In which of the following the Economic relationship between the partners comes to an end?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Dissolution of partnership firm
On dissolution of the firm the business is closed, the assets are sold and the accounts of all partners are settled, so no business link is left between them. In a dissolution of partnership (and in the retirement or death of a partner, which are modes of it) the firm goes on with a changed agreement, so the economic relationship continues in a changed form.
NCERT (2026-27 edition):
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