The Supreme Court has quashed the
It was reiterated that “a partnership firm, whether registered or unregistered, is not a distinct legal entity, and hence the property of the firm really belongs to the partners of the firm.”
The court further said that the law was clearly unreasonable and arbitrary since by prohibiting suits for dissolution of an unregistered firm, for accounts and for realization of the properties of the firm, it creates a situation where businessmen will be very reluctant to enter into an unregistered partnership out of fear that they will not be able to recover the money they have invested in the firm or to get out of the firm if they wish to do so.
7 comments:
What if in an unregistered partnership,a partner expires(dies),what will happen to the assets like factory,machinery etc. and liabilities ?
Will the expired partners wife and kids have right over the assets and liabilities.
pls advice as in most indian business families,there are no agreements under partnership act,what if one of the 2 brothers conducting business expires,what rights does the living partner have,does the expired brother's heir have any right over the assets.
Thanks
Death of a partner will dissolve the partnership, unless otherwise agreed to in the Partnership Deed. The Deed may provide about how death of a partner will affect the partnership. If dissolved on death the dissolution will take place by liquidating the assets , paying off debts and distributing the remaining among the living partners and the legal heirs. if the assets are less than liabilities there could obligation to contribute from the other estates of the deceased. "In specie" distribution of the assets, genrrally, will be possible if all the parties agree or the deed provides for it. If you need detailed advice pleese contact with documents and facts at mohan.panikkar@gmail.com or mohan@kmplegal.com
"Partnership" is the relation between persons who have agreed to share the profits of
business carried on by all or any of them acting for all. "Ageed" does not imply 'registered in writin". Regarding brothers doing business without agreement, if a partnership can be established, the other aspects will be guided by the Partnership Act itself and the legal heirs will have claim on the assets.
sir i need the citation plz help?
Citation: AIR 2009 SC 1858, 2009 (5) SCC 608, JT 2009 (4) SC 212, 2009 (3) MLJ 946, 2009 (6) SCJ 23
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