Partnership

Partnership  -  Retirement and dissolution  - There is a clear distinction between ‘retirement of a partner’ and ‘dissolution of a partnership firm’ -  On retirement of the partner, the reconstituted firm continues and the retiring partner is to be paid his dues in terms of Section 37 of the Partnership Act -  In case of dissolution, accounts have to be settled and distributed as per the mode prescribed in Section 48 of the Partnership Act -  When the partners agree to dissolve a partnership, it is a case of dissolution and not retirement -  A partnership firm must have at least two partners -  When there are only two partners and one has agreed to retire, then the retirement amounts to dissolution of the firm - In the present case, there being only two partners, the partnership firm could not have continued to carry on business as the firm. #2020 SCeJ 1383