Match List-I with List-II List-I List-II (A) Compulsory Dissolution (…

Match List-I with List-II

List-I	List-II
(A) Compulsory Dissolution	(I) A partner persistently commits breach of partnership agreement.
(B) Happening of contingencies	(II) Death of a partner
(C) Dissolution by Court	(III) According to contract between the partners.
(D) Dissolution by agreement	(IV) Business becomes illegal

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A)-(IV), (B)-(II), (C)-(I), (D)-(III)

A firm is dissolved in one of five ways, and each List-II event belongs to one of them.

(A) Compulsory Dissolution — this matches (IV) Business becomes illegal. When the business becomes illegal (or all partners, or all but one, become insolvent) the firm must close, whatever the partners want.

(B) Happening of contingencies — this matches (II) Death of a partner. Subject to the contract, the firm is dissolved on the expiry of its term, the completion of its venture, the death of a partner or a partner's insolvency.

(C) Dissolution by Court — this matches (I) A partner persistently commits breach of partnership agreement. On a partner's suit the court may dissolve the firm when a partner persistently breaks the agreement, besides insanity, misconduct and the other listed grounds.

(D) Dissolution by agreement — this matches (III) According to contract between the partners. The partners end the firm themselves, with the consent of all or in accordance with a contract between them.

NCERT (2026-27 edition):
Dissolution of a Firm – “… 2. Compulsory Dissolution: A firm is dissolved compulsorily in the following cases: (a) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract; (b) when the business of the firm becomes illegal; or …”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 3. On the happening of certain contingencies: Subject to contract between the partners, a firm is dissolved : (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.”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 5. 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; …”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 1. Dissolution by Agreement: A firm is dissolved : (a) with the consent of all the partners or (b) in accordance with a contract between the partners.”