There are two method for dissolution of partnership firm :

(I) Normal Dissolution

(II) Dissolution by the court.

(I) Normal Dissolution/Dissolution without interference of Court :

It is as under :

(i) By agreement: When all partners agree to dissolve the firm, partnership firm can be dissolved at any point of time. It is voluntary dissolution.

(ii) Dissolution on happenings of certain contingencies :

(a) If arrangement for a fixed term, by the expiry of that term.
(b) If arrangement to carry out specific aim, by the completion thereof.

(iii) Dissolution by notice : Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.

(iv) Dissolution as per act : In the following conditions compulsory dissolution is taken place by the act.

(a) When all the partners of the firm become insolvent, or except one, all partners become insolvent.

(b) When business of firm becomes illegal, this also brings dissolution of a partnership firm. E.g. If a firm doing business of Tobacco and government put restriction through law on this business, then this business automatically become illegal and dissolve.

(c) When any partner becomes mental weak or due to his death. Partnership is going to end and firm dissolve.

(v) Dissolution as per contract: Dissolution of a partnership firm can be done on the basis of predetermined contract between the partners.