1. Mutual Consent and Agreement

• All partners must agree to close the firm unless otherwise provided in the deed
  
• A written agreement should be prepared outlining the decision to dissolve
  
• The partnership deed may include conditions for closure or dissolution
  
• Partners should resolve any pending obligations or disputes before proceeding
  
• Mutual consent ensures a smooth and lawful termination

2. Preparation of Dissolution Deed

• A dissolution deed is drafted to formally record the closure decision
  
• It includes details like date of closure, settlement terms, and liabilities
  
• Signatures of all partners are required for legal validity
  
• It also specifies the distribution of the remaining assets and the settlement of dues
  
• The document serves as legal proof of the firm’s dissolution

3. Settlement of Accounts and Liabilities

• All dues, debts, and obligations must be cleared before closing
  
• Assets are sold or distributed among partners according to the agreement
  
• Partner capital accounts and profit-sharing are settled
  
• Employees, suppliers, and clients must be paid or notified
  
• Maintain proper records of all financial transactions during winding up

4. Notification to Registrar of Firms

• If the firm is registered, an application for dissolution must be submitted
  
• Form C is filed with the Registrar of Firms along with the dissolution deed
  
• The Registrar updates the official records and strikes off the firm’s name
  
• Acknowledgment or certificate of dissolution may be issued by the office
  
• Timely filing avoids future legal or compliance issues

5. Post-Closure Formalities

• Close bank accounts opened in the firm’s name
  
• Cancel GST registration and other business licenses
  
• Inform tax authorities and file final income tax returns
  
• Issue a public notice of dissolution to inform creditors and customers
  
• Preserve final accounts, agreements, and records for future reference