Dissolution of a partnership firm may be ordered by the court on the following grounds:
(A) when a partner becomes insane.
(B) when a partner becomes permanently incapable of performing his duties as partner.
(C) when a partner acts in good faith
(D) when it is regarded just and equitable by the court.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- (A), (B) and (D) only.
Except (C) when a partner acts in good faith, all others are mode of dissolution by court.
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;
(b) when a partner becomes permanently incapable of performing his duties as a partner;
(c) when a partner is guilty of misconduct which is likely to adversely affect the business of the firm;
(d) when a partner persistently commits breach of partnership agreement;
(e) when a partner has transferred the whole of his interest in the firm to a third party;
(f) when the business of the firm cannot be carried on except at a loss; or
(g) when, on any ground, the court regards dissolution to be just and equitable.