CUET Preparation Today
What rights does a newly admitted partner acquire in the partnership firm? |
Right to change the existing profit sharing ratio among partners Right to withdraw their capital contribution at any time Right to dissolve the partnership and start a new business venture Right to share the assets and profits of the partnership firm |
Right to share the assets and profits of the partnership firm |
The correct answer is option 4- Right to share the assets and profits of the partnership firm. When firm requires additional capital or managerial help or both for the expansion of its business a new partner may be admitted to supplement its existing resources. According to the Partnership Act 1932, a new partner can be admitted into the firm only with the consent of all the existing partners unless otherwise agreed upon. With the admission of a new partner, the partnership firm is reconstituted and a new agreement is entered into to carry on the business of the firm. A newly admitted partner acquires two main rights in the firm 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. Moreover, in the case of an established firm which may be earning more profits than the normal rate of return on its capital the new partner is required to contribute some additional amount known as premium or goodwill. |
