Business Registrations
How to Reopen or Restore a Struck-Off Private Limited Company in India
Imagine you registered a private limited company a few years ago, but it was stricken off the records due to paperwork or commercial slowdown.
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Dissolve a Partnership Firm
When the purpose is met, or the partners decide to end it, the firm has to be wound up properly: assets sold, liabilities paid, and every partner’s claim discharged. That is what a dissolution deed settles.
- Dissolution deed drafted by experts
- Affidavit and indemnity bond drafted for execution
- Settlement of accounts between the partners covered in the deed
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- Notification to the Registrar of Firms, where the firm is registered
- No court, no liquidator, where the partners agree
- A dedicated relationship manager from start to finish
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Dissolving a partnership firm
What dissolution actually involves, the two ways it happens, and why firms choose LegalWiz.in to draft the deed.
A partnership firm is a business entity formed with the sole purpose of profit from business: two or more parties come together under a formal agreement, the partnership deed, to own and manage it. Once that purpose is met, or the partners decide to put an end to the partnership, it has to be dissolved and the partnership comes to an end.
On dissolution the business of the firm ceases to exist, because its affairs are wound up: the assets are sold, the liabilities are paid, and the claims of the partners are discharged. The dissolution of the partnership among all the partners of a firm is what is called the dissolution of the firm, and it is usually done through a dissolution agreement between the partners.
That is worth distinguishing from the dissolution of a partnership, which is what happens when a single partner ceases to be associated with the business. The dissolution of the firm is the winding up of the business itself.
- Usual route
- By agreement
- A dissolution deed between the partners
- Executed by
- All the partners
- Signing to confirm the dissolution
- Court involved
- Only if sued
- Where a partner sues the others
- Court route needs
- A registered firm
- A court cannot dissolve an unregistered one
- Registrar of Firms
- If registered
- The dissolution is notified only where the firm is
- Partners’ liability
- Until public notice
- For acts done before the dissolution
- Turnaround
- 20 working days
- For the deed and its execution
Why firms choose LegalWiz.in
- An expert team of qualified CA, CS and lawyers
- A dedicated relationship manager with on-call support
- The entire dissolution is handled online
- Quick turnaround and economical pricing
- Thousands of happy customers across every state in India
- Backed by secure technology
What the dissolution covers
Your relationship manager and the drafting team handle everything below. You supply the documents once and execute the deed.
- Review of the details and documents furnished
- Drafting of the dissolution agreement
- Drafting of the affidavit, the indemnity bond and the other documents
- Preparation of the other necessary documents
- Execution of the dissolution agreement between the partners
- Notification of the dissolution to the Registrar of Firms, where the firm is registered
Stamp duty and notary charges are at actuals. A partnership firm is not registered with the MCA, so unlike a company or an LLP there is no strike-off application and no government processing period to wait on. The dissolution is complete when the deed is.
What the dissolution deed settles
The dates and the wind-up
The date on which the partnership ceases trading and is dissolved, and how it will be wound up. What the partners may and may not do between those two dates.
Assets, contracts and liabilities
The return of documents, the realisation of the partnership’s assets, the termination of contracts and the other arrangements for discharging its liabilities.
The final accounts
The preparation and approval of the partnership’s final set of accounts, and the distribution of any money left after the liabilities have been discharged.
Records and notice
The retention of the firm’s records, and the notification of the dissolution, which is what ends a partner’s liability to third parties.
The two ways a firm is dissolved
Almost every dissolution is the second. The first is what happens when the partners cannot agree.
Without the intervention of a court
Usually partnership firms are dissolved through a dissolution agreement between the partners. All the partners come together and sign an agreement confirming the dissolution and mutually settling every pending liability and account between them, so no third party is involved. It can also be dissolved by a written notice of dissolution sent by one partner to all the others.
With the intervention of a court
Where a dissolution is initiated by one partner suing the others, the courts get involved. A court can only dissolve a firm that is registered with the Registrar of Firms: an unregistered firm cannot be dissolved by a court at all.
With a court, or without one
Almost every dissolution is by agreement. Open any row to read the detail behind both answers.
| Attribute | By agreement | Through a court |
|---|---|---|
| Which route applies | ||
| The partners agreeAll the partners come together and sign an agreement confirming the dissolution. It can also start with a written notice of dissolution sent by one partner to all the others. | A partner suesThe courts get involved when a dissolution is initiated by one partner suing the others. | |
| Any firmRegistered or not, the dissolution is a matter between the partners. | Registered firms onlyA court can dissolve a firm only where it is registered with the Registrar of Firms. An unregistered partnership firm cannot be dissolved by a court. | |
| The venture has endedThe term of the partnership has expired, the task it was created for is finished, a partner has become insolvent, a partner has died or resigned, or unlawful business has been carried on in the firm’s name by one of the partners. | Conduct or incapacityA partner has become incapable of carrying out their duties through incapacity or unsoundness of mind, is guilty of misconduct that can harm the business, or has repeatedly breached the partnership agreement. | |
| What it involves | ||
| NoneThe partners mutually settle all the pending liabilities and accounts between themselves, so no third-party intervention is needed. | The courtThe court intervenes and helps the partnership to be dissolved legally. | |
| A dissolution deedIt sets the date the partnership ceases trading, how it is wound up, what the partners may do in between, the realisation of assets, the discharge of liabilities, the final accounts, the distribution of what is left, the retention of records and the notification of the dissolution. | A court orderThe winding up that follows covers the same ground, settling liabilities, realising assets and distributing the surplus, under the court’s direction. | |
| Next step | Get started | |
Swipe the table sideways, By agreement stays in view. Open any attribute to read the detail behind both answers.
