Describe the rights and liabilities of partners on dissolution of a firm.

 The dissolution of a partnership firm means the end of the partnership relationship between the partners. It can occur due to various reasons, such as the expiry of the partnership term, mutual agreement between partners, bankruptcy of the firm, or death of a partner. Upon dissolution, the partners' rights and liabilities need to be settled, which are discussed below:

1. Right to share in assets: Upon dissolution, the firm's assets are sold, and the proceeds are used to pay off the firm's liabilities. The remaining amount is then distributed among the partners according to their respective shares in the firm.

2. Right to return of capital: Each partner has the right to get back the amount of capital he or she has contributed to the firm.

3. Liability for firm's debts: All partners are jointly and severally liable for the firm's debts. This means that if the firm's assets are not enough to pay off the debts, the partners will be personally liable to pay off the remaining amount.

4. Liability for future debts: Partners are not liable for the firm's debts incurred after the dissolution, except in certain circumstances, such as if a partner continues to represent himself or herself as a partner after the dissolution.

5. Right to indemnity: A partner who has paid more than his or her share of the firm's debts upon dissolution has the right to be indemnified by the other partners.

6. Right to compete: Upon dissolution, partners have the right to compete with the firm, except if there is a clause in the partnership agreement that restricts them from doing so.

7. Duty to account: Partners have a duty to account to each other for all the profits and losses of the firm up to the date of dissolution.

8. Duty to notify third parties: Partners have a duty to notify third parties, such as customers and suppliers, of the dissolution of the firm.

In conclusion, the rights and liabilities of partners upon the dissolution of a partnership firm are significant, and it is essential for partners to understand them to avoid disputes and legal challenges. Partners have the right to share in the firm's assets, the right to return of capital, and the right to compete. They are also jointly and severally liable for the firm's debts and have a duty to account and notify third parties of the dissolution.

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