Partnership Dissolution -- Valuation of Outgoing Partner's Share -- Determined as on date of actual valuation, not date of dissolution
(i) Indian Partnership Act, 1932, S.48 -- Partnership Dissolution -- Valuation of Outgoing Partner's Share -- Determined as on date of actual valuation, not date of dissolution -- Upon dissolution of a partnership at will, an outgoing partner's right to receive his share in the residue of the partnership assets is not frozen as of the date of dissolution. While profits or losses of the business must be ascertained as on the date of dissolution, this date has no relevance to the monetary value of the partner's share in the residue of assets, which must be determined as on the date of actual valuation. (ii) Indian Partnership Act, 1932, S.46, S.48 -- Partnership Dissolution -- Retention of Assets by Reconstituted Firm -- Not permissible without settling rights of outgoing partner -- Upon dissolution, all assets of the partnership must be liquidated unless the remaining partners pay the outgoing partners the market value of their share with consent, in lieu of liquidation. A reconstituted firm has no right to retain and use the assets of the dissolved firm without either purchasing them from the erstwhile partnership or settling the outgoing partner's entitlement.
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