Description

One of the disadvantages of a partnership firm, when compared to a Limited Liability Partnership (LLP), relates to business continuity. An LLP is considered a separate legal entity and will continue to exist even in case of death or incapacitation of one of the LLP Partners. On the other hand, a death or incapacitation or various other reasons as mentioned below. In this article, we look at some of the major reasons for the dissolution of a Partnership firm. Causes of Dissolution of Partnership Firms A partnership firm can be dissolved or closed for various reasons. The dissolution of parntership firm can happen voluntarily or involuntararily due to any of the following reasons: Dissolution by Agreement Any partnership firm can be dissolved by issuing a notice agreement to all the partners of the firm. If all the partners are in agreement on dissolution, then the partnership firm can be dissolved. This type of dissolution is the most common type and is called as voluntary dissolution.