Dissolution of the Partnership and Dissolution of the firm
Dissolution of the Partnership:
- A partnership is dissolved when a new partner is admitted or on old partner retires or dies.
- The business of the firm is not terminated.
- In the event of dissolution of partnership, assets and liabilities are revalued and new balance sheet is drawn.
- Revaluation Account is prepared to ascertain the profit/loss . on revaluation.
- The dissolution of a partnership will create a new partnership
Dissolution of the Firm :
- A firm is dissolved by the partners mutually or by the court.
- The dissolution of the firm means the termination of Partnership business.
- In the event of dissolution of firm, assets are realized and liabilities are paid off.
- Realization Accounts prepared to ascertain the profit or loss on realization
- The dissolution of a firm will not create a new partnership.