Deed of Dissolution of Partnership Firm - Template Form Pro · IN-law
✓ Valid in India · drafted to comply with local law
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DEED OF DISSOLUTION OF PARTNERSHIP
THIS DEED OF DISSOLUTION OF PARTNERSHIP ("Deed") is made and executed at ________ on this ________ ("Effective Date").
BY AND BETWEEN
________, son/daughter/wife of ________, aged about ________ years, holding PAN ________,
residing at the following address:
________ (hereinafter referred to as the "First Partner", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include his/her heirs, legal representatives, executors, administrators and permitted assigns), of the ONE PART;
AND
________, son/daughter/wife of ________, aged about ________ years, holding PAN ________,
residing at the following address:
________ (hereinafter referred to as the "Second Partner", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include his/her heirs, legal representatives, executors, administrators and permitted assigns), of the OTHER PART.
(The First Partner and the Second Partner are hereinafter collectively referred to as the "Partners" and individually as a "Partner".)
WHEREAS the Partners hereto, under and in pursuance of a Deed of Partnership ("Partnership Deed") dated ________ executed between them, have been carrying on in partnership the business of ("Partnership Business"):
________
AND WHEREAS the said Partnership Business has been carried on under the name and style of: ________ ("Partnership"), in accordance with the covenants, stipulations and provisions contained in the said Partnership Deed, a copy whereof is annexed hereto and marked as Annexure-A.
AND WHEREAS the Partnership / Partnership Deed was registered with the Registrar of Firms on ________ under registration number: ________, in the State of ________.
AND WHEREAS certain differences have arisen between the Partners and/or the Partners no longer desire to continue the said Partnership, for the following reason(s):
________
AND WHEREAS the Partners have mutually agreed to dissolve the Partnership with effect from ________ ("Date of Dissolution"), upon the terms and conditions herein recorded, in accordance with the provisions of the Indian Partnership Act, 1932 and the Indian Contract Act, 1872.
NOW THIS DEED WITNESSETH and it is hereby mutually agreed, declared and recorded by and between the Partners, in consideration of the mutual covenants and undertakings contained herein and the sufficiency whereof is hereby acknowledged, as follows:
§ 1. DISSOLUTION
1.1. The Partnership carried on under the name and style of ________ shall stand dissolved with effect from the Date of Dissolution, and the rights and obligations of the Partners inter se shall thereafter be governed solely by this Deed and by the provisions of the Indian Partnership Act, 1932.
1.2. As from the Date of Dissolution, no Partner shall carry on the Partnership Business or use the firm name, nor pledge the credit of the Partnership, nor incur any liability on behalf of the Partnership, save as required for the winding up of its affairs.
§ 2. WINDING UP AND LIQUIDATION
2.1. The following Partner: ________ is hereby appointed as the liquidating Partner under this Deed ("Liquidating Partner") and is authorised to do all acts necessary or proper for winding up the affairs of the Partnership in accordance with Section 46 of the Indian Partnership Act, 1932.
2.2. The Liquidating Partner shall be responsible for assessing, realising and getting in the assets, stock-in-trade and inventory of the Partnership, and is authorised to sell or otherwise dispose of any inventory or assets in the best interest of the Partnership.
2.3. The Liquidating Partner shall determine, discharge and file all tax obligations of the Partnership, including under the Income-tax Act, 1961 and the Central Goods and Services Tax Act, 2017, and shall effect cancellation/surrender of the GST registration and PAN/TAN of the Partnership as applicable.
2.4. The Liquidating Partner shall be entitled to the following remuneration for such services: ________.
2.5. Upon dissolution, the Partners shall forthwith appoint the following person or entity as the accountant: ________ ("Accountant") to ascertain the assets, liabilities and net worth of the Partnership as on the Date of Dissolution.
2.6. The Accountant shall furnish a copy of the statement of accounts to all Partners and other stakeholders, which statement shall include the list of inventories, assets, liabilities and the final account of the Partnership.
2.7. All Partners and stakeholders shall have the right at all reasonable times to examine the books and records of the Partnership to establish and enforce their rights under this Deed.
§ 3. ASSETS AND DISTRIBUTION
3.2. All advances made by the Partners to the Partnership shall be settled before any distribution on account of capital; once such advances are settled, the capital shall be repaid to the Partners according to their respective shares.
