According to Section 39 of the Partnership Act 1932, the dissolution of a firm occurs when:
Answer & explanation
Correct answer: option 2
According to Section 39 of the Partnership Act 1932, the dissolution of a firm refers to the dissolution of the partnership between all the partners. It occurs when all partners collectively decide to end their partnership and cease the business operations of the firm. This decision can be made due to various reasons such as mutual agreement, expiration of the partnership term, completion of the partnership's objective, or any other event specified in the partnership agreement.