Section 45 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A firm that has been dissolved can still bind its former partners. Section 45 says the partners remain liable as partners to third parties for acts that would have been acts of the firm before dissolution, until public notice of the dissolution is given. If a dissolution dispute is on your hands, our legal dispute resolution service can help you read the position.
Despite dissolution, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before dissolution, until public notice of the dissolution is given (45(1)). A proviso protects the estate of a partner who dies, the estate of a partner adjudicated insolvent, and a partner who retires without having been known to the person dealing with the firm to be a partner: none of them is liable under this section for acts done after the date he ceased to be a partner. The notices may be given by any partner (45(2)).
Section 45(1): the rule
The text says that, notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them that would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.
| Element | Text |
|---|---|
| Event | A firm has been dissolved |
| Who stays liable | The partners, "as such" (as partners), to third parties |
| For what | Any act by any of them that would have been an act of the firm if done before dissolution |
| Until | Public notice of the dissolution is given |
In plain terms, a third party who dealt with the firm may not know it has been dissolved. Until public notice is given, a partner can still bind the others as if the firm were running. The same pattern appears for retirement in section 32(3).
The words "act ... which would have been an act of the firm if done before the dissolution" tie the liability to the usual test of whether the act is within a partner's authority as an agent of the firm; see sections 18 and 19.
Example. Four partners dissolve their firm on 31 March. No public notice is given. On 15 April, one of them places an order with a long-standing supplier for goods of a kind the firm always bought. Under 45(1), all four can still be liable as partners to that supplier for the order. After public notice, the same order would not bind the others.
The proviso: who is not liable
The proviso protects three categories. In each, the person is not liable under this section for acts done after the date on which he ceases to be a partner.
| Who | Condition in the text |
|---|---|
| Estate of a partner who dies | The partner dies |
| Estate of a partner who is adjudicated an insolvent | He is adjudicated insolvent |
| A partner who retires without having been known to be a partner | He retires, and was not known to the person dealing with the firm to be a partner |
Points to note:
- The protection is against acts done after the date he ceases to be a partner.
- It is a protection against liability under this section. It does not say that earlier acts of the firm, before the partner ceased to be one, stop binding him or his estate.
- The third category reflects the same idea as the proviso to section 32(3): if a person never knew that someone was a partner, he cannot rely on the absence of notice against him. For the retirement rule in detail, see section 32.
Example. Mr Gill, a sleeping partner whose name has never appeared on the firm's documents and who has never been introduced to its suppliers, retires in January, and the firm is dissolved in March with no notice. A supplier who sells goods in April and never knew of Mr Gill cannot hold him liable under this section for that sale, as he retired without being known to be a partner.
Section 45(2): who may give notice
The copy consulted is garbled in this sub-section. It reads, in effect, "Notices under such - Section 91) may be given by any partner", where a sub-section reference has been mistyped. Read by sense, it provides that the notices contemplated may be given by any partner. The exact cross-reference should be checked in the official text. A related sub-section on notice appears in section 32(4) for retirement.
How is public notice given?
Section 45 does not say how public notice is to be given. The Act deals with the mode of public notice in section 72; see sections 72 to 74. A firm that is registered must also tell the Registrar about dissolution; see sections 62 and 63. Those are separate steps from public notice.
Link with winding up
Section 45 deals with liability to outsiders. How partners may act among themselves after dissolution to wind up is dealt with in sections 46 and 47. Under section 47, partners' authority continues after dissolution only so far as needed to wind up and finish unfinished transactions. Section 45 is the outsider's protection, and section 47 is the internal limit.
What can the deed change?
Section 45 does not contain "subject to contract" words. It protects third parties who dealt with the firm, so a private understanding between partners is not stated to remove it. Partners can, though, agree between themselves who bears the cost of a claim, and the deed may require the partners to give the notice promptly.
Practical points
- Publish notice on the dissolution date, not weeks later.
- Write directly to existing customers and suppliers as well; the text of section 45 refers to public notice, but a direct letter also removes later doubt about what the third party knew.
- Keep proof of the notice given.
- Record the dissolution with the Registrar if the firm is registered.
Need help with a dissolution claim?
If a third party has claimed against you for something done after the firm was dissolved, the date and form of public notice will matter. Our legal dispute resolution team can review the notice and the dealings and tell you where you stand. Please bring the dissolution deed, any notice published, and the claim itself.
Key takeaways
- Dissolution does not end liability to third parties until public notice is given (45(1)).
- The liability is for acts by any partner that would have been acts of the firm before dissolution.
- The estate of a deceased or insolvent partner, and a retired partner not known to be a partner, are not liable under the section for acts after they cease to be partners.
- Any partner may give the notice (45(2); the sub-section is garbled in the copy consulted).
Read next
- Section 44: dissolution by the Court
- Sections 46 and 47: winding up and continuing authority of partners
- Section 32: retirement of a partner
- Dissolution of a partnership firm: modes and process
Disclaimer: Based on the text of the Indian Partnership Act, 1932 as consulted on 1 October 2026. Several States have amended the registration chapter and make their own rules, forms and fees for the Registrar of Firms. This article is general information, not legal advice; check the official text and your State's rules before acting.