Why is a new partner is admitted? (Answer in one sentence)
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When a company requires additional capital or managerial assistance or both a new partner may be admitted to complement its existing resources in order to grow its business.
- Under the Partnership Act 1932, a new partner may only be admitted to the partnership with the agreement of all current partners, unless decided otherwise.
- The partner brings an agreed amount of capital either in cash or in kind to the right to gain share in the partnership firm's wealth and profits.
- When a company requires additional capital or managerial assistance or both may be admitted to a new partner to complement its existing resources in order to grow its business.
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