Question

A, B and C constituted a partnership to carry out a venture to build offices for Zakash Office Sites Ltd. On the completion of venture under which way the dissolution of a firm will takes place?

• A. On the happening of certain contingencies
• B. Dissolution by Court
• C. Dissolution by Notice
• D. Compulsory Dissolution

Hint:

A firm formed for one venture ends when the venture is complete. This is a contingency under Section 42.

Answer 1

The Correct Option is A

Step 1: Understand the facts
The partnership was formed for one single venture, which is building offices for one client. Such a firm is called a partnership for a particular venture.

Step 2: Recall the rule
Under Section 42 of the Indian Partnership Act, 1932, a firm is dissolved by the happening of certain contingencies, unless there is a contract to the contrary. One of these contingencies is the completion of the venture for which the firm was formed.

Step 3: Check option 1
The completion of the venture is a contingency listed in Section 42, so the firm dissolves on that event. Option 1 is correct.

Step 4: Check option 2
Dissolution by court needs an order of the court on grounds such as unsound mind of a partner or persistent breach of agreement. Nothing like that is stated here, so option 2 is wrong.

Step 5: Check option 3
Dissolution by notice applies to a partnership at will, when a partner gives notice of dissolution. This firm was for a fixed venture, not at will, so option 3 is wrong.

Step 6: Check option 4
Compulsory dissolution takes place when all partners become insolvent or when the business becomes unlawful. Neither is stated, so option 4 is wrong.

Final Answer:
The firm dissolves on the completion of the venture, which is a contingency. This is option 1. \[ \boxed{\text{Option 1}} \]