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easyMCQCUET Accountancy 2025 13 May Shift 22026Accountancy
1 mark

When the business of a partnership firm becomes illegal due to changes in regulations or laws, it leads to dissolution under which category?

  1. A
    Compulsory dissolution
  2. B
    Dissolution by the Court
  3. C
    Dissolution by agreement
  4. D
    Dissolution on the happening of certain contingencies

Solution & Step-by-step Explanation

Under Section 41 of the Indian Partnership Act, 1932, a firm is dissolved compulsorily if the business of the firm becomes unlawful or illegal due to any event or change in legislation.

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When the business of a partnership firm becomes illegal due to changes in regulations or laws, it leads to dissolution under which category?
A
Compulsory dissolution
B
Dissolution by the Court
C
Dissolution by agreement
D
Dissolution on the happening of certain contingencies

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