Assertion: On retirement, the old partnership agreement comes to an end and a new partnership agreement comes into existence between the remaining partners.
Reasoning: Retirement of the partnership leads to the reconstitution of the firm.
Answer & explanation
Correct answer: option 1
Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A as retirement makes the reconstitution of the firm not dissolution. A new agreement comes into force.