Dissolution of a firm takes place on the happening of certain contingencies in the following cases:
(A) By the death of a partner
(B) By the adjudication of a partner as an insolvent
(C) When the business of the firm becomes illegal
(D) If constituted for a fixed term, by the expiry of that term
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- (A), (B) and (D) only.
(A) By the death of a partner- On the happening of certain contingencies.
(B) By the adjudication of a partner as an insolvent- On the happening of certain contingencies.
(C) When the business of the firm becomes illegal- Compulsory Dissolution.
(D) If constituted for a fixed term, by the expiry of that term- On the happening of certain contingencies.
NCERT: On the happening of certain contingencies: Subject to contract between the partners, a firm is dissolved :
(a) if constituted for a fixed term, by the expiry of that term;
(b) if constituted to carry out one or more ventures, by the completion thereof;
(c) by the death of a partner;
(d) by the adjudication of a partner as an insolvent.