DEED OF DISSOLUTION WHERE A COMPANY IS A PARTNER IN THE FIRM AND THE BUSINESS OF THE FIRM SHALL BE CARRIED ON BY THE COMPANY AFTER DISSOLUTION OF THE FIRM AND ALL PARTNERS SHALL BECOME DIRECTORS/SHAREHOLDERS IN THE COMPANY
THIS DEED OF DISSOLUTION made this _____ day of _________ year____ between:
1. Sh. _____ S/o ______ R/o _________ (hereinafter referred to as" the Party of the First Part ")
2. Sh. ______ S/o ____ R/o _______ (hereinafter referred to as "the Party of the Second Part")
3. Sh. ______ S/o _____ R/o __________ (hereinafter referred to as "the Party of the Third Part")
5. Sh. _____ S/o _______ R/o _________ (hereinafter referred to as "the Party of the Fourth Part")
6. M/s ____________, a company incorporated under the Companies Act, 1956 having its registered office at _________ through its Director Sh. _________ (hereinafter referred to as "the Company" or "the Party of the Fifth Part")
The Parties hereto are collectively called as "the Parties".
WHEREAS
1. The parties have been carrying on the business of __________ vide partnership deed dated __________ amended vide Supplementary partnership deed _________ under the name and style as "________" (hereinafter referred to as "the firm") with its office at ___________
2. The firm is doing very well and anticipates good business growth but the party of the First, Second, Third and Fourth part are not able to infuse fresh funds to get the new business. Therefore, the parties have decided to dissolve the firm w.e.f. __________ and thereafter the business be carried on by the Company.
3. The parties have recorded the terms and conditions as decided among themselves and the party of the Fifth part by means of an agreement dated ________ between the firm and the party of the Fifth part.
NOW THIS DEED WITNESSETH AS FOLLOWS:
1. Partnership to Dissolve
That in pursuance of the said agreement, the partnership subsisting between the parties vide partnership deed dated _______ amended vide supplementary partnership deed dated ________ shall stand dissolved with effect from ________ (hereinafter called "the effective date"). The party of the fifth part shall continue the business upon dissolution of this Partnership Firm.
2. Books of Accounts to be finalised
That the books of accounts of the firm shall be finalised up to the effective date and a Profit & Loss Account and Balance Sheet is to be drawn up and the same shall be audited by the auditor of the firm.
3. Sharing of Profits
That the profits or losses accruing to the firm shall be shared in the ratio agreed upon between the partners vide supplementary deed dated __________.
4. Equity Shares to be issued against Capital of Partners
That the Balance in Capital Account of the partners as per the audited Balance Sheet shall be converted into equity shares @ Rs. 10/- per equity share of the Company (i.e. party of the Fifth Part) to be rounded off in thousands.
5. Bank Account to be closed
That the bank account of the firm maintained with _________ (the existing bank) shall be closed after getting the accounts audited. However, no transaction in the account will take place after the effective date (except the cheques issued by the firm before the date of dissolution but not cleared by the Bank or cheques received by the firm but could not be deposited by the firm by the effective date). However, the outstanding balance after all the cheques are cleared may be transferred to the account of the party of the Fifth part upon finalisation of audited Balance Sheet.
6. Partners to become Directors of the Company
That all the partners of the firm shall be appointed as Directors of the Company w.e.f. the next day after the effective date.
7. Assets and Liabilities of Firm to be converted in the name of the Company
All the assets and liabilities of the firm as on the date of the dissolution (as described in the schedule annexed hereto) shall stand converted in the name of party of the Fifth Part. Thereafter, party of the Fifth Part shall be responsible for realising all debtors, moneys and advances of the firm and to give effectual receipts and discharges for the same and for such substitution. The party of the Fifth Part shall also be liable to pay all debts and liabilities of the firm including but not limited to income tax, sales tax and other levies or governmental charges, existing on the effective date or arising thereafter.
8. Company entitled to use the name of the Firm
That the Company (i.e. the party of the Fifth Part) shall be entitled to use the firm name "___________ ("Name of the firm") after the date of the dissolution by getting its name changed from "_________" to "______________".
9. Mutual Release by Partners
That the parties hereto mutually release each other from the articles of the partnership deed dated ________ amended vide Supplementary partnership deed dated _________ and from all claims and demands thereupon or in relation thereto.
10. Partners not to Carry on Similar Activity
That all parties (except party of the Fifth Part) covenants with the party of the Fifth Part that they will not, for the period of two years after the date of this deed either directly or indirectly, alone or jointly or as agent or employee of any person, firm or Company carry on or engage in any activity or business which shall be in competition with the business of the firm now carried on by the party of the Fifth Part.
11. Arbitration Clause
Any disputes or differences in respect of any clause in this deed may be resolved under the arbitration of Sh.___ _____ s/o Sh. _________ r/o________ and the provision of Indian Arbitration and Conciliation Act, 1996 and the rules made there under shall apply to the arbitration proceedings under this clause. The decision of the arbitrator (or, arbitrators) shall be final and binding on the parties
IN WITNESS WHEREOF, the Parties hereto have hereunto signed and executed this deed of dissolution.
Signed and delivered by Sh.________
Signed and delivered by Sh. ________
Signed and delivered by Sh. ________
Signed and delivered by Sh. ________
Signed and delivered for and on behalf of the Company
Director
Witness:
1.
2.
