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Homework Paragraph on the theoretical basis that admitting an additional partner: . Causes a new partnership agreement . Could result in old partners bonus 12-#)
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Admitting an additional partner-causes a new partnership agreement:

A partnership is an agreement between two or more persons for the purpose of sharing the profits of a business carried on by all or any one of them who are acting on behalf of or for all the partners. Admitting an additional partner means there that there is a change in the profit sharing ratio and that also results in the reconstitution of the partnership firm which results in a change of the existing partnership agreement and thereby leading to the formation of the new partnership agreement .

Admitting an additional partner-Could result in old partners bonus

When the additional partner who is admitted to the partnership firm pays an amount that is more than interest percentage received then it results in bonus to the existing or the old partners of the Partnership Firm .Such a situation generally arises when the current market value of partnership firm is higher than the current value of the partner’s equity.

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