Home Attorneys & Law Stopping the clock for claims arising out of dissolutions of partnerships

Stopping the clock for claims arising out of dissolutions of partnerships


The following is a brief introduction to the topic:

Dissolution of a Partnership under The Indian Partnership Act, 1932, “Partnership Act” can have far-reaching consequences, affecting not only the erstwhile partners but also related third parties. The process of dissolution involves activities such as settling of accounts, concluding of on-going business matters, discharging the Partnership firm’s liabilities and finally, distributing any remaining assets among the partners basis their respective shares. The Limitation Act, 1963 provides a period of three years from the date of dissolution within which  the parties can agitate their claims arising from the dissolution and winding up of the firm[1]. The period of limitation rests on the notion that the date of dissolution marks the conclusion of the firm’s winding-up process and settling of the rights and liabilities of the affected parties. Is dissolution the same as winding up a firm? Former partners may not have the right to pursue their claims if the winding up process is not completed in the three-year period. This blog will be used to analyze whether there are any unresolved claims that have survived the three-year period.

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