Question : A partnership firm is compulsorily dissolved:
Option 1: When the business of the firm is declared illegal
Option 2: When a partner of the firm dies
Option 3: When a partner of the firm becomes insolvent
Option 4: When a partner transfers his share to some other person without the consent of other partners
Correct Answer: When the business of the firm is declared illegal
Solution : Answer = When the business of the firm is declared illegal.
A partnership firm is compulsorily dissolved when the business conducted by the firm is declared illegal by authorities. In such cases, the continuation of the firm becomes untenable, leading to the automatic dissolution of the partnership.
Hence, the correct option is 1.
