The Court may order a partnership firm to be dissolved in which of the following case?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → When a partner becomes insane
Dissolution by the court happens at the suit of a partner, on grounds that the court must weigh, and the insanity of a partner is the first ground listed.
Option (1) When the business of the firm becomes illegal — Incorrect. This is compulsory dissolution: the firm is dissolved by law itself, with no suit needed.
Option (2) On the death of a partner — Incorrect. Death is a contingency on which the firm is dissolved, subject to the contract between the partners.
Option (4) On the expiry of the term of the partnership — Incorrect. Expiry of the term is also a contingency; the firm ends because its agreed period is over.
NCERT (2026-27 edition):
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