In which of the following case court can order dissolution of a partnership firm.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → When business cannot be carried on except at a loss
Dissolution by the court is ordered on the suit of a partner, on grounds such as a partner’s insanity or misconduct, or when the business cannot be carried on except at a loss. The other options dissolve the firm without any court order.
Why the other options are incorrect
Option (1) On the death of a partner — Incorrect. Death of a partner dissolves the firm on the happening of a contingency, subject to the contract; no court is needed.
Option (2) On the expiry of term of partnership — Incorrect. A firm formed for a fixed term is dissolved by the expiry of that term, again a contingency.
Option (4) When a partner become insolvent — Incorrect. Insolvency of a partner is a contingency; and when all or all but one partner become insolvent, dissolution is compulsory. Neither needs a court order.
NCERT (2026-27 edition):
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