Question

92 On the admission of a new partner :
(A) Old firm is dissolved
(B) Old partnership is dissolved
(C) Both old partnership and firm are dissolved
(D) Neither partnership nor firm is dissolved

Answer 1

On the admission of a new partner (B) Old partnership is dissolved.

Explanation:

• A new partner is added when a firm needs different new ways to earn money i.e. to make more capital or they need someone to manage the project.

• A partnership Act was passed in 1932. It defines how such circumstances should be handled and controlled. This act states that any new partnership can only be formed if the existing parties or partners agree to it without any conflicts.