CUET Preparation Today
Anita and Rahul are partners running a business. They decide to bring Sneha as a new partner. What happens to the partnership when Sneha is admitted? |
The old firm is dissolved The existing partnership is reconstituted Both the old firm and old partnership are dissolved The firm's assets are realised |
The existing partnership is reconstituted |
The correct answer is Option (2) - The existing partnership is reconstituted. When a partnership firm undergoes reconstitution, it implies there are changes in the existing partnership agreement, such as the admission of new partners, retirement of existing partners, or changes in profit-sharing ratios. Thus, on the admission of the partner Sneha, old partnership is reconstituted. |
