Which amongst the following is not a ground for dissolution of partnership firm on happening of certain contingencies?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → When a partner becomes insane
Subject to the contract between the partners, a firm is dissolved automatically on certain contingencies: the expiry of the fixed term, the completion of the venture, the death of a partner and the adjudication of a partner as an insolvent. A partner becoming insane does not dissolve the firm by itself; it is a ground on which the court may order dissolution at the suit of a partner.
Option (1) If constituted for a fixed term, by the expiry of that term. — A ground on the happening of a contingency.
Option (2) When a partner becomes insane — Correct. This is a ground for dissolution by the court, not on the happening of a contingency.
Option (3) By death of a partner — A ground on the happening of a contingency.
Option (4) By adjudication of a partner as an insolvent. — A ground on the happening of a contingency.
NCERT (2026-27 edition):
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