Asked by Chetan Aggarwal on May 05, 2024
Verified
The admission of a new partner results in the legal dissolution of the existing partnership and the beginning of a new partnership.
Legal Dissolution
The process of legally dissolving a company, terminating its existence by the law.
New Partner
An individual who joins an existing partnership, contributing capital, and sharing in profits, losses, and liabilities.
- Know how the admission of new partners or the retirement of existing partners affects partnership accounting and legal standing.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
True
Explanation :
According to traditional partnership law, the admission of a new partner into an existing partnership results in the dissolution of the old partnership and the formation of a new partnership, as the original partnership agreement is altered to include the new partner.
Learning Objectives
- Know how the admission of new partners or the retirement of existing partners affects partnership accounting and legal standing.
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