On 31.12.2007, it was decided to discontinue the business, due to heavy losses.a)The firm will be dissolved on receipt of permission from Court.b)The firm will be dissolved by mutual consent of allc)The firm cannot be dissolved before 01.01.2008.d)The firm will not be dissolvedCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Given Information:
On 31.12.2007, it was decided to discontinue the business, due to heavy losses.
Explanation:
To determine the outcome regarding the dissolution of the firm, we need to analyze the given options and their implications.
Option A: The firm will be dissolved on receipt of permission from Court.
- This option suggests that the firm can only be dissolved upon receiving permission from the court.
- There is no mention of any court involvement in the given information, so this option is not applicable.
Option B: The firm will be dissolved by mutual consent of all.
- This option states that the firm will be dissolved if all parties involved agree to it.
- Since it was decided to discontinue the business due to heavy losses, it can be assumed that all parties would agree to the dissolution.
- Therefore, this option seems valid and is the most likely answer.
Option C: The firm cannot be dissolved before 01.01.2008.
- This option suggests that there is a specific date before which the firm cannot be dissolved.
- However, there is no mention of any such date in the given information, so this option is not applicable.
Option D: The firm will not be dissolved.
- This option contradicts the given information, which states that the business will be discontinued due to heavy losses.
- Therefore, this option is not valid.
Conclusion:
Based on the given information and the analysis of the options, it can be concluded that option B, 'The firm will be dissolved by mutual consent of all,' is the most suitable answer.

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