Question

A, B and C are partners in a firm. If D is to be admitted as a new partner, then the _________________.

• A. Old partnership needs to be dissolved
• B. Old firm needs to be dissolved
• C. Both old firm and partnership need to be dissolved
• D. Neither firm nor partnership need to be dissolved

Answer 1

Answer: (A)

Old partnership needs to be dissolved

At the time of admission of a partner, only the partnership is dissolved and the firm is reconstituted to draft a new partnership agreement. There is no effect on the business of the firm.