Dissolution of partnership
It may be defined as a change in the relation of partners, and in this case, the firm, as a whole, is not closed but only the relations between some of the partners come to an end and the remaining partners continue to carry on the business. A partnership is a particular relationship between the partners. Whenever a firm is reconstituted, the particular relationship comes to an end and the partnership is dissolved, but the firm continues. So admission, retirement or death etc. of a partner or even a change in mutual terms of the partners would amount to the dissolution of partnership.
X and Y were partners in a firm. After some time, Z was admitted as a new partner in the firm. In this case, the partnership between X and Y is dissolved and a new partnership between X, Y and Z comes into existence.