3.3. The residue of the assets of the Partnership, including all cash and cash equivalents, bank balances and proceeds from the sale of inventory and equipment, shall be distributed among the Partners in the following manner: ________.
3.4. All liabilities and expenses of the winding up shall be paid out of the assets of the Partnership.
§ 4. LIABILITIES AND RELEASE
4.1. In the event the winding up results in a loss, or the assets of the Partnership are insufficient to meet its liabilities and debts, the Partners shall bear and discharge such losses in the following manner: ________.
4.2. If any Partner fails to pay any such debt or obligation, the other Partner(s) may pay the same on behalf of the defaulting Partner, and the defaulting Partner shall reimburse the paying Partner(s) without undue delay, together with interest at the rate of ________ per annum from the date of such payment until reimbursement.
4.4. Notwithstanding anything to the contrary contained herein, in no event shall the Released Partners be liable to any Partner for any indirect, consequential, special or punitive damages, including loss of profits or loss of business opportunity, arising out of or relating to the Partnership or any act or omission of the Released Partners.
4.5. Nothing in this Deed shall affect or diminish the liability of the Partners to third parties in respect of debts and obligations incurred prior to the Date of Dissolution, and the Partners shall continue to be liable as between themselves in the proportions set out herein.
§ 5. MUTUAL OBLIGATIONS AND PUBLIC NOTICE
5.1. Each Partner shall cooperate fully with the other Partner(s) in effecting the dissolution and winding up of the Partnership in a timely and orderly manner.
5.2. Each Partner shall provide all necessary information and documentation, including financial records, contracts and certificates, to facilitate the winding up of the Partnership's affairs.
5.3. Each Partner shall use best efforts to minimise the cost and expense of the dissolution process.
5.4. The Partners shall give public notice of the dissolution by advertisement in the Official Gazette and in at least one local newspaper as required under Section 45 read with Section 72 of the Indian Partnership Act, 1932, and shall intimate the fact of dissolution to the Registrar of Firms by filing the prescribed notice under Section 63 of the said Act.
5.5. All expenses of and incidental to the stamp duty and registration of this Deed shall be borne by the Partners in the following manner: ________.
5.6. All books, records and documents of the Partnership shall be retained at the Partnership's principal place of business, and each Partner shall have the right to make copies of any records they wish to retain for their personal records.
5.7. In order to protect the goodwill realised on dissolution, and to the extent permissible under Section 54 of the Indian Partnership Act, 1932 and Section 27 of the Indian Contract Act, 1872, the Partners agree that no Partner shall carry on a business similar to that of the Partnership for the following period from the Date of Dissolution: ________, within the following geographical area(s):
________
§ 6. CONFIDENTIALITY
6.1. The Partners acknowledge that during the subsistence of the Partnership they may have gained access to confidential and proprietary information, including but not limited to trade secrets, customer lists, financial records, marketing strategies, business plans and other proprietary information relating to the Partnership Business ("Confidential Information").
6.2. The Confidential Information includes:
________
6.3. The Partners agree that all Confidential Information is and shall remain the property of the Partners jointly, and no Partner shall disclose, use, reproduce or otherwise disseminate any Confidential Information to any third party, except as required by law or with the prior written consent of all Partners.
6.4. The Partners shall use the Confidential Information exclusively for the purpose of winding up the Partnership and completing any remaining obligations arising from the dissolution.
6.5. The Partners shall take all reasonable measures, including appropriate physical, electronic and procedural safeguards, to protect against unauthorised access, use or disclosure of the Confidential Information; and shall ensure compliance with the Digital Personal Data Protection Act, 2023 in respect of any personal data forming part of the Partnership's records.
6.6. The obligations of confidentiality shall survive the dissolution of the Partnership and continue for a period of ________ (________) years from the Effective Date.
6.7. This clause is binding upon the Partners and their respective agents, representatives, heirs, successors and assigns, and shall survive the termination of this Deed and the dissolution of the Partnership.
