Dissolution of Partnership is the dissolution of partnership enterprise. It happens because of the aspect that when the legitimate association between all the partners, comes to an end, and it is called as dissolution of an enterprise, however, when any partner becomes crippled, then the partnership between the particular partner and other partners of the enterprise, comes to an end, but the enterprise may continue to function, if other partners wish so. Below mentioned are a few key differences between Dissolution of Partnership and Dissolution of Firm.
|Dissolution of Partnership||Dissolution of Firm|
|Dissolution of a partnership – to the adjournment of the association between a partner and the rest of the partners of an enterprise||Shareholders are individuals or organizations who are the holders of one or more shares of the company.|
|Continuation of business|
|In event of dissolution of partnership, business continues as usual, but the partnership is reconstituted||In event of dissolution of firm, business stops|
|Intervention of Court|
|No requirement for court intervention||Firms can be dissolved by court intervention|
|Closure of book of accounts|
|Not closed||Closed for firm|
|After winding up of the entity|
|Assets and liabilities are revalued after winding up of existing partnership||Assets and liabilities are settled on winding up of a firm|
|Does not result in dissolution of firm||Dissolution occurs between partners of the firm|
Dissolution of the partnership leads to the end of the old agreement between the partners and its reinstatement with the new agreement. No physical disposal occurs. On the other hand, in the dissolution of the enterprises assets are disposed of and liabilities are decided.
Also Check: What is Dissolution of Partnership Firm?
The above mentioned is the concept that is explained in detail about the Difference Between Dissolution of Partnership and Dissolution of Firm for the class 12 Commerce students. To know more, stay tuned to BYJU’S.