Which of the following statements are true: (A) Dissolution of a part…

The correct answer is Option (3) → (A), (B) and (C) only

A partnership is the relationship among the partners; a firm is the business they run together. The relationship can end and be remade while the business goes on, but when the firm is dissolved the business itself is closed.

(A) Dissolution of a partnership is different from dissolution of a firm. Correct. On admission, retirement or death the old agreement ends and a new one takes its place, yet the firm carries on. Dissolution of the firm means the relationship among all the partners ends and the business is wound up.

(B) A partnership is dissolved when there is a death of a partner. Correct. Death changes the relationship among the partners, so the existing partnership ends; the surviving partners may still continue the firm under a new agreement.

(C) A firm is dissolved when all partners give consent to it. Correct. This is dissolution by agreement: a firm is dissolved with the consent of all the partners.

(D) A firm is compulsorily dissolved when a partner decide to retire. Incorrect. Retirement only reconstitutes the firm. Compulsory dissolution happens when all or all but one partner become insolvent or when the business becomes illegal, not when one partner retires.

Note: Options (2) and (4) are printed the same, “(B), (C) and (D) only”. This does not affect the answer: statement (D) is incorrect, so the answer is Option (3).