A, B and C are partners in a firm. If D is admitted as a new partner :

Old partnership is reconstituted

The correct answer is option 3- Old partnership is reconstituted.

When a new partner is admitted to an existing partnership, it means that the existing partnership undergoes a change in its composition. The admission of a new partner does not mean the end of the existing partnership. Instead, the partnership continues its operations with the addition of the new partner. with new terms and conditions.

Reconstitution of the partnership firm takes place in the following ways-
* Admission of a new partner
* Change in profit sharing ratio
* Retirement of a partner
* Death of a partner