Chapter VI - Dissolution of a Firm
Section 50
Section 50: Personal profits after dissolution on death
Section 50 carries a specific personal-profit accountability rule into the period after dissolution caused by a partner's death and before winding up is complete.
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Need advice on Section 50?
This article is for general information. Refer to the Indian Partnership Act, 1932 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Subject to contract between the partners, the provisions of clause (a) of section 16 shall apply to transactions by any surviving partner or by the representatives of a deceased partner, undertaken after the firm is dissolved on account of the death of a partner and before its affairs have been completely wound up:
Provided that where any partner or his representative has bought the goodwill of the firm, nothing in this section shall affect his right to use the firm name.
Central rule and applicability
Subject to contract, Section 16(a) applies to relevant transactions by surviving partners or a deceased partner's representatives during that period. That clause addresses personal profits from firm transactions, property, business connection or name. A partner or representative who bought the firm's goodwill retains the stated right to use the firm name.
Limits and related provisions
The section's express setting is dissolution on account of death, not every imaginable exit. It incorporates Section 16(a), not the entirety of Section 16 without distinction. The goodwill proviso concerns firm-name use; the deed, sale terms and other obligations still need to be considered.
Hypothetical business example
Hypothetical: A surviving partner completes a firm transaction after death-triggered dissolution and earns a personal benefit from using firm property. The winding-up account examines Section 16(a) as applied by Section 50 rather than assuming dissolution permits keeping every resulting profit.
Practical decision flow
Confirm that dissolution occurred because of a partner's death and winding up remains incomplete.
Identify the transaction, actor and personal profit connected to the Section 16(a) categories.
Check contractual terms and any genuine goodwill purchase before settling the profit account.
Check the applicable state law
This guide explains the central Section 50 baseline. State amendments, notifications and rules can affect its application. Confirm the law applicable to the firm's location and the relevant partnership agreement before acting.
Practical checklist
Do
- Confirm that dissolution occurred because of a partner's death and winding up remains incomplete.
- Identify the transaction, actor and personal profit connected to the Section 16(a) categories.
- Check contractual terms and any genuine goodwill purchase before settling the profit account.
Avoid
- The section's express setting is dissolution on account of death, not every imaginable exit. It incorporates Section 16(a), not the entirety of Section 16 without distinction. The goodwill proviso concerns firm-name use; the deed, sale terms and other obligations still need to be considered.
Glossary
- Personal profit
- A benefit whose connection with firm transactions or resources is assessed under Section 16(a).
- Goodwill purchase
- The transaction relevant to the express firm-name proviso.
Frequently asked questions
Does Section 50 incorporate both clauses of Section 16?
It expressly incorporates clause (a).
What period is covered?
After dissolution on account of death and before the firm's affairs are completely wound up.
Is a goodwill buyer's firm-name right preserved?
Yes, in the circumstances stated in the proviso.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026