— Kishore V, SME and ACW at Edumarz
The dissolution of a partnership is the end of the partnership business.
It occurs as a result of the valid affiliation between all partners coming to an end, which is referred to as dissolution of a business.
When one of the partners becomes disabled, the relationship between that person and the other partners of the company ends, but the enterprise may continue to operate if the other partners agree.
There are a few distinctions between dissolving a partnership and dissolving a firm.
Dissolution of Partnership | Dissolution of Firm |
Definition | |
Dissolution of a partnership – the dissolution of a partnership between a partner and the remainder of the enterprise’s partners. | Dissolution of a business occurs when all of an organization’s current partnerships are dissolved. |
Continuation of business | |
In the case of a partnership breakup, business as usual continues, but the partnership is reconstructed. | Business is halted in the case of a firm’s dissolution. |
Intervention of Court | |
There is no need for a judicial order. | Court intervention can be used to dissolve businesses. |
Closure of book of accounts | |
The case is still open. | Firmly closed |
After winding up of the entity | |
Following the dissolution of an existing partnership, the assets and liabilities are revalued. | When a company is wound up, its assets and obligations are resolved. |
Scope | |
Does not result in the firm’s dissolution | The firm’s partners dissolve the partnership. |