Which statements are correct from the following regarding Partnership…

Which statements are correct from the following regarding Partnership?

A. When a partner dies, the combined share of the continuing partner's will increase.

B. In case of death of a partner, surviving partners may continue the business in the usual manner.

C. New Partner can bring capital in cash or kind.

D. The retiring partner is entitled to his share of goodwill at the time of retirement.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A, B, C and D

Admission, retirement and death all reconstitute a firm: the old agreement ends and the remaining or new partners carry on under a new one.

A. When a partner dies, the combined share of the continuing partner's will increase. Correct. The deceased partner's share does not disappear; it is taken over by the others, so their combined share rises by the share of the deceased partner.

B. In case of death of a partner, surviving partners may continue the business in the usual manner. Correct. Death ends the old partnership agreement, but the remaining partners may carry on the business under a new agreement after settling the amount due to the legal representatives.

C. New Partner can bring capital in cash or kind. Correct. A new partner brings an agreed capital either in cash or in the form of assets, such as machinery or stock.

D. The retiring partner is entitled to his share of goodwill at the time of retirement. Correct. Goodwill was built up by all the partners, so the retiring partner is compensated for his share of it by the partners who gain his share.

NCERT (2026-27 edition):
Admission of a New Partner – “… For the right to acquire share in the assets and profits of the partnership firm, the partner brings an agreed amount of capital either in cash or in kind.”

NCERT (2026-27 edition):
Treatment of Goodwill – “The retiring or deceased partner is entitled to his share of goodwill at the time of retirement/death because the goodwill has been earned by the firm with the efforts of all the existing partners.”

NCERT (2026-27 edition):
New Profit Sharing Ratio – “New profit sharing ratio is the ratio in which the remaining partners will share future profits after the retirement or death of any partner. The new share of each of the remaining partner will consist of his own share in the firm plus the share acquired from the retiring /deceased partner.”

NCERT (2026-27 edition):
Retirement/Death of a Partner – “… On the retirement or death of a partner, the existing partnership deed comes to an end, and in its place, a new partnership deed needs to be framed whereby, the remaining partners continue to do their business on changed terms and conditions.”