CUET Preparation Today
A, B and C are partners in a firm. If D is admitted as a new partner, what will be its affect? |
Old firm is dissolved Old firm and old partnership is dissolved Old partnership is reconstituted Firm will lose its existence |
Old partnership is reconstituted |
The correct answer is option 3- Old partnership is reconstituted. If M is admitted as a new partner, Old partnership would be reconstituted. When a new partner (D) is admitted into a partnership, the existing partnership (between A, B & C) is reconstituted because the agreement between the existing partners changes. However, the firm itself does not necessarily dissolve unless the partners decide to dissolve it. The admission of a new partner leads to a new agreement among all partners (old + new), but the business can continue under the same name and entity. |