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Documents required to wind up a partnership firm
Most of this is about the firm’s books and its obligations. Everything else is drafted for you.
PAN card
The PAN of every partner and of the firm, as identity proof.
Partnership deed
The original partnership deed and every modified version of it.
Address proof of the firm
Where the registered office is rented, the rent agreement and one utility bill for electricity, water, property tax or gas, together with a no objection certificate from the landlord.
Accounting information
The financial statement of the partnership firm.
Legal liabilities
A statement of any pending litigation involving the partnership firm.
List of secured creditors
A list of the secured creditors of the firm, where it has any.
Dissolve your partnership in three easy steps
Step 01
Answer a few quick questions
- Spend less than 10 minutes on a simple set of questions
- Share the basic details and documents required for the dissolution
- Pay through a secure payment gateway
Step 02
Our experts take over
- You are assigned a dedicated relationship manager
- The dissolution deed is drafted and reviewed with you
- The affidavit and indemnity bond are drafted for execution
- The dissolution is notified to the Registrar of Firms, where the firm is registered
Step 03
Your firm is dissolved
- The whole process takes 20 working days
- The partnership ends on the date the executed deed provides
How long the dissolution takes
Twenty working days. There is no MCA filing to wait on, so the schedule ends when the deed is executed.
Days 1 to 2
2 of 20 working days
- Discussion and collection of basic information
- You provide the required documents
Days 3 to 8
6 of 20 working days
- Review of the details and documents furnished
- Drafting of the dissolution agreement
- Drafting of the affidavit, indemnity bond and other documents
- You return the executed affidavit, indemnity bond and signed documents
Days 9 to 20
12 of 20 working days
- Execution of the dissolution agreement
- Notification to the Registrar of Firms, where the firm is registered
Where the firm is registered with the Registrar of Firms, the dissolution is notified there after the deed is executed.
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What is the difference between the dissolution date and the winding up date?
The dissolution date is the date the partnership ceases to exist. After it there is no business relationship between the partners.
The partners then complete any unfinished work, settle the liabilities, realise the partnership assets and otherwise wind the partnership up. The winding up date is the date on which that is completed.
What does the dissolution deed of a partnership firm cover?
Seven things:
- The date on which the partnership will cease trading and be dissolved, and how it will be wound up
- What the partners can and cannot do from the date of dissolution until the partnership is wound up
- The return of documents, the realisation of the partnership’s assets and the termination of contracts and other arrangements for discharging its liabilities
- The preparation and approval of the partnership’s final set of accounts
- The distribution of any partnership monies after the liabilities have been discharged
- The retention of records
- The notification of the dissolution
How are the accounts settled on winding up?
The losses of the firm are paid out first. The assets of the firm, and the capital contributed by the partners to set off those losses, are then applied in order.
Third party debts are paid first. Next, any loan taken by the firm from a partner is repaid to that partner. The capital contributed by each partner is then repaid in the capital contribution ratio, and the balance is shared among the partners in their profit-sharing ratios. On realisation all the assets are sold in the market and the cash raised is used to pay the liabilities. Assets or liabilities may also be taken over by a partner, in which case that partner’s capital account is adjusted by the amount.
What circumstances require a partnership to be dissolved?
Three of the commonest are:
- The partnership was created for a fixed term, and the term has expired
- The partnership was created for a particular task or objective, and that has been completed or fulfilled
- One of the partners has died, which prima facie ends the partnership, unless the agreement provides otherwise, expressly or by implication from the conduct of the partners
What are the liabilities of the partners after dissolution?
The partners remain liable to third parties for any act done before the dissolution.
A partner’s liability ends once every event taken up before the dissolution of the firm is finished, and until public notice of the dissolution is given.
What are the rights of the partners after dissolution?
Every partner is entitled to equal rights, or to rights according to the contract between them.
All the partners are entitled to have the property of the firm applied in payment of its debts and liabilities, and to have the surplus distributed among them or their representatives according to their rights. Those rights arise when the firm is being wound up.
What is the difference between dissolution of a partnership firm and dissolution of a partnership?
Dissolution of a partnership occurs when a partner ceases to be associated with the business.
Dissolution of a firm is the winding up of the business itself.
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Dissolve your partnership firm
End the partnership properly, with the accounts settled and the notice given.
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