Dissolution by Court may take place:

The correct answer is Option (3) - when a partner becomes permanently incapable of performing his duties as a partner.

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.

 

OTHER OPTIONS

• with the consent of all the partners  and in accordance with a contract between the partners- Dissolution by agreement.

• when all the partners or all but one partner, become insolvent- Compulsory Dissolution.