“Dissolution of a partnership firm may occur by mutual agreement with the consent of the majority of partners, while compulsory dissolution requires an order from the court." Discuss this statement with reference to the relevant provisions of the Indian Partnership Act, 1932.
Dissolution by Agreement (Section 40 of the Indian Partnership Act, 1932): \nSection 40 gives right to the partners to dissolve the partnership by agreement with the consent of all the partners or in accordance with a contract between the partners. ‘Contract between the partners’ means a contract already made. \nHence, the statement ‘dissolution of a firm by the consent of the majority of the partners is not correct unless otherwise provided in a contract between them. \n(iii) Compulsory dissolution (Section 41):\nA firm is compulsorily dissolved by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership. \nHence, the statement ‘compulsory dissolution requires an order from the court’ is not correct.
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