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Which statement distinguishes dissolution of a firm from dissolution of partnership?
AA firm cannot be dissolved by court
BDissolution of partnership closes the books
CBoth require winding up
DDissolution of the firm involves winding up and closure of business, whereas dissolution of partnership is mere reconstitution with business continuing
Answer & Solution
Correct answer: D. Dissolution of the firm involves winding up and closure of business, whereas dissolution of partnership is mere reconstitution with business continuing
Dissolution of the firm winds up the business and closes the books; dissolution of partnership is only a reconstitution (a partner leaving) with the firm continuing.
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