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Women have been encouraged throughout the world to be entrepreneurs. Many reasons, some of them being...

Women have been encouraged throughout the world to be entrepreneurs. Many reasons, some of them being to support themselves and their families; to attain the fulfillment of having started something on their own and to satisfy their desire for financial independence. Women not only create jobs for themselves and others, but also work towards growing their businesses, and constantly innovating new products and services. One such example was the partnership venture of Ms. Roya, Ms. Nida and Ms. Sarah. This partnership firm was called as “The Royal Bakers of Oman”. Based in Muttrah since inception in 2012, this SME concentrated on making innovative Omani and Arab bakery products for immediate consumption. Further, they expanded their business and entered into packed products, whereby supplying their edible items in hypermarkets and shops in Muscat. In 2020, this firm failed multiple times to pass the food safety test laid down by the Muscat Municipality. This resulted in forced closure of the said firm.
You are requested to write down a report explaining different reasons for amendments in the constitution of the firm dissolution of partnership and closure of the firm . Also explain the dissolution settlement procedure in detail.

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Expert Solution

Dissolution of partnership is that change in the partnership relation which ultimately culminates in its termination. It is the change in the relation of partners caused by any partner's ceasing to be associated in the carrying on of the business.

Causes of Dissolution of Partnership Firms

  • Dissolution by Agreement. ...
  • Dissolution by Notice. ...
  • Insolvency of Partners. ...
  • Commitment to Illegal Business. ...
  • Death of a Partner. ...
  • Expiry of Term. ...
  • Completion of Work or Contract. ...
  • Resignation of Partner.

Dissolution of Partnership Firm and settlement of Accounts. Dissolution of partnership firm is a process in which relationship between partners of firm is dissolved or terminated. This process includes the discarding and disposing of all the assets of firm or and settlements of accounts, assets, and liabilities

  • The firm will pay the losses including the deficiency of capital firstly out of the profits, secondly out of the partner’s capital and lastly by the partners individually in their profit sharing ratio.
  • The firm shall apply its assets including any contribution to make up the deficiency firstly, for paying the third party debts, secondly for paying any loan or advance by any partner and lastly for paying back their capitals. Any surplus left after all the above payments is shared by partners in profit sharing ratio.

ekkarill92 answered 2 years ago
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