The correct answer is Option (3) → (A), (B) and (C) only
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(A) Dissolution of a partnership is different from dissolution of a firm. This statement is True. Dissolution of a partnership refers to a change in the existing relationship among partners (reconstitution, e.g., admission, retirement), but the business may continue. Dissolution of a firm means the termination of the business itself.
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(B) A partnership is dissolved when there is a death of a partner. This statement is True. The death of a partner necessarily breaks the existing partnership agreement, leading to the dissolution of the partnership, even if the remaining partners agree to continue the business by forming a new firm/agreement.
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(C) A firm is dissolved when all partners give consent to it. This statement is True. A firm may be dissolved at any time with the consent of all the partners, which is known as dissolution by agreement (Section 40 of the Indian Partnership Act, 1932).
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(D) A firm is compulsorily dissolved when a partner decide to retire. This statement is False. Retirement of a partner leads to the dissolution of the partnership, not the compulsory dissolution of the firm (business). The firm may continue operating with the remaining partners. Compulsory dissolution of a firm occurs only under circumstances like the business becoming unlawful or all partners becoming insolvent (Section 41).
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