According to section _________ of the Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.
According to section _________ of the Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.
Solution
✅ Correct Option: 4
According to Section 39 of the Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.
This section makes a clear distinction between:
- Dissolution of Partnership → When the relationship between some partners changes (like when one partner retires, but the firm continues with remaining partners)
- Dissolution of Firm → When the partnership between all partners comes to an end, thereby terminating the firm's existence entirely
Section 39 specifically deals with the dissolution of the firm where the entire business is wound up and all partners cease to carry on business together.
Correct Option: 4 (Section 39)
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2023: 29 May Shift 2