On the admission of a new partner, which of the following happens?

The correct answer is option 2- Old partnership is dissolved.

When a new partner is admitted to a partnership, the existing partnership firm continues to exist. The admission of a new partner does not dissolve the old partnership. Instead, it results in a change in the composition of the partnership. The partnership agreement may need to be amended to reflect the new partner's rights, duties, profit-sharing ratio, and other terms, but this does not dissolve the existing partnership firm. So, the correct answer is that the Old partnership is dissolved.