The correct answer is: C. Death of a partner.
In Garner v. Murray, the court held that the death of a partner does not automatically dissolve the partnership. The surviving partners have the option to continue the partnership, or to dissolve it and distribute the assets among the partners. If the surviving partners choose to continue the partnership, the deceased partner’s estate is entitled to its share of the partnership profits, as well as its share of the partnership assets.
The other options are incorrect because they do not result in the automatic dissolution of a partnership. When a new partner is admitted to a partnership, the partnership is not dissolved. When a partner retires from a partnership, the partnership is not dissolved unless the remaining partners agree to dissolve it. When a partner becomes insolvent, the partnership is not dissolved unless the remaining partners agree to dissolve it.
Here is a brief explanation of each option:
- Admission of a new partner: When a new partner is admitted to a partnership, the partnership is not dissolved. The new partner becomes a co-owner of the partnership assets and liabilities, and is entitled to a share of the partnership profits.
- Retirement of a partner: When a partner retires from a partnership, the partnership is not dissolved unless the remaining partners agree to dissolve it. The retiring partner is entitled to be paid the fair value of his or her interest in the partnership.
- Death of a partner: When a partner dies, the partnership is not dissolved automatically. The surviving partners have the option to continue the partnership, or to dissolve it and distribute the assets among the partners. If the surviving partners choose to continue the partnership, the deceased partner’s estate is entitled to its share of the partnership profits, as well as its share of the partnership assets.
- Insolvency of a partner: When a partner becomes insolvent, the partnership is not dissolved unless the remaining partners agree to dissolve it. The insolvent partner’s interest in the partnership is transferred to his or her creditors, and the creditors become partners in the partnership.