In a partnership firm one partner is solvent and rest all partner becomes insolvent. What will be the effect on partnership firm?

Dissolution of firm

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Dissolution of partnership

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Firm will continue to exist

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Both a & c

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Solution

The correct option is C Dissolution of firm
According to Section 41 of Indian partnership act, 1932, If in a partnership one partner is solvent and rest all partner becomes insolvent then it leads to compulsory dissolution of firm. The court orders in this case to dissolve the firm.

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