Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

When the court cannot pass the order to dissolve the partnership firm?

Options:

Partner transfer the whole of its interest to a third party

Partnership agreement persistently followed by partners

Business of the firm cannot be carried except at a loss

Partners become incapable permanently

Correct Answer:

Partnership agreement persistently followed by partners

Explanation:

Dissolution by Court: At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:
(a) when a partner becomes insane;
(b) when a partner becomes permanently incapable of performing his duties as a partner
(c) when a partner is guilty of misconduct which is likely to adversely affect the business of the firm;
(d) when a partner persistently commits breach of partnership agreement;
(e) when a partner has transferred the whole of his interest in the firm to a third party;
(f) when the business of the firm cannot be carried on except at a loss; or
(g) when, on any ground, the court regards dissolution to be just and equitable