Which of the following is not a case of dissolution of a partnership firm on happening of certain contingencies?
Answer & explanation
Correct answer: option 2
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.