Question:
Write any two circumstances when a court can issue order for dissolution of a firm.
Write any two circumstances when a court can issue order for dissolution of a firm.
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Courts dissolve firms mainly due to incapacity, misconduct, breach or impracticability.
Updated On: Nov 30, 2025
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Solution and Explanation
A court may order dissolution of a firm under several circumstances. First, when a partner becomes permanently incapable of performing his duties due to illness, insanity or disability, dissolution may be granted. Second, if a partner is guilty of misconduct that negatively affects the business, the court may intervene. Third, if a partner continuously breaches the partnership agreement or acts in a manner that makes business operations impossible, dissolution can be ordered. Fourth, continued losses or the business becoming illegal may also lead the court to dissolve the firm. Any two of these situations are acceptable.
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