Unit 3 Registration and dissolution of a firm

• Registration of Firms


  Process of officially recording a business partnership
• Registration process


  1. Send statement to registrar

  2. Include firm's name

  3. Include place of business

  4. Include partners' names and addresses

  5. Include duration of partnership

  6. Pay prescribed fees
• Registrar issues a certificate of Registration when satisfied
• No suit can be filed by firm against third party if not registered
• No relief to partners for set off of claim if not registered
• Aggrieved partner cannot take legal action against other partner or the firm if not registered
• Third party can sue the firm if not registered
• Dissolution of Firm


  Discontinuance of partnership between all partners
• Dissolution process


  1. Winding up of business

  2. Realisation of assets

  3. Settlement of liabilities
• Dissolution of partnership does not affect continuation of business
• Types of dissolution


  • Dissolution by agreement (section 40)
  • Compulsory dissolution (section 41)
  • Contingent dissolution (section 42)
  • Dissolution by notice (section 43)
  • Dissolution by court (section 44)
• Continuing liability exists until public notice of dissolution
• Rights to enforce winding up exist after dissolution
• Extent of continuing authority of partners exists after dissolution
• Settlement of partnership accounts is required after dissolution
• Personal profits earned after dissolution must be accounted for