Which of the following is not a mode of reconstitution of a partnership firm?
Answer & explanation
Correct answer: option 4
Correct answer: Option (4) → Dissolution of partnership firm
Concept: Modes of reconstitution of a partnership firm, per Reconstitution of a Partnership Firm – Retirement/Death of a Partner.
Reconstitution means the firm CONTINUES its business under changed terms – through admission of a partner, change in the profit sharing ratio, or retirement/death of a partner. Dissolution of a firm, by contrast, ENDS the business and closes the books, so the firm does not continue. Hence dissolution is not a mode of reconstitution, making Option (4) correct.