dissolution or f firm
Thanks for the answers. Dissolution deed is already signed by both the partners and two witness. It is also notarized. Now, please tell me how to register it with Registrar of Firms? Can we send dissolution copy with letter through registered post through registrar? Or I and other partner and witness need to visit the office in Chandigarh (Registrar Of Firms & Societies https://g.co/kgs/Re2F7Lv) and fill some kind of form there or what kind of procedure to follow. Please advise. Thanks.
Asked 2 months ago
Visit the office of registrar of firms personally with all the partners
- Section 40 of the Indian Partnership Act, allows the dissolution of the firm if all the partners agree to dissolve the firm after entering into an agreement.
- Since, the said firm is registered then it can be dissolved after executing a Dissolution deed.
- You can visit the office of the Registrar of Firms with the dissolution deed to register it.
- Further, as the said firm is registered then there must be given the address of the registrar.
Dear Sir,
It seems yours is a unregistered partnership as such legal dissolution is not necessary. It is better to enter into agreement mutually and keep one original copy with each of you in respect of dissolution. Further take steps to intimate to the all public authorities like income tax departments, GST Department etc about dissolution of partnership.
A partnership firm can be dissolved by an agreement or with the approval of all partners.
Dissolving a partnership firm involves:
A partnership firm can be dissolved by giving written notice to all partners.
Dissolving a partnership firm involves:
Stopping all commercial activities under the partnership firm's name.
Settling all liabilities by selling assets or transferring them to a partner.
Settling all accounts with the partnership firm
Sharing profits and losses according to the partnership agreement.
You may decide to dissolve the firm by mutually agreed conditions, there is no necessity to approach the ROC for this purpose since it is an unregistered firm.
it is not mandatory to inform the registrar of firms about the dissolution of an unregistered partnership firm in Punjab, India.
A court can only dissolve a firm that is registered with the Registrar of Firms.
An unregistered partnership firm cannot be dissolved by the court.
The consequences of non-registration of partnership firm include that the firm or partner has no right to legally sue another partner or the firm. a case against the third parties cannot be filed,
yours is an unregistered partnership firm hence your notice or an application to dissolve the unregistered partnership firm will not be entertained by the registrar of firms, hence you may not resort to any such activity under any misguidance, you may take the help of an expert lawyer who has expertise in this field.
the dissolution of an unregistered partnership firm cannot be registered with the Registrar of Firms in India
An unregistered partnership deed is valid, but it cannot be used as evidence in court, and partners cannot claim tax benefits or deductions under the Income Tax Act
A partnership can be dissolved by mutual consent or an agreement between all partners.
A firm can be dissolved if it is forced to do so due to certain circumstances.
If the partnership deed is in writing but not registered with the Registrar of Firms, it is considered an unregistered partnership deed..
The easiest and the most hassle-free method to dissolve a partnership firm is by mutual consent or an agreement. A partnership firm may be discontinued with the approval of all the partners or by a contract between the partners. A partnership is formed by a contract and may be terminated using a contract itself.
1) deed of dissolution would be of present date
2) you have to inform the bankers of firm about the dissolution of firm
3) contact a local lawyer regarding address of registrar of firm
Dear Client,
As per your instructions, there is some legal issue you want me to provide you with information how to leave the partnership firm legally so that there is no legal issue in future. Here is the specific approach as prescribed by the Indian laws.
First of all, you should prepare a dissolution deed which will state the terms for dissolution and division of assets and liabilities. Above deed should be made on the e-stamp paper and both partners should attach their signatures. It is important that the deed shows that you are releasing all rights in relation to the firm’s property and that the remaining partner shall take responsibility for all debts such as loans and insurance losses. The deed too should, be notarized to prove its legitimacy. Secondly, the registration of the above dissolution deed with the local registrar of firms is not compulsory, but is recommended. It also adds more legal credibility to the document and makes sure that the dissolution is lawful and recognized. Subsequently, inform all related parties of the dissolution of the firm including the bank and the Punjab Finance Corporation. This is useful in recording updates as well as clearing the air that the remaining partner is liable for any owed amounts. Furthermore, to further support the action of dissolving the co-operative, it will be wise to seek a no-objection certificate from the said financial institutions to affirm that they admit the dissolution and that all the outstanding dues have been realized or assigned in terms of the deed.
In conclusion the following steps should taken when one wants to legalize the termination of the partnership; the termination should be in writing in a dissolution deed, the deed should be notarized and possibly registered, and all the necessary authorities should be notified. It is also recommended to seek a lawyer’s advice to determine whether all the right procedures are being taken.
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