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CA Foundation · Business Laws · The Indian Partnership Act, 1932

Asha, Binu and Chetan are partners in a firm at will, with no agreement on how long it will last. Asha serves written notice on the other partners saying the firm stands dissolved from the date of the notice. Under the Indian Partnership Act, 1932, what is the position?

The firm is dissolved from the date stated in Asha's notice. In a partnership at will, any partner may dissolve the firm by giving written notice to all the other partners, and no consent, court decree or minimum notice period is required.

  1. AThe firm is dissolved from the date mentioned in the notice, as any partner of a firm at will may dissolve it by giving noticeCorrect
  2. BThe firm cannot be dissolved unless all partners agree
  3. CThe firm is dissolved only after a court passes a decree
  4. DThe firm is dissolved only after three months from the date of the notice

Explanation

A firm at will may be dissolved by any partner giving written notice to all the other partners of the intention to dissolve it. Dissolution takes effect from the date mentioned in the notice, or from the date of communication if no date is mentioned. No consent of the others or a court order is needed, and there is no fixed notice period.

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