Admission of a Partner: Entries
Admission of a New Partner When firm requires additional capital or managerial help or both for the expansion of its business a new partner may be admitted to supplement its existing resources. According to the Partnership Act 1932, a new partner can be admitted into the firm only with the consent of all the existing partners unless otherwise agreed upon. With the admission of a new partner, the partnership firm is reconstituted and a new agreement is entered into to carry on the business of the firm. A newly admitted partner acquires two main rights in the firm – 1. Right to share the assets of the partnership firm. 2. Right to share the profits of the partnership firm. New Profit-Sharing Ratio: When new ...