A firm is dissolved at the time of
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Insolvency of a partner
Admission, retirement and any other change among the partners only reconstitute the firm: the old partnership ends but the firm carries on its business. Subject to the partners’ contract, the Partnership Act dissolves the firm itself when a partner is adjudged insolvent.
Option (1) Admission of a partner — Incorrect. The firm continues with the new partner; only the partnership is reconstituted.
Option (2) Retirement of a partner — Incorrect. The remaining partners carry on the business, so the firm is not dissolved.
Option (3) Reconstitution of partnership firm — Incorrect. Reconstitution changes the relationship among the partners while the firm goes on.
NCERT (2026-27 edition):
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