What happens if the decision to dissolve the partnership firm is taken?
Answer & explanation
Correct answer: option 2
The correct answer is option 2 - All partners are required to settle the claims and liabilities of the firm.
After the dissolution of a partnership firm, the firm ceases to exist as a business entity. The partnership's operations come to an end, and the partners must initiate the process of winding up the firm's affairs. This involves settling the claims and liabilities of the firm.