Give two circumstances under which partnership firm is dissolved
Answers
Answer:
A firm may be dissolved under the following circumstances: (a) Dissolution by Agreement (Section 40): A partnership firm can be dissolved by an agreement among all the partners. Section 40 of Indian Partnership Act, 1932 allows the dissolution of a partnership firm if all the partners agree to dissolve it
The firm might also be dissolved through judicial action. The Indian Partnership Act of 1932 gives the court the authority to dissolve a partnership in a variety of situations. As per Section 44, the following circumstances can trigger the court's power to dissolve a firm:
1. Partner of unsound mind
If the court discovers that one of the firm's partners is mentally ill, legal action will be pursued to dissolve the partnership.
2. The partner's incapacity or wrongdoing
When a partner becomes temporarily or permanently unable to perform his or her duties as a partner of the company, he or she is said to be incapacitated.