Question

State the difference between dissolution of partnership and dissolution of partnership firm.

Answer 1

Dissolution of Partnership  
1.    It means change in the partnership deed (or the agreement) among the partners.
2.    Business is not discontinued. 
3.    Books of accounts are not closed, as there is only change in the existing agreement between the partners. 
4.    In this case, the assets and liabilities are revalued. 
5.    There is no intervention by the court. It is voluntary in nature. It may or may not   involve dissolution of the firm.    

Dissolution of Partnership firm 
1.     It means that the business is wound up and the firm is dissolved.  Business is discontinued, as the firm is dissolved.  
2.    Books of accounts are closed, as the business is discontinued. 
3.    In this case, all the assets are sold off in order to pay the liabilities of the business.  
4.    Dissolution of a partnership firm may be done with the consent of the court.  
5.       It may be voluntary (as per the discretion of the partners) or compulsory (as per the order of the court).

Answer 2

Answer:

State the difference between dissolution of partnership and dissolution of partnership firm.