According to Section 39 of the Partnership Act 1932, the dissolution of a partnership between all the partners of a firm is called the dissolution of the firm.
This section specifically states that when the entire partnership relationship ends between all partners, it results in the dissolution of the firm itself. This is different from situations where only one partner leaves while others continue (which would be dealt with under different sections).
The distinction is important:
- Dissolution of partnership → one or more partners leave, but the firm may continue
- Dissolution of firm → partnership ends completely among all partners
Correct Option: 4