Question

Reconstitution of partnership is:

• A. Necessary
• B. Unnecessary
• C. Situational
• D. None of these

Hint:

Admission, retirement, death, or change in ratio always requires reconstitution of partnership.

Answer 1

The Correct Option is A

Step 1: Meaning of reconstitution.
Reconstitution of partnership occurs when there is a change in agreement, e.g., admission, retirement, death, or change in profit-sharing ratio.
Step 2: Legal necessity.
It is necessary to ensure fair distribution of rights and liabilities among partners. Without reconstitution, old terms would remain unfair.
Step 3: Conclude.
Therefore, reconstitution of partnership is necessary.
Final Answer: \[ \boxed{\text{Necessary}} \]