§ 7. FORCE MAJEURE
7.1. "Force Majeure" means an event beyond the reasonable control of a Partner which prevents such Partner from complying with any of its obligations under this Deed, including but not limited to:
7.1.1. acts of God (such as, but not limited to, fires, explosions, earthquakes, drought, tidal waves and floods);
7.1.2. war, hostilities, invasion, act of foreign enemies, requisition or embargo;
7.1.3. rebellion, revolution, insurrection or military power, civil war;
7.1.4. riot, commotion or strikes;
7.1.5. acts or threats of terrorism, epidemic or pandemic, and orders, restrictions or directions of any government or statutory authority.
7.2. No Partner shall be liable for any failure to perform its obligations under this Deed if such failure is caused by a Force Majeure event, and in such case the obligations of the affected Partner shall be suspended for so long as the Force Majeure event prevails.
7.3. Upon the occurrence of a Force Majeure event, the affected Partner shall promptly notify the other Partner(s) and shall continue to use commercially reasonable efforts to comply with this Deed to the extent possible without delay.
7.4. The Partners shall consult together following the occurrence of a Force Majeure event to mitigate the consequences thereof.
§ 8. DISPUTE RESOLUTION, GOVERNING LAW AND JURISDICTION
8.1. This Deed shall be governed by and construed in accordance with the laws of India, including the Indian Partnership Act, 1932 and the Indian Contract Act, 1872.
8.2. Any dispute, controversy or claim arising out of or in connection with this Deed, including its existence, interpretation, breach, termination or validity, shall be referred to and finally resolved by arbitration by a sole arbitrator to be mutually appointed by the Partners, in accordance with the Arbitration and Conciliation Act, 1996. The seat and venue of arbitration shall be ________ and the language of arbitration shall be English. The award of the arbitrator shall be final and binding on the Partners.
8.3. Subject to the arbitration clause above, the courts at ________ shall have exclusive jurisdiction over all matters arising under or in connection with this Deed.
§ 9. NO WAIVER
The failure of any Partner to enforce any provision of this Deed shall not be construed as a waiver of such provision or affect the validity of this Deed or any part thereof, or the right of any Partner to enforce each and every provision in accordance with its terms.
§ 10. HEADINGS
The headings in this Deed are included for convenience of reference only and shall not define, delimit or affect the construction or interpretation of any provision hereof.
§ 11. INTERPRETATION
The Partners acknowledge that each Partner has reviewed and negotiated the terms of this Deed and has had the opportunity to contribute to its revision. Accordingly, the rule of construction that ambiguities are resolved against the drafting party shall not apply, and the terms of this Deed shall be construed fairly as between the Partners.
§ 12. SEVERABILITY
If any provision of this Deed is held to be invalid, illegal or unenforceable under applicable law, such provision shall be deemed severed and the remaining provisions shall continue in full force and effect, and the Partners shall negotiate in good faith a valid substitute provision reflecting their original intent.
§ 13. SURVIVAL OF OBLIGATIONS
Notwithstanding any other provision of this Deed, those provisions which by their nature are intended to survive the dissolution or completion of the winding up, including but not limited to the provisions relating to liabilities, release, confidentiality and dispute resolution, shall remain in full force and effect.
§ 14. COUNTERPARTS
This Deed may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
§ 15. ENTIRE AGREEMENT
The Partners represent and agree that they have read this Deed and understand its terms, including that it releases the Claims set out herein, and have executed this Deed of their free will and without any duress or coercion. This Deed constitutes the entire agreement between the Partners with respect to the dissolution of the Partnership and supersedes all prior agreements and understandings between the Partners in relation thereto.
IN WITNESS WHEREOF, the Partners hereto have set and subscribed their respective hands to this Deed on the day, month and year first hereinabove written.
SIGNED, SEALED AND DELIVERED by the within named First Partner ________:
_____________________________
________
SIGNED, SEALED AND DELIVERED by the within named Second Partner ________:
_____________________________
________
WITNESSES:
1. _____________________________
Name: ________
Address: ________
2. _____________________________
Name: ________
Address: ________
The undersigned, being a duly appointed Notary Public at ________, hereby certifies that on this date the above-named persons appeared before me, were properly identified to me, and did sign and execute the foregoing instrument in my presence.
IN TESTIMONY WHEREOF I subscribe my name and affix my notarial seal on this ________ day of ________, 20________.
_______________________
Signature
Notary Public
Address: ________
Annexure-A
(Copy of Partnership Deed dated ________)
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