CSEET · Fundamentals of Accounting · Partnership and LLP Accounts
Under the Indian Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called:
It is called dissolution of the firm. Under Section 39 of the Indian Partnership Act, 1932, when the partnership between all the partners ends, the firm is dissolved. Retirement of one partner only changes the constitution, not the whole firm.
- ADissolution of the firmCorrect
- BRetirement of a partner
- CReconstitution of the firm
- DConversion of the firm into an LLP
Explanation
Section 39 defines the dissolution of partnership between all the partners of a firm as the dissolution of the firm. Retirement or reconstitution changes the partners but the firm continues, so those options are wrong.
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