Dissolution of a firm takes place on the happening of certain contingencies in the following cases:(A) By the death of a partner
(B) By the adjudication of a partner as an insolvent
(C) When the business of the firm becomes illegal
(D) If constituted for a fixed term, by the expiry of that termChoose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
According to Section 42 of the Indian Partnership Act, 1932, subject to a contract between the partners, a firm is dissolved on the occurrence of specific contingencies:Expiry of a fixed term (D)Completion of specific venturesDeath of a partner (A)Adjudication of a partner as insolvent (B)Illegal business activities (C) trigger Compulsory Dissolution under Section 41, rather than being classified as dissolution on the happening of general operational contingencies. Therefore, the choice identifying contingencies includes (A), (B), and (D) only.