Question

Difference between dissolutions of partnership firm and dissolutions of partnership

Answer 1

1. A partnership is dissolved when a new partner is admitted, or an old partner retires or dies whereas a firm is dissolved by mutual understanding of partners or court.

2. The business of firm is not terminated in case of dissolution of partnership whereas dissolution of firm means termination of business partnership.

3. Assets and liabilities are revalued, and new balance sheet is drawn in case of dissolution of partnership whereas assets and liabilities are realized and paid off in case of dissolution of firm.

4. The dissolution of partnership creates a new partnership whereas in another case, new partnership will not be created.

Answer 2

According to partnership Act 1932, Dissolution of partnership firm means where all there is an agreement to dissolved the partnership or where they suffered heavy loss and when court found partnership illegal.

And in case there is no agreement made between the partners regarding dissolution of partnership firm then a partner wanting to dissolve the firm can do so by  giving notice of termination.