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PPT - Dissolution of a Partnership Firm - 60-Day Revision Course for UPSC
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FAQs on PPT - Dissolution of a Partnership Firm
| 1. What are the main grounds for dissolution of a partnership firm under the Partnership Act? |  |
Ans. A partnership firm dissolves through mutual agreement of partners, death or insolvency of a partner, breach of partnership agreement, or notice given by any partner in a partnership at will. Compulsory dissolution occurs when the firm's purpose becomes impossible or illegal. The Partnership Act, 1932 specifies these dissolution grounds clearly for Indian partnership agreements.
| 2. How does dissolution differ from reconstitution of a partnership firm? | |
Ans. Dissolution ends the entire partnership and all partner relationships, whereas reconstitution occurs when partnership continues but with changes in membership-partners enter or exit without dissolving the firm completely. Dissolution requires settlement of all accounts and distribution of assets; reconstitution only adjusts capital and profit-sharing arrangements among continuing and incoming partners.
| 3. What happens to partnership assets and liabilities when a firm dissolves? | |
Ans. Upon dissolution, partnership assets are realised (converted to cash), and liabilities are paid in order: external creditors first, then partners' loans, followed by capital contributions, with remaining balance distributed as profit or loss. The dissolution process requires detailed accounting in the Realisation Account and Capital Account to ensure fair settlement among all partners equitably.
| 4. Can a partner force dissolution of a partnership firm, and what's the procedure? | |
Ans. In a partnership at will, any partner can force dissolution by giving notice; in a fixed-term partnership, forced dissolution typically requires grounds like misconduct or breach. The dissolving partner must provide written notice, settle accounts through the Realisation Account, and distribute assets according to the partnership deed and Partnership Act provisions governing dissolution procedures.
| 5. What legal documents and accounts are prepared during partnership firm dissolution? | |
Ans. The Realisation Account records asset sales and liability payments; the Capital Account shows each partner's final settlement; the Bank Account tracks cash movements. These accounts ensure transparency and compliance with the Partnership Act requirements. Partners can refer to mind maps and flashcards on EduRev to understand the accounting entries and legal documentation required during the entire dissolution process.
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Document Description: PPT - Dissolution of a Partnership Firm for UPSC 2026 is part of 60-Day Revision Course for UPSC Prelims preparation. The notes and questions for PPT - Dissolution of a Partnership Firm have been prepared according to the UPSC exam syllabus. Information about PPT - Dissolution of a Partnership Firm covers topics like and PPT - Dissolution of a Partnership Firm Example, for UPSC 2026 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for PPT - Dissolution of a Partnership Firm.
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