CUET Preparation Today
What happens to the business when a partnership dissolves? |
The business must be shut down immediately The business continues as before The business can only continue if a new partner is admitted The business can only continue if the partnership is formed for a specific period of time |
The business continues as before |
The correct answer is option 2- The business continues as before. When a partnership dissolves The business continues as before. The reconstitution of a partnership firm which takes place on account of admission, retirement or death of a partner. In such a situation while the existing partnership is dissolved, the firm may continue under the same name if the partners so decide. In other words, it results in the dissolution of a partnership but not that of the firm. Dissolution of Partnership changes the existing relationship between partners but the firm may continue its business as before. |
