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:
- A\text{(A), (B) and (D) only}
- B\text{(A), (B) and (C) only}
- C\text{(B), (C) and (D) only}
- D\text{(A), (C) and (D) only}
Solution & Step-by-step Explanation
Let's assess each statement:(A) True: Dissolution of partnership implies a change in the internal relationship among partners (reconstitution), whereas dissolution of the firm terminates all business operations completely.(B) True: Unless explicitly specified in the contract, a partnership is legally dissolved upon the demise of a partner.(C) True: A firm can be dissolved smoothly with the mutual consent of all existing partners.(D) False: A partner's retirement results in the dissolution of the partnership (reconstitution), not compulsory structural dissolution of the business firm itself.Hence, (A), (B), and (C) are the correct statements.