Basis of Difference | Dissolution of Partnership | Dissolution of Partnership firm |
Meaning |
It means change in the partnership deed (or the agreement) among the partners. | It means that the business is wound up and the firm is dissolved. |
Discontinuation | Business is not discontinued. | Business is discontinued, as the firm is dissolved. |
Closure of Books of Accounts | Books of accounts are not closed, as there is only change in the existing agreement between the partners. | Books of accounts are closed, as the business is discontinued. |
Assets and Liabilities |
In this case, the assets and liabilities are revalued. | In this case, all the assets are sold off in order to pay the liabilities of the business. |
Role of Court | There is no intervention by the court. | Dissolution of a partnership firm may be done with the consent of the court. |
Nature |
It is voluntary in nature. | It may be voluntary (as per the discretion of the partners) or compulsory (as per the order of the court). |
Effect |
It may or may not involve dissolution of the firm. | It necessarily involves dissolution of both the partnership as well as of the partnership firm. |
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