Dissolution of Partnership and Immovable Property
In this article, I examine the treatment of immovable
property of a partnership firm, in view of various dissolution scenarios.
Statutory Framework
Section 14 of the Partnership Act, 1932 (“Partnership Act”)
talks of the property of the firm, which include property (a) brought in by the
partners, and (b) acquired by or for the firm, for its business (including the
goodwill of the business). In this regard, unless stated otherwise, any
property acquired from funds of the firm shall be deemed to have been acquired
for the firm.
Section 48 of the Partnership Act talks of settlement of
accounts upon dissolution of the firm. For the purposes of this article,
sub-section (b) talks of assets of the firm, and that upon paying (i) debts of
the firm, (ii) the partners, (what they are due for advances as distinguished
from capital, and on account of capital. Thereafter, the residue will be
divided among the partners in proportion to the profit sharing ratio.
Comments