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Death of partner has the effect of____________
  • a)
    Dissolving the firm
  • b)
    Result in continuance of the business of the firm
  • c)
    His heirs joining the firm
  • d)
    Computation of profits upto the date of death
Correct answer is 'D'. Can you explain this answer?
Most Upvoted Answer
Death of partner has the effect of____________a)Dissolving the firmb)R...
Effect of