Partnership to proprietorship

Guest (Querist) 18 August 2021 This query is : Resolved
Me and my father(late) registered a partnership firm (50-50). My father was the managing partner of the firm. It was specifically mentioned in the deed that in case of death of any of the partner partnership shall not dissolve and share of the deceased will be automatically transferred to the other partner. Now my father has died. What do I need to do? Has the partnership automatically dissolved as I read somewhere in case of only two partners in a partnership, partnership shall dissolve automatically. Or in case of the above mentioned clause in the deed the partnership has automatically been converted to sole proprietorship? We have not yet registered for get as partnership.
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Dr J C Vashista (Expert) 18 August 2021
After death of one of the two partners there is "no" partnership where minimum 2 partners is a must (mandatory) to form / continue as partnership firm. Accordingly the firm has no more status of a "Partnership" firm.

Clause of automatic transfer in the partnership agreement / deed has no legal consequence.

Advocate Bhartesh goyal (Expert) 18 August 2021
Condition in partnership deed " in case of death of one partner, partnership firm shall not dissolve " is contradictory in law and can not be act upon. After death of one partner out of two partners partnership firm comes to automatically dissolved however remaining partner may continue firm but status of partnership firm will be changed .

kavksatyanarayana (Expert) 18 August 2021
Yes. Agreed with the expert advice of the above two learned experts. This partnership business (Firm) is automatically dissolved. The share of the deceased partner shall devolve among all the legal heirs of the deceased.

P. Venu (Expert) 19 August 2021
There is a deeper issue. What happens to the assets which the deceased partner has contributed? In my understanding those assets have devolved upon the legal heirs and not upon the surviving partner, though himself a legal heir.

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