What happens at the dissolution of a partnership?

• A. The partnership expands its operations.
• B. The partnership enters into a new business venture.
• C. Partnership begins winding up.
• D. The partnership immediately terminates without any process.

Answer: (C)

Dissolution marks the end of the partnership’s ordinary operations and starts the winding-up process. Once dissolved, the partnership does not keep doing business as normal; instead, it gathers its assets, converts them to cash if needed, and uses that money to pay off debts and liabilities. After all obligations are satisfied, any remaining assets are distributed among the partners according to the partnership agreement or applicable law. Only after completing this winding-up phase does the partnership truly come to an end. So beginning the winding-up process best captures what happens at dissolution. Expanding operations or starting a new venture would keep the business active, and terminating immediately without any process ignores the required liquidation steps.