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.
In Dissolution of partnership firm, the Economic relationship between the partners comes to an end.
Dissolution of partnership refers to a change in the relationship between partners due to events like admission, retirement, or death of a partner. The business may still continue whereas Dissolution of partnership firm means complete termination of the business and economic relationship between all partners. The firm ceases to exist.
Retirement of a partner leads to dissolution of the partnership (not the firm), and the remaining partners may continue the business.
Death of a partner also leads to dissolution of the partnership, but not necessarily the firm, if there's an agreement to continue.