Dissolution of Firm

A distinction should be made between the 'dissolution of partnership' and 'dissolution of firm'. Dissolution of partnership implies the termination of the original partnership agreement or change in contractual relationship among partner. A partnership is dissolved by the insolvency, retirement, incapacity, death, expulsion, etc., of a partner or no the expiry/ completion of th tern/ venture of partnership. A partnership can be dissolved without dissolved the firm. In dissolution of partnership, the business of the by entering into a new agreement. On the other hand, dissolution of firm implies dissolution between all the partner. The business of the partnership firm comes to an end. Its assents are realized and the creditors are paid off. Thus, dissolution of firm always involves dissolution of partnership but the dissolution of partnership does not necessarily mean dissolution of the firm.


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