Case Dissolution by Mutual Agreement

M and E were partners under an agreement which provided that partnership could be

terminated by Mutual Agreement only. M alone wants to terminate the partnership.

• Question :- Can he do so?

Verdict

• No, he cannot do so because under sec 40 because it can be only done by mutual consent of all the partners.

• Sec- 40.

CaseRight to have Business wound up.

• A, B and C are partners in a business. A is entitled, according to the terms of the partnership contract, to three- eighths of the partnership property and profits. A becomes insolvent but B and C continues the business under same name without paying out A’s share of assets of the firm or settling his account.

Question :- Is A entitled to any of the profits made in the

business by the firm after the date of his insolvency?

Verdict:-• Yes, If 1 partner is declared as insolvent, the

partnership is dissolved {sec.42}• A, therefore, ceases to be a Partner. His estate is

entitled to such share of profits in the firm as much his share of property is used in the firm .

• Sec – 46