3) Proportional Share in Equity determined considering Partnership

Dissolved on 30th March’2006 -:

Dissolution of partnership between all the partners of a firm is called

the dissolution of the firm. Partnership is the relation between persons
who have agreed to share profits and Loss of business carried on by all
or any of them acting for all. Thus, if some partner is changed/added/
goes out, the ‘relation’ between them changes and hence ‘partnership’
is dissolved, but the ‘firm’ continues. Hence, the change is termed as
‘reconstitution of firm’. However, complete breakage between relations
of all partners is termed as ‘dissolution of firm’. After such dissolution,
the firm no more exists
The settlement of accounts after dissolution - of a firm is dissolved as
provided in the Act. In the Lone Pine Cafe Case also, disregarding the
marital complications of Mr. and Mrs. Antoine considering the
Partnership as dissolved we would be able to conclude that , As per the
balance sheet as on 30 March’2006 , the financial balance sheet had
Net Loss of $10,854 which has to be deducted from the Total owner’s
Equity of $48000 (16000 contributed by each of all the Partners during
the start of the Business ) .The balance equity left with the Cafe was
of $37,146 , which has to be proportionately divided among all the
partners i.e. $12,382 per partner. Thus, as the business was in Loss
for the said financial period, all the partners also had to bear Loss in
the returns for the capital invested in the Lone Pine Cafe.