Dissolution Of Partnership

1. Sharing of partnership means that the business of the partnership is terminated or sold to another party. Shares may be dissolved for the following reasons:

(a) death, unethical or bankruptcy of one of the partners

(b) agreement between fellow partners

(c) when the business is unable to settle its debt and is forced to close

(d) by order of law (court)

(e) when it is not profitable to continue business

(f) when the purpose of establishing a partnership is reached

(g) when the partnership firm is changed to a limited company

2. Ways to dissolve partnership:

(a) all business assets are sold and all liabilities are settled.

(b) all assets and liabilities of a business are taken over by one of the partners and the claim against the remaining capital of the other partners is paid in cash/bank.

(c) Shares are sold to an individual, another partnership, or a company.