Chapter No. 7 – Dissolution of a Partnership Firm – Solution – Class 12 of the all practical problems with the animation and videos. First, we will clarify the meaning of the term of Dissolution of a Partnership Firm shown as following:
Meaning of Dissolution of a Partnership Firm: –
Dissolution of Partnership Firm means the discontinuation of the operation of the firm or Closing down or wound up the operation of the Partnership Firm. In this situation, all assets of the firm will be sold, all liabilities paid off and the balance of capital and current account will be adjusted with the available cash balance(if any).
According to Section 39 of the Indian Partnership Act, 1932: –
“Dissolution of the firm means dissolution of partnership among all the partners in the firm.”
Methods of Dissolution of A Firm: –
The methods by which a firm can be dissolved shown as following: –
- All Partners’ Mutual Agreement.
- Compulsory Dissolution by Law.
- Notice to all partners by one partner
- On some special events
- By Court Order.
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Chapter No. 7 – Dissolution of a Partnership Firm – Solution – Class 12