Question

State True or False with reason.

Change in the relationship between the partners is called the Reconstitution of partnership.

Options

• True

• False

Answer 1

This statement is True.

Reason:

When any person joins the business as a partner, a change in the relationship takes place. The old agreement is terminated and a new agreement is prepared. There is a change in profit or loss sharing ratio and the relationship of the partners which is known as the Reconstitution of Partnership.