Hello students let us begin with the interesting chapter called as “Dissolution of partnership firm” first of all let us try to understand the meaning and definition of this “Dissolution” word so let us go for the first module that is meaning, definition, reasons & legal effects of Dissolution of partnership firm so here we go, first is meaning of dissolution so let us try to understand what is dissolution, so when partner’s of an existing form decides to put an end to the partnership business and close down the partnership firm it is known as dissolution of firm. So it will be the complete closure of our business. Now moving ahead, they saying, it is a mutual agreement of all partners which brought the firm into existence, sab partner ne milke yeh decide kiya tha ke hume business kerna hai, it was agreed mutually by all the partners but now they are saying, when the agreement comes to an end, the firm is called as dissolved, so now the end of the contractual relationship that is job hi agreement kiya tha, contract kiya tha into that exist among one or more partners is called as dissolution of partnership firm, so what is contractual relationship that is job hi agreement phele contract sign hua tha usko agar end ker diya toh that will be the end of the partnership as well that is dissolution of partnership. Now moving ahead, let us try to understand the definition of partnership, let us try to understand the definition of dissolution, so according to section 39 of the partnership act 1932 dissolution of partnership between all the partners of the firm is called as dissolution of firm. These are the partners who are departed from each other now so firm bhi dissolve hone wala hai now moving ahead, they saying reasons of dissolution, kyu dissolution ho sakta hai so the first one is all partners agree to dissolve the firm, sab ne milke reason may be whatever sab ne milke yeh decide kiya ke abhi hume firm band kerna hai so that will be the dissolution ka first reason then, continuous disputes among the partners partner ek dusre ka nhi sunte bahut jhagda ho raha hai so firm will be ended there then next one continuous losses suffered by the firm that means in flow of cash kum hai and out flow jyada hai so end ho sakta hai partnership ka , then the next one is retirement death of one or more partners jo main partner hai who retire hogaya ya death hogaya toh bhi business ko effect hoga that will be one of the reasons then insolvency one or more partners bankrupt or unable to pay dues what is insolvency is bankruptcy ya toh ek ya jyada partner bankrupt hogaye matlab they are not able to pay their dues toh bhi firm band ho sakta hai now moving ahead the next one period of the firm expires and venture for which the firm is formed to get completed so when the firm is for specific purpose or period toh who period expire ho gaya khatam hogaya toh hume business band kerna padega or the venture for which the firm is formed what is venture, venture means a specific project toh ek particular project k liye partnership firm open kiya tha who project abhi khatam hogaya toh partnership firm bhi end hojayega dissolve ho jayega, now moving ahead the next one is when partner becomes of unsound mind or insane so what is unsound mind, he became mentally ill toh bhi business ko effect hoga now moving ahead the next reason is business o firm is illegal or unlawful so if the firm is getting in wrong practices agar galat jagah se paisa kama rhe hai toh bhi business dissolve kaerna padega and the next one they are saying is partner transfers whole of his interest to third party without consent from others toh kisi particular partner ne without taking the consent of other partner apna interest ya apna share kisi third person ko out of the business person ko transfer kiya toh that can be the main reason without consent as in usne baki kisi logo se permission nhi liya so these are the partners and this the third party so ek person ne uska share third party ko dediya toh that will be the one of the reasons for the dissolution of partnership and the next one is partner frequently makes a breach of agreement now what is breach it is break the contract agreement breach kerna matlab contract break kerna toh agar yeh frequently hote raha ha kisi partner se so firm will get dissolved now they are saying partner is guilty of misconduct, so illegal activities mein agar partner jaraha hai koi confidential information woh kisi aur ko agar supply ker rha hai ya whatever any other illegal activity toh bhi firm dissolve ho sakta hai. Now moving ahead the next one we are seeing effects after firm is dissolved so now let us try to understand this. The first effect that is all activities of the firm are closed down firm ka sab activities band kerna padega kyun ki business end kerne ka baat hua hai. The next one is all assets including goodwill are realized agar firm band karna hai toh assets ka kya kerenge toh we have to realize either it will be realized in cash or partners take over ker lega, so it should be realized, so goodwill is reputation of business then the next one is dispose matlab hume sell kar dena hai, realize karna hai and finally all liability including partners capital are paid from the amount realized toh assets sell karkejo bhi paisa aayega usme se hume liabilities pay off kerna hai. So these are the effects of dissolution and here ends our this module.