Question

State with reason whether at the time of admission of a partner, partnership is dissolved or partnership firm is dissolved.

Answer 1

Dissolution of partnership leads to an end to the partnership agreement between the partners and a new agreement is drafted. This does not affect the continuation of the business of the firm.

Whereas, Dissolution of partnership leads to the winding up of the firm and the business comes to an end.

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