A partnership is not dissolved when..........
Answer & explanation
Correct answer: option 1
The correct answer is option 1- A new partner is admitted into firm.
Note: The given answer is as per NTA. However, there is an error in the wording of the question. On admission of a new partner, the existing partnership is dissolved, but the firm is not dissolved; it is only reconstituted. Therefore, instead of the word “partnership,” the correct term should be “firm” or “partnership firm” for Option (1) to be correct.
A partnership firm is not dissolved when a new partner is admitted into firm as on admission of a partner reconstitution of the firm takes place.
Reconstitution of the partnership firm takes place in the following ways-
* Admission of a new partner
* Change in profit sharing ratio
* Retirement of a partner
* Death of a partner