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In which case can a firm be dissolved contingent upon an event?
- a)On the agreement of all partners
- b)Upon adjudication as insolvent of all partners
- c)By giving notice of dissolution
- d)On the completion of a fixed term or venture
Correct answer is option 'D'. Can you explain this answer?
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In which case can a firm be dissolved contingent upon an event?a)On th...
A firm can be dissolved contingent upon an event, such as the completion of a fixed term or a particular venture.
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In which case can a firm be dissolved contingent upon an event?a)On th...
Explanation:
Dissolution of a Firm Contingent upon an Event:
In the case where a firm can be dissolved contingent upon an event, it occurs upon the completion of a fixed term or venture. This means that the firm will automatically dissolve once the predetermined term or project is completed.
Reasoning:
- When a firm is established with a specific goal or project in mind, the partners may decide that the firm will cease to exist once that goal is achieved or the project is completed.
- This type of dissolution is predetermined and does not require any further action or agreement from the partners. It is an automatic process triggered by the occurrence of the specified event.
Legal Implications:
- Dissolution of a firm contingent upon an event is a valid and legally recognized method of ending a partnership.
- It provides clarity and certainty to all partners involved, as they are aware of the conditions under which the firm will be dissolved.
No Partner Consensus Needed:
- Unlike dissolution by agreement of all partners, which requires unanimous consent, dissolution contingent upon an event does not necessitate the agreement of all partners.
- This type of dissolution is based on a pre-set condition that was agreed upon at the establishment of the firm.
Conclusion:
In summary, a firm can be dissolved contingent upon an event, such as the completion of a fixed term or venture. This method of dissolution provides a clear and predetermined end date for the firm, without the need for unanimous agreement from all partners.
Dissolution of a Firm Contingent upon an Event:
In the case where a firm can be dissolved contingent upon an event, it occurs upon the completion of a fixed term or venture. This means that the firm will automatically dissolve once the predetermined term or project is completed.
Reasoning:
- When a firm is established with a specific goal or project in mind, the partners may decide that the firm will cease to exist once that goal is achieved or the project is completed.
- This type of dissolution is predetermined and does not require any further action or agreement from the partners. It is an automatic process triggered by the occurrence of the specified event.
Legal Implications:
- Dissolution of a firm contingent upon an event is a valid and legally recognized method of ending a partnership.
- It provides clarity and certainty to all partners involved, as they are aware of the conditions under which the firm will be dissolved.
No Partner Consensus Needed:
- Unlike dissolution by agreement of all partners, which requires unanimous consent, dissolution contingent upon an event does not necessitate the agreement of all partners.
- This type of dissolution is based on a pre-set condition that was agreed upon at the establishment of the firm.
Conclusion:
In summary, a firm can be dissolved contingent upon an event, such as the completion of a fixed term or venture. This method of dissolution provides a clear and predetermined end date for the firm, without the need for unanimous agreement from all partners.
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In which case can a firm be dissolved contingent upon an event?a)On the agreement of all partnersb)Upon adjudication as insolvent of all partnersc)By giving notice of dissolutiond)On the completion of a fixed term or ventureCorrect answer is option 'D'. Can you explain this answer?
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