VOLUNTARY WINDING UP UNDER THE SUPERVISION OF COURT

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According to section 396 of Companies Ordinance, a voluntary winding up of a company can also be carried under the strict registration of the court. 1.  Resolution At first, company has to pass special resolution for the voluntary winding up of the company. 2.  Supervision Order Following are the common grounds on which the court issues the supervision order: 1.  The liquidator performs his duty in partial manner. 2.  The winding up resolution is obtained by fraud. 3.  The liquidator does not strictly observe the rules of winding up the company 3.  Power of the Court The court has the power to appoint an additional liquidator, or to remove any liquidator. 4.  Dissolution After the supervision order is made, the liquidator may exercise his powers in winding up of a company.  On completion of winding up, the court will make an order that the company is dissolved. Share Capital; In simple words, the term “capital” means the particular amoun...
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DISADVANTAGES OF PARTNERSHIP

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The disadvantages of partnership are enumerated one by one as under:

1.  Unlimited Liability

It is the main disadvantage of partnership.  It means in case of loss, personal property of the
partners can be sold to pay off the firm’s debts.

2.  Limited Life of Firm

The life of this type of business organization is very limited.  It may come to an end if any
partner dies or new partner enters into business.

3.  Limited Capital

No doubt, in partnership, capital, is greater as compared to sole proprietorship, but it is
small as compared to Joint Stock Company.  So, a business cannot be expanded on a large
scale.

4.  Limited Abilities

As financial resources of partnership are limited as compared to Joint Stock Company, so it
is not possible to engage the services of higher technical and qualified persons.  This causes
the failure of business, sooner or later.

5.  Limited number of Partners

In partnership, the number of partners is limited, so the resources are also limited.  That
why business can not expand on large scale.

6.  Legal Defects

There are no effective rules and regulations to control the partnership activities.  So, it
cannot handle large‐scale production.

7.  Lack of Interest

 Partners do not take interest in the business activities due to limited share in profit and
limited chances of growth of business.

8.  Lack of Public Confidence 

As there is no need by law to publish accounts in partnership, so people lose confidence and
avoid dealing and entering into contract with such firm.

9.  Lack of Prompt Decision 

In partnership all decisions are made by mutual consultation.  Sometimes, delay in decisions
becomes the cause of loss.

10.  Lack of Secrecy

In case of misunderstandings and disputes among the partners, business secrets can be
revealed.

11.  Chances of Dispute among Partners  

In partnership there are much chances of dispute among the partners because all the
partners are not of equal mind.

12.  Expansion Problem

Partnership business may not be expanded due to limited number of partners, limited
capital and unlimited liability.

13.  Frozen Investment

It is easy to invest money in partnership but very difficult to withdraw it.

14.  Risk of Loss

There is a risk of loss due to less qualified and less experienced people.

15.  Transfer of Rights


In partnership no partner can transfer his share without the consent of all other partners.

CONCLUSION

From  the  above‐mentioned  findings,  we  come  to  this  point  that  despite  the  above disadvantages, partnership is an important from of business organization.  This is because its formation is very easy and due to unlimited liabilities, partners take great interest in business, because in case of loss they are personally responsible.

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