Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

Which of the following is not a case of dissolution of a partnership firm on happening of certain contingencies?

Options:

When a partner dies

When the business of the firm becomes illegal

By the completion of one or more ventures for which the partnership is formed

By the adjudication of a partner as an insolvent.

Correct Answer:

When the business of the firm becomes illegal

Explanation:

The correct answer is option 2- When the business of the firm becomes illegal.

* When the business of the firm becomes illegal is a case of compulsory dissolution.

Under certain circumstances, a partnership firm may be dissolved based on the following contingencies subject to contract between the partners:
(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.