Concept: A partnership may be dissolved when a partner can no longer legally continue the business relationship.
Explanation:Partnership dissolution occurs when the partnership agreement comes to an end.
This can happen due to events affecting the partners themselves.
Examples include death of a partner, insanity of a partner, bankruptcy of a partner, or a joint decision by the partners.
The resignation of an ordinary employee does not dissolve a partnership.
Liquidity of the firm simply means having enough cash and is not a ground for dissolution.
The option "death of the employee" is wrong because the death of a partner is the relevant ground, not an employee.
Among the options given, insanity of a partner is a valid reason for dissolution.
Answer: D. insanity of a partner