Question

Choose the correct answers from the alternatives given.
In case of death of a partner ________.

• A. the firm is dissolved unless otherwise agreed
• B. the estate of deceased partner is liable for any act of the firm after the date of his death if no public notice is given
• C. both (A) & (B)
• D. none of these

Answer 1

Answer: (A)

the firm is dissolved unless otherwise agreed

A partnership firm can be dissolved on happening of certain contingencies. Such contingencies are made clear in section 42, which laid down that subject to contract between the partners, a firm is dissolved

1. if constituted for a fixed term, by the expiry of that term;

2. if constituted to carry out one or more adventures or undertakings, by the completion thereof;

3. by the death of a partner; and

4. by the adjudication of a partner as an insolvent.

However, it can be provided in the partnership agreement that the firm will not be dissolved in any of the circumstances mentioned above and if such provision is made in the agreement that is considered valid.