Multiple choice

The reconstitution of the firm takes place in case of

  1. admission of a partner

  2. retirement of a partner

  3. expulsion or death of a partner

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Reconstitution of a partnership firm occurs in all these cases: admission of a new partner, retirement of an existing partner, expulsion of a partner, or death of a partner. Each event fundamentally changes the composition of the firm and requires restructuring of the partnership agreement, profit-sharing ratios, and often a fresh deed of partnership. The firm continues but with altered membership, making it a reconstitution rather than dissolution.

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