The dissolution of partnership may take place in any of the following ways except:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Expansion of the business
Dissolution of partnership means the existing relationship among the partners changes, while the firm may carry on. It happens whenever the agreement among the partners changes: a change in ratio, admission, retirement, death or insolvency of a partner, and so on. Expanding the business does not change the partners or their agreement, so it does not dissolve the partnership.
Option (1) Change in existing profit sharing ratio — A way of dissolution of partnership. The old agreement ends and a new one takes its place.
Option (2) Admission of a new partner — A way of dissolution of partnership. A new relationship is formed with the incoming partner.
Option (3) Death of a partner — A way of dissolution of partnership. The relationship with the deceased partner comes to an end.
NCERT (2026-27 edition):
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