Assertion (A): Admission of a partner means reconstitution of the partnership whereby old partnership ceases to exist and new partnership comes into existence.
Assertion (A): Admission of a partner means reconstitution of the partnership whereby old partnership ceases to exist and new partnership comes into existence.
Reason (R): When a partner is admitted, number of partners increase and also the profit sharing ratio changes. However, the firm continues, Thus, it is a reconstitution of partnership.
In the context of above two statements, which of the following is corrrect?
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
(b) Both, Assertion (A), and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(c) Assertion (A) is correct but the Reason (R) is not correct.
(d) Both Assertion (A) and Reason (R) are incorrect.
Anurag Pathak Changed status to publish June 8, 2023
Ans – b)
Admission of a partner means the reconstitution of the partnership as due to admission of a new partner profit sharing ratio changes and old partnership deed is canceled and new partnership deed is signed by all the partners. Thus it is the reconstitution of the partnership but firm continues.
Anurag Pathak Changed status to publish June 1, 2023
