· Change in the existing profit sharing ratio
· Admission of a Partner
· Retirement or Death of a Partner
· Insolvency of a partner.
· Expiry of the term of the partnership.
· Completion of the specified venture.
· Dissolution by agreement.
a. without the order of the court and
b. By order of the court.
A firm may be dissolved when all the partners agree to close the affairs of the firm. Just as a partnership is created by contract, it can also be terminated by contract.
If any of the partners adjudged an insolvent (or if all the partners become insolvent) it is necessary to dissolve the firm.
When the business carried on by the partnership becomes illegal, the partnership firm is automatically dissolved.
In the case of partnership at will when any partner gives in writing to all the other partners indicating his intention to dissolve the firm, the firm will be dissolved.
Dissolution of partnership itself may involve the dissolution of the firm unless parties agree to continue it otherwise, it will take place.
a. On the expiry of a specified period in case of partnership for a fixed term.
b. On the completion of a particular adventure for which it has been formed
c. in case of particular partnership.
d. On the death of a partner.
e. On the retirement of a partner.
f. On the insolvency of a partner.
In all the above cases if the business is not continued by the remaining partners, dissolution of the firm takes place automatically.
The court may order dissolution of a firm at a suit of a partner in any of the following circumstances.
a. When a partner becomes insane
b. Permanent incapacity of any partner
c. Misconduct of any partner
d. Breach of agreement which makes the business impracticable
e. Transfer of interest to third person
f. Continued loss
g. When the court finds that it is just and equitable to dissolve the firm