Admission of Partner referred to entering a new partner or partners in the partnership firm for the share of profit and paying off his or their share of the firm’s goodwill and capital. When the firm needs more funding or services/knowledge to grow their business then they approach the new partner(s) against share in the profit of the firm with the consent of all old partners.
What is the Admission of Partner: –
The admission of the partner refers to the situation where an individual joins the existing partnership firm and the old partners are agree to sacrifice their share of profit. This is the mode of reconstitution of Partnership Because, with the admission of a new partner, there is a need to create a new agreement/deed between all partner including new partner and ends the existing agreement/deed.
There will be New profit sharing ratio among all partners because all(minimum one) old partners will sacrifice some portion of their profit share in the firm and the new partner will get some portion of the share of profit as per the deal with the old partners.
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Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)- USHA Publication Class +2 – Solution
Question wise solution of the all Questions of Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)- USHA Publication Class +2 – Solutions are shown below: –