Dissolution of a partnership firm may be ordered by the court on the following grounds:
(A) when a partner becomes insane.
(B) when a partner becomes permanently incapable of performing his duties as partner.
(C) when a partner acts in good faith
(D) when it is regarded just and equitable by the court.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (D) only
The court may dissolve a firm, on the suit of a partner, only on the grounds given in the Partnership Act. These grounds are about a partner who can no longer work for the firm or harms it, a business that cannot go on except at a loss, and any ground the court thinks just.
(A) when a partner becomes insane. Correct. Insanity of a partner is the first ground for dissolution by the court.
(B) when a partner becomes permanently incapable of performing his duties as partner. Correct. A partner who is permanently unable to do his duties gives the court a ground to dissolve.
(C) when a partner acts in good faith Incorrect. Acting in good faith is what every partner is expected to do. The ground in the Act is the opposite: a partner who is guilty of misconduct that is likely to harm the business.
(D) when it is regarded just and equitable by the court. Correct. The court may dissolve the firm on any ground it regards just and equitable.
NCERT (2026-27 edition):
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