The dissolution of partnership cannot take place by which of the following way:
Answer & explanation
Correct answer: option 4
Correct answer: Option (4) → Solvency of a Partner
Concept: Dissolution of partnership (reconstitution) versus dissolution of firm, from Dissolution of Partnership Firm.
The existing partnership is dissolved by admission, retirement, death or the INSOLVENCY of a partner – each changes the relationship among partners. It is a partner’s insolvency, not his solvency, that triggers dissolution; a solvent partner causes no change at all. Hence “Solvency of a partner” cannot dissolve a partnership, making Option (4) correct.