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CMA Intermediate · Financial Accounting · Dissolution of Partnership Firms including Piecemeal Distribution

Anil, Bharat and Chitra run a partnership at will. Anil gives written notice to Bharat and Chitra on 10 March stating his intention to dissolve the firm, but mentions no date of dissolution. The notice is communicated to both on 15 March. From which date is the firm dissolved?

The firm is dissolved on 15 March. In a partnership at will, any partner can dissolve it by written notice to all other partners, and where the notice mentions no date, dissolution takes effect from the date the notice is communicated, not from the date it was written.

  1. A10 March, the date of writing the notice
  2. B15 March, the date of communication of the noticeCorrect
  3. C31 March, the end of the financial year
  4. DThe date on which the Registrar records the notice

Explanation

Under Section 43, in a partnership at will any partner may dissolve the firm by written notice to all other partners. If no date is mentioned in the notice, the firm is dissolved from the date of communication of the notice, here 15 March. The date of writing or the Registrar's record does not govern.

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