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DEED OF DISSOLUTION OF PARTNERSHIP
This deed of dissolution of partnership business is made and entered into at __________,this______day of__________20___, between ABC, an Indian Citizen, r/o.________________________________________________, hereinafter referred to as the ‘Party of the First Part’ (which expression shall unless it be repugnant to the context and meaning there of, include his legal heirs, executors, administrators and assigns) and DEF, an adult Indian Citizen, r/o. _______________________________________, hereinafter referred to as the ‘Party of the Second part’. (Which expression shall unless it be repugnant to the context and meaning there of, include his legal heirs, executors, administrators and assigns)
` 1) The parties hereto have been carrying on the business of purchase, manufacture and sale of synthetic rubber and other allied products in partnership under the name and style of “XYZ Industries” under the Original Deed of Partnership dated _______________, and the said partnership business is carried on in accordance with the terms and conditions contained in the aforesaid deed of partnership.
2) As the parties hereto do not desire to continue the said partnership for diverse reasons, they have agreed to dissolve the said partnership with effect from the date of execution of this deed on the terms hereinafter stated.
3) The assets and property of the partnership business consists of the factory premises situate at _______________________________, District- _________, where the business of the firm is carried on and also includes the varied factory machinery, furniture & fixtures, stock in trade, chattels, telephone and other facilities ordinarily required for carrying on the business. Furthermore, they include the goodwill of the partnership, bank balances and outstanding dues to the firm. These assets, both moveable and immovable, tangible and intangible, have been contributed, either by the partners themselves or generated in the course of the partnership business.
4) Accounts of the partnership firm have been made up to the date of dissolution and the total value of the assets, debts, outstandings and liabilities of the partnership firm have been ascertained to the satisfaction of both the parties hereto.
5) It is agreed that ABC, the party of the first part, forgoes and renounces his entire right, title and interest in respect of all the assets and properties of the partnership firm in favour of DEF, in lieu of the latter partner taking over all the liabilities, debts and otstandings owed by the said partnership firm.
6) It is agreed that on effecting the above referred quid-pro-quo arrangement DEF, the party of the second part will be entitled to continue the business of the firm alone in the same name and will also be entitled to retain all the stock in trade, furniture & fixture, articles, moneys and goodwill of the partnership, subject to all debts and liabilities of the firm and to that extent ABC, will be deemed to have retired from the said firm.
7) The parties have agreed to record the terms of and hereby effectuate the dissolution of the firm in the manner following:-
NOW THIS DEED WITNESSETH AS FOLLOWS:
1) It is hereby agreed and declared that the partnership between the parties hereto in the name of “XYZ Industries”, be and it is hereby dissolved with effect from the date of execution of these presents.
2) The accounts of the business and assets, profits & losses of the said partnership till the date of dissolution have been made and settled and signed by the parties and parties confirm the same and except as hereinafter provided no party is liable to other in respect thereof.
3) The business of the said firm shall be carried on by the party of the second part i.e. DEF alone and as the sole proprietor thereof from the said date and the party of the first part shall be deemed to have retired from the partnership and shall have no claim thereto except to the extent mentioned hereinafter.
4) All the property and the assets of the firm including the factory premises, machinery, furniture & fixtures, chattels, telephones, stock-in-trade, goodwill of the partnership and the outstandings recoverable by the firm shall belong to DEF, the party of the second part in his personal capacity and the other party hereto hereby releases and renounces all the rights, title and interest therein or thereto as partner of the firm subject to the payment of the taxes, rates, assessments, dues and duties payable in respect thereof to the Government or Municipal Corporation or any other public body.
5) DEF, the party of the second part covenants with the party of the first part that he will pay and is liable to pay all the debts and liabilities of the firm subsisting on the date of dissolution including liability of the firm for income-tax and other taxes or government dues, if any, and shall indemnify and keep indemnified the party of the first part against the said liability and against all loss, costs, charges and expenses incurred by him on account of such debts and liabilities or any part thereof being required to be paid by the party of the first part.
6) Each of the parties hereto hereby releases the other from all the proceedings, accounts, claims and demands in respect of the said partnership but without prejudice to any rights or claims and remedies in respect thereof under the presents.
7) The party of the first part hereby appoints, nominates and constitutes DEF, the party of second part as his attorney or agent with authority to collect all the assets and property of the partnership and to ask, demand, sue for and recover and receive and to sign and give discharge for all the debts, estate and effects or other moneys due or owing or in any way belonging to the said partnership.
8) ABC, the party of the first part shall not for a period of three year from the date hereof, carry on or engage or be concerned or interested, either directly or indirectly, in the same or identical business as carried on by the said partnership in the Districts of Nasik, Thane and Greater Mumbai.
9) All benefits or rights flowing from the permits or licences held by the aforesaid Partnership Firm shall vest in DEF, the party of second part, to the exclusion of the other party.
10) ABC, the party of the first part, hereby agrees and undertakes to sign all applications, documents, and other papers as may be required to properly transfer all assets and properties allotted, assigned or released to DEF, the party of second part, but the costs, charges and expenses in respect thereof will be borne by the latter party.
11) Each of the parties hereto assures the other that save and except as recorded in the books of accounts of the firm and other record, none of them has received, collected or discharged or compromised any claim, demand or credit due to the partnership or incurred any debt or liability or obligation that may now or hereinafter, directly or indirectly, charge or affect the partnership or any of its property or assets.
12) Notwithstanding anything herein before contained, all the liability for Income-Tax on the personal income including Capital Gains tax of any party hereto, including any interest thereon and penalties imposed in respect thereof, incurred before dissolution or thereafter will be that of the party whose income it is and such party shall indemnify and keep indemnified the other party against such liability and costs, charges and expenses incurred on that account.
13) In the event of any dispute arising between the parties hereto in the course of the dissolution, the same will be referred to the arbitration of a common arbitrator, if agreed upon, or two or more arbitrators, each party to the dispute appointing his arbitrator, and the decision of the arbitrator/arbitrators shall be final and binding on the parties.
IN WITNESS WHEREOF the parties hereto have set and subscribed their respective hands, the day and year first herein above written.
Signed, Sealed and Delivered )
By the Withinnamed )
In the presence of ) ——————————
Witness :- ) (ABC)
“Party of First Part”
Signed, Sealed and Delivered )
By the Withinnamed )
In the presence of ) ——————————–
Witness:- ) (DEF)
“Party of Second Part”