The Act also provides that a partnership firm
may be dissolved under the following circumstances namely,
result of any agreement between all the partner
of all the partners or all partners but one as insolvent, or
happening of an event which makes it unlawful for the business of the firm to
be carried on in partnership or
to agreement between the parties,
on the happening of any of the following
events such as -
of the adventure,
a partner, and
of a partner.
In these last four cases the partnership
agreement may provide whether the firm will be dissolved or not on the
happening of any of the four events. Even if the deed provides that the
partnership will not be dissolved on the death or insolvency of a partner, it
does not mean that on the death or insolvency of a partner he ceases to have
interest in the partnership property. In such case his interest in the
partnership property will survive to his heirs in case of his death and to his
assignees in case of insolvency. In the absence of a term in the deed of
partnership to that effect, it cannot be that, the partnership shall continue,
and notwithstanding the death of a partner it will operate to extinguish his
proprietary rights in the assets of the Firm.
A partnership can also be dissolved by the
Court under the circumstances mentioned in section 44 of the Act. Where the
partnership is 'at will' the partnership can be dissolved by any partner
or partners giving notice of his/their intention to dissolve the firm.
Types of partnership
The result of this summary of the Act is that
a partnership is generally created by agreement between the partners. A
partnership can be formed between
more Individuals or
an Individual and a person representing a H.U.F. or
an Individual and other partner representing his firm, or
two partnership firms or
a Limited Company or a Corporation and an Individual or partnership firm
a partnership and a H.U.F.
members of HUF in their individual and independent capacity
a HUF and a member of that HUF independently.
Partnership under Companies Act
Section 4 of the Companies Act, 1956,
provides that the number of partners in a firm shall not exceed 20, and a
partnership having more than 20 persons will be illegal.
When there is partnership between two firms
all the partners of each firm will he taken into account for the purpose of
this provision but if a partnership is between the Karta or any member of HUF
on the one hand and another individual or Individuals on the other, the members
of the joint family will not be taken into account. A Hindu Undivided family
carrying on business as such, not being a partnership, S 11 of the Companies
Act will not apply even if the members of that family are more than 20. But
where two or more Hindu Undivided families are carrying on business in
partnership the number of the members of those families except minors will be
taken into account for the purpose of S. 11 of the Companies Act.