Question

At the suit of a partner, the court may order a partnership firm to be dissolved when a partner becomes ________.

• A. Insolvent
• B. Adjudicated
• C. Insane
• D. Solvent

Answer 1

The correct option is C Insane

Dissolution of a partnership firm may take place without the intervention of court or by the order of a court, in any of the specified ways. It may be noted that dissolution of the firm necessarily brings in dissolution of the partnership. Dissolution of Court is one of the way which results in dissolution of a firm. 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;

(e) when a partner has transferred the whole of his interest in the firm to a a third party;

(f) when the business of the firm cannot be carried on except at a loss; or

(g) when, on any ground, the court regards dissolution to be just and equitable.