Which of the following are the ways for the dissolution of a firm? (A…

Which of the following are the ways for the dissolution of a firm?

(A) Dissolution by Notice

(B) Dissolution by agreement

(D) Dissolution by not terminating business

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A), (B) and (C) only

A firm can be dissolved in the ways laid down in the Indian Partnership Act: by agreement, compulsorily, on certain contingencies, by notice and by the court.

(A) Dissolution by Notice Correct. In a partnership at will, any partner can dissolve the firm by giving written notice to the others.

(B) Dissolution by agreement Correct. The firm is dissolved with the consent of all the partners or under a contract between them.

(C) Dissolution by court Correct. On the suit of a partner, the court may order dissolution, for example when a partner becomes insane.

(D) Dissolution by not terminating business Incorrect. Dissolution of a firm means its business comes to an end; carrying on the business is the opposite of dissolution, so this is not a mode at all.

NCERT (2026-27 edition):
Dissolution of a Firm – “… 1. Dissolution by Agreement: A firm is dissolved : (a) with the consent of all the partners or (b) in accordance with a contract between the partners.”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 4. Dissolution by Notice: In case of partnership at will, the firm may be dissolved if any one of the partners gives a notice in writing to the other partners, signifying his intention of seeking dissolution of the firm.”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 5. Dissolution by Court: At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds: (a) when a partner becomes insane; …”