Dissolution is the last stage of liquidation, the process by which a company (or part of a company) is

brought to an end, and the assets and property of the company redistributed.
Dissolution of a partnership is the first of two stages in the termination of a partnership.[1] "Winding
up" is the second stage.[1][2]
Dissolution may also refer to the termination of a contract or other legal relationship; for example,
a divorce is the dissolution of a marriage.
Dissolution is also the term for the legal process by which an adoption is reversed. While this applies
to the vast majority of adoptions which are terminated, they are more commonly referred to
as disruptions, even though that term technically applies only to those that are not legally complete
at the time of termination.
In international law, dissolution (Latin: dismembratio) is when a state has broken up into several
entities, and no longer has power over those entities, as it used to have previously. An example of
this is the case of the former USSR dissolving into different republics.

According to sec.4 of the Indian Partnership Act 1932, “Partnership is the relation between persons who
have agreed to share the profits of a business carried on by all of them or any of them acting for all.”
Persons who have entered into a partnership are called individually ‘partners’ and collectively a ‘firm’.
Dissolution of a firm means a firm ceases to exist. The relationship existing between the partners
discontinues. The whole firm is dissolved and the partnership terminates. The dissolution of a partnership
between all the partners of the firm is called the

‘DISSOLUTION OF THE FIRM’

[sec.39].Dissolution puts an end to the right of the partners to existing as a going concern and is followed
by its liquidation. Dissolution of a firm is different from the dissolution of a partnership. Dissolution of the
partnership involves a change in the relationship between partners and a new firm is reconstituted. For
eg:- A, B and C are partners in the firm and C retires. The partnership between A, B and C come to an
end and partnership between A and B comes into being. Thus retirement of a partner does not dissolve
the firm. It merely severs the relation between retiring partner and continuing partners.

The entire procedure for bringing a lawful end to the life of a company is divided into two stages. These
two stages are winding up and dissolution. Winding up of a company is defined as a process by which the
life of a company is brought to an end and its property administered for benefit of its members and
creditors. It is the last stage, putting an end to the life of a company. The main purpose of winding up is to
realize the assets and make the payments of the company’s debts fairly. Thus, winding up is the process
by which management of a company’s affairs is taken out of its directors, its assets are realized by a
liquidator and its debts are discharged out of proceeds of realization.