CS Professional · CSR and Social Governance · Partnership Firms
Neha and Omar in Lucknow formed a firm without stating any duration. Later Omar told Neha by phone that he wanted to leave and would stop attending. He sent no written notice. Neha argues the firm stands dissolved. Which view is correct?
The firm is not dissolved by notice. For a partnership at will, the Act requires a partner to give written notice to all the other partners of his intention to dissolve, and Omar's phone call is not written notice.
- ANot dissolved by notice, because dissolution of a firm at will needs written notice to all other partnersCorrect
- BDissolved, because an oral intimation to any partner suffices
- CDissolved automatically because Omar stopped attending
- DDissolved because a firm at will lasts only one year
Explanation
A firm at will may be dissolved by any partner giving notice in writing to all the other partners of intention to dissolve. A phone call is not written notice, so no dissolution by notice has occurred. Ceasing to attend does not itself dissolve it.
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