Want to get out of partnership!


Hello Experts!

I entered into partnership with 'A'. his job was to bring clients and I look after operations and productions as I developed UNIQUE tool which is more efficient and cost effective for production than any other company in the market. Recently I found that 'A' has become careless and not working full time (as I am) and taking 50 percent of the profit through the year. My job profile forced me to work daily where as 'A' works permit him to bring the client for an year and than take 50 per cent even if he doesnt work. 

 

So the situation here is not looking very good for me as if stop working, company would not stand even one day.

 

Our partnership deed is very simple. there is no clause which says that upon dissolution no partner has should carry the similar business / work later.

 

so what do i do to get rid of him? i am ready to give his 50 per cent as i have lost trust in him.

 

I can PM partnership deed.

 

please suggest!

 

rsh

 
Reply   
 
SR. ADVOCATE

Dear Member:

As per sec.43  of the Indian Partnership Act a partnership may be dissolved by any partner giving notice in writing to all other partners of his intention to dissolve the firm.  The partnership is treated as dissolved as from the date mentioned in the notice as the date of dissolution.  Give a public notice.  Wind up  the business.  Draw the statements of accounts and prepare the b/s. After the setlement of dues and other income and expenditure divide the profit/loss according to the proportion set out in the deed.  After the dissolution you can do your business as your own.  No restriction.

Thanks

AAR KRISHNAN

 
Reply   
 



Thanks a lot, Sir!

 

Now, since absence of Restriction after dissolution clause, can both partners carry out the business by the same name separately? or they both have to change the name or identity. ?

 

I have trade mark rights of the brand on my name, as I made the product and entered in partnership later. Can I restrict 'A' to carry out the business by same name after dissolution?

 

Regards

rsh

 
Reply   
 
SR. ADVOCATE

Dear Member:

Once a dissolution is taken place now it is better for both parties to do their business independently.It is also better to have a Deed of Dissolution where you set out all the terms and conditions.  If an amicable settlement is not possible you can seek the help of a lawyer.  Now using the same name is the choice of the parties after dissolution.  When both parties use identical name then  there will be confusion among the clients.

As far as the trade mark is concerned, though the same is in your name and obtained before the formation of the partnership, the same is not your exclusive property since by using in the partnersip you pooled the right into the partnership for gain.  Now it has become the property of the firm. I has a goodwil.  The other partners can claim.

Thanks.

AAR. Krishnan

 
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