State the difference between dissolution of partnership and dissolution of partnership firm.
|Basis of Difference||Dissolution of Partnership||Dissolution of Partnership firm|
|Meaning||It means change in the partnership deed (or the agreement) among the partners.||It means that the business is wound up and the firm is dissolved.|
|Discontinuation||Business is not discontinued.||Business is discontinued, as the firm is dissolved.|
|Closure of Books of Accounts||Books of accounts are not closed, as there is only change in the existing agreement between the partners.||Books of accounts are closed, as the business is discontinued.|
|Assets and Liabilities||In this case, the assets and liabilities are revalued.||In this case, all the assets are sold off in order to pay the liabilities of the business.|
|Role of Court||There is no intervention by the court.||Dissolution of a partnership firm may be done with the consent of the court.|
|Nature||It is voluntary in nature.||It may be voluntary (as per the discretion of the partners) or compulsory (as per the order of the court).|
|Effect||It may or may not involve dissolution of the firm.||It necessarily involves dissolution of both the partnership as well as of the partnership firm.|
Concept: Dissolution of Partnership Firm
Is there an error in this question or solution?