Which combination of statements is true about dissolution-

(A) Dissolution of a partnership is different from dissolution of a firm.

(B) A partnership is dissolved when there is a death of a partner.

(C) A firm is dissolved when all partners give consent to it.

(D) A firm is compulsorily dissolved when a partner decides to retire.

Choose the correct answer from the options given below:

Dissolution of Partnership vs Dissolution of Firm are two distinct concepts that need to be understood clearly.

Dissolution of Partnership occurs when the relationship between partners changes, but the firm may continue. This happens during admission, retirement, or death of a partner.

Dissolution of Firm occurs when the business is completely wound up and all partners cease their relationship.

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Analyzing each statement:

(A) Dissolution of a partnership is different from dissolution of a firm - TRUE

As explained above, these are fundamentally different. Partnership dissolution is reconstitution; firm dissolution is complete closure.

(B) A partnership is dissolved when there is a death of a partner - TRUE

Death of a partner causes dissolution of partnership (the existing partnership relationship ends). However, the firm may continue with the remaining partners if they wish.

(C) A firm is dissolved when all partners give consent to it - TRUE

This is called dissolution by agreement. When all partners mutually agree, the firm can be dissolved at any time.

(D) A firm is compulsorily dissolved when a partner decides to retire - FALSE

Retirement only causes dissolution of partnership, not the firm. The firm can continue with remaining partners. Compulsory dissolution occurs only in specific situations like insolvency of all partners or business becoming illegal.

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Since statements (A), (B), and (C) are true, Option 2 is correct.