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What is difference between dissolution of firms and partnership?
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What is difference between dissolution of firms and partnership?
The points presented below explain the difference between the dissolution of partnership and dissolution of the firm, on various grounds:
Dissolution of Partnership can be defined as the breaking of the relationship between the partner and other partners of the firm. On the other hand, dissolution of a firm is used to mean discontinuance of the entire firm including the relation among all the partners.
Dissolution of the partnership is voluntary in nature, as it is dissolved by mutual agreement. Conversely, a firm is dissolved either voluntarily or compulsorily.
Dissolution of partnership does not lead to the discontinuance of business, and so it is carried on by the remaining partners as before. As against this, with the dissolution of the firm, the business carried on by the firm also comes to an end.
In the case of dissolution of the partnership, the economic relationship between the partners continues to exist but in changed form. On the contrary, in the dissolution of the firm, economic relationship between partners ceases to exist.
When there is the dissolution of the partnership, revaluation account is prepared in order to revalue assets and reassess liabilities. In contrast, realisation account is prepared when the dissolution of firm takes place.
The firm’s books of accounts are not closed in the dissolution of the partnership, but the firm’s books are closed along with the closure of partner’s account, in the dissolution of the firm.
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What is difference between dissolution of firms and partnership?
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What is difference between dissolution of firms and partnership? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is difference between dissolution of firms and partnership? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is difference between dissolution of firms and partnership?.
What is difference between dissolution of firms and partnership? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is difference between dissolution of firms and partnership? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is difference between dissolution of firms and partnership?.
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