Question

Q.10

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 toward growing their businesses, and constantly innovating new products and services. One such example was the partnership venture of Ms. Amna, Ms. Saeeda , Ms. Sana and Ms. Iba. This partnership firm was called as “The Beauty Salon”. Based in Qurum since inception in 2015, this SME concentrated on providing various cosmetic and beauty treatments to its clients. The company closed doors to all its clients in 2020 due to death of one of its partners, Ms. iba

You are an Independent advisor based in Muscat and is required to advise the partners of the above firm in detail about all the possible ways that this partnership could be amended. For each of the amendments, you are required to explain the procedure in detail.                               

  

Answer 1

According to section 42 of Indian Partnership Act, 1932 if a partner in a partnership firm dies then such partnership firm will be dissolved automatically. But if there is a clause exist in deed to continue the firm after the death of partner then in such case nominee or the legal representative of the deceased partner can take the place of deceased partner and business of the firm can be continued with the presumption that the partnership firm was never dissolved on the death of that partner.

As per Section 37 on death of a partner his legal representative is enitiled to such profits and use of the share of deceased's property. Also entitled for subsequent profits in firm.

Procedure to be followed according to Indian Partnership Act, 1932 :

1. Inform the registrar of firms about such changes in partnership firm.

2. A notice in form no. V (Notice of changes in the constituition of firm) shall be submitted to registrar of firms.

3. A notice in form no. VI (Notice of dissolution of firm) shall be submitted to registrar of firms.

4. Draft a new partnership deed as per the changes and to file again the application along with the required documents to the registrar of the firms with applicable fees.

5. Attache copy of old partnership deed.

6. ID proof of all partners along with new partner.