CUET Preparation Today
X, Y and Z are partners in a firm. If M is admitted as a new partner, what would be its implication? |
Old firm would be dissolved Old firm and old partnership would be dissolved Old partnership would be reconstituted Nothing is affected |
Old partnership would be reconstituted |
The correct answer is option 3- Old partnership would be reconstituted. If M is admitted as a new partner, Old partnership would be reconstituted. When a new partner (M) is admitted into a partnership, the existing partnership (between X, Y, and Z) is reconstituted because the agreement between the existing partners changes. However, the firm itself does not necessarily dissolve unless the partners decide to dissolve it. The admission of a new partner leads to a new agreement among all partners (old + new), but the business can continue under the same name and entity. |
