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Closure of Partnership Firm

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Overview

Closing a Partnership Firm

A partnership firm in India is an entity that has sole purpose of having profit from the business. In a partnership firm, two or more than two parties collaborate with a legal agreement to establish a business. This legal agreement is known as partnership Deed. Once the partners achieve the purpose, they decide to wrap up the partnership firm. In such cases, the firm is dissolved, and the partnership comes to an end.

Once the partnership firm shuts, all its affairs can be wind up by selling the assets. It leads to the payment of the liabilities and discharging the claims of the partners. The closure of partnership among all the partners of a firm is known as the closure of the partnership firm. This is usually initiated by signing a dissolution agreement between the partners. 

Modes of closing a partnership firm in India

Closure with the intervention of the court

When the closure of the company is initiated by one of the partners by suing any other partner, then the court involves itself. But a court in India can only conclude a partnership firm if the partnership is listed with the registrar of firms. Thus, any unregistered partnership entity cannot be dissolved by the court.

In such cases, the court may intervene and help in closing the company when one of the partners becomes incapable of carrying out his responsibility. On the other hand, if a company's partner is guilty of misconduct that may harm the business, or in case of a repeated breach in partnership, the court can intervene and help in closing the partnership.  

Closure without the intervention of the court

Mostly all the partnership firm closes through the closure agreement between the partners. In this mode, all the partners of a company come forward and sins an agreement that indicated the closure of the company. Such a closure involves the mutual settlement of all the pending liabilities. The partners also settle all the accounts among them. Thus, in this mode, there is no third party intervention. The closure without third party interference may happen due to numerous reasons such as:

1) Insolvency among the partners

2) Unlawful business practiced by one of the partners in the name of partnership firm

3) In case of the term of the partnership expires

4) Death of one of the partners

5) Resignation of the partner 

It can also be done when one of the partners sends notice in writing to another for dissolution

Document Required

PAN card

To wrap up a one-person company, the owner must provide the following incorporation certificates such as:

  • It is a mandatory document required for filing the closure of the partnership firm. All the partners must submit their PAN card details along with the Pan number of the firm. It acts as an identity proof. 
Address proof of partnership firm:

If the registered office of the partnership firm is rented, the entity must submit its rent agreement as a proof of address. You can also provide the following details as proof of address such as:

  • Electricity bill
  • Water bill
  • Property tax bill
  • Gas receipt 
NOC from the landlord
  • The partnership firms also must provide the No objection certificate if the place of business is a rental property.  
Information of the Account
  • The partnership firm that wants to wrap up needs to submit the financial statements of the firm.
Legal liabilities
  • If the partnership is having any pending litigations, then it must provide a statement about the pending litigations. 
List of secured creditors
  •  It includes the names of all the creditors that are secured. The partnership firm must provide the list of secured creditors for closing the partnership firm. 
Original Partnership Deed and all its modified versions, if any
  •  Any partnership firm that wants to close must hand over the original partnership Deed to the ministry of corporate affairs. If the original deeds have been modified, the firm also has to provide the modified version of the partnership Deed. 

Time Lines

  • (10 to 15 Days)
  • Purchase the Service
  • Upload / send the Documents
  • Discussion with expert
  • Filing of application with registrar authorities
  • Receipt of Certificate
  • Confirmation to client

Service Covered

Pricing for what you want required service

Basic

2450*
  • Expert Consultation
  • Closer of Firm

Business

3450*
  • Expert Consultation
  • Closer of Firm
  • One Year ITR of Firm

Enterprise

4950*
  • Expert Consultation
  • Closer of Firm
  • One Year ITR of Firm
  • One Year ITR of Partner upto 2
  • Notes:
  • * This price is inclusive of all Govt filing fee and excluding GST amount.

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