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.

 

 

  • 26
What are you looking for?