Which combination of statements is true about dissolution?
(A) Dissolution of a partnership is different from dissolution of a firm.
(B) A partnership is dissolved when there is a death of a partner.
(C) A firm is dissolved when all partners give consent to it.
(D) A firm is compulsorily dissolved when a partner decides to retire.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (C) only
Dissolution of partnership ends the existing agreement among the partners, but the firm may go on. Dissolution of the firm ends the business itself, and with it every partnership among the partners.
(A) Dissolution of a partnership is different from dissolution of a firm. Correct. A partnership can be dissolved while the firm continues; the reverse is not possible.
(B) A partnership is dissolved when there is a death of a partner. Correct. Death of a partner ends the old agreement, so it is a mode of dissolution of partnership.
(C) A firm is dissolved when all partners give consent to it. Correct. This is dissolution by agreement.
(D) A firm is compulsorily dissolved when a partner decides to retire. Incorrect. Retirement only reconstitutes the partnership; compulsory dissolution covers insolvency of partners and a business becoming unlawful.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
