When a firm is dissolved with the consent of all the partners, it is called:

When a partnership firm is dissolved with the consent of all the partners, it is called Dissolution by Agreement.

Under the Partnership Act, partners have the freedom to dissolve their firm at any time through mutual agreement. Since partnership is founded on mutual consent, all partners can collectively decide to end the partnership, regardless of whether the firm is running profitably or not.

The other types of dissolution differ in their nature:

Compulsory Dissolution occurs due to events specified by law, such as when all partners (or all but one) become insolvent, or when the business becomes unlawful.

Dissolution by Notice applies only to partnerships at will, where any single partner can give written notice to dissolve the firm without needing consent from others.

Dissolution by Court happens when a court orders dissolution based on specific grounds like a partner's insanity, misconduct, persistent breach of agreement, or when the court deems it just and equitable to dissolve.

The distinguishing feature here is mutual consent of all partners, which is the defining characteristic of Dissolution by Agreement.