Which among the following are the modes of dissolution?
A. Dissolution by Nature
B. Compulsory Dissolution
C. Dissolution by Agreement
D. Dissolution by Notice
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → B, C and D only
The Indian Partnership Act lays down the ways in which a firm is dissolved: by agreement, compulsorily, on the happening of certain contingencies, by notice (partnership at will) and by the court.
A. Dissolution by Nature — Incorrect. There is no such mode; a firm does not end by itself, only in one of the ways laid down by the Act.
B. Compulsory Dissolution — Correct. A firm must be dissolved when all partners, or all but one, become insolvent or when its business becomes illegal.
C. Dissolution by Agreement — Correct. A firm is dissolved with the consent of all the partners or under a contract between them.
D. Dissolution by Notice — Correct. In a partnership at will, any partner may dissolve the firm by giving written notice to the others.
NCERT (2026-27 edition):
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