Unregistered partnership deed
sujoy ghosh
(Querist) 28 February 2017
This query is : Resolved
Dear Sir/Madam,
My father and elder brother where partners in a firm with a 50% profit sharing ratio. My father has expired recently and now my brother is saying that this partnership deed still exists since in the partnership deed it is mentioned that the partnership deed cannot be dissolved due to death. However can a mere writing can supersede what is there in the Indian partnership act which says that if it is a partnership between only two partners then if one dies the partnership firm is automatically dissolved and the partnership deed becomes void. My elder brother also said that in case of an unregistered partnership deed the Indian partnership act does not apply. Is it so kindly offer you comments on this.
Warm Regards,
Sujoy Ghosh
sujoy ghosh
(Querist) 28 February 2017
Partnership was partnership at will and prior to that my father was the sole proprietor of the firm.
kavksatyanarayana
(Expert) 28 February 2017
As per your post, it is understood, in first instance, your father was proprietor (i.e. individual concern) and with your elder brother formed firm. The Partnership firm registration is optional. but to proceed for a suit, it shall be registered. And if a partner out of 2 is died, then the legal heir of the deceased may step into the shoes of the firm. then ok. otherwise it is deemed to be dissolved.
Ms.Usha Kapoor
(Expert) 01 March 2017
“A partnership normally dissolves on the death of the partner unless there was an agreement in the original partnership deed. Even assuming that there was such an agreement in a partnership consisting of two partners on the death of one of them the partnership automatically comes to an end and there is no partnership which survives and into which a third party can be introduced. Hence on the death of S, the original partnership was dissolved. The subsequent taking in of the assessee as a partner was only as a result of entering into of a new partnership between R and the assessee. Partnership was not a matter of heritable status but purely one of contract.”
in CZSS OF UNREGISTERED pARTERSHIP fIRM FIRM CONTINUES TO REALIZE PROPERTY OR ASSETS OF THE FIRM ON THE DEATH OF ONE PARTNER.
sujoy ghosh
(Querist) 01 March 2017
OK. So does the Indian partnership act of 1932 is binding in case of this unregistered partnership deed which was a partnership at will.
Ms.Usha Kapoor
(Expert) 02 March 2017
Yes! normally if there are two partners and one of them dies, partnership gets automatically dissolved notwithstanding a contract to contrary.. In case of unregistered partnership partnership continues for property or Assets.
sujoy ghosh
(Querist) 08 March 2017
Thanks you all for your expert comments.
