Question

State the difference between dissolution of Partnership and Dissolution of Partnership firm.

Answer 1

The difference between the Dissolution of Partnership and Dissolution of Partnership Firm is as follows:

$\begin{array}{ccc}\text{Basis of Difference}& \text{Dissolution of Partnership}& \text{Dissolution of Partnership Firm}\\ \text{Meaning}& \text{It means change in the partnership}& \text{It means that the business is}\\ & \text{deed (or the agreement) among the partners}.& \text{wound up and the firm is dissolved}.\\ \text{Discontinuation of business}& \text{It does not affect the continuation}& \text{It affects the business}.\\ & \text{of business.}& \text{Firm is closed in this case}.\\ \text{Assets and liabilities}& \text{Assets and Liabilities are revalued}.& \text{Assets are sold and realeased. Liabilities}\\ & \text{New balance sheet is prepared}& \text{are paid off}.\\ \text{Intervention by court}& \text{There is no intervention by the court}.& \text{Court has inherent power to intervene}.\\ & & \text{By the order of court, a firm can be dissolved}\\ \text{Economic relationship}& \text{Economic relationship among partners}& \text{Economic relationship among partner}\\ & \text{may remain or change.}& \text{comes to an end.}\\ \text{Closure of books of}& \text{No need to close account books}& \text{All books ofaccount are closed.}\\ \text{accounts}& \text{as the business continues to operate}.& \end{array}$