X, Y and Z are partners in a firm. If M is admitted as a new partner, what would be its implication?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Old partnership would be reconstituted
Admission of a partner changes the agreement among the partners, so the old partnership ends and a reconstituted partnership takes its place; the firm itself is not dissolved and goes on with its business. The firm gets a new member, not a new existence.
NCERT (2026-27 edition):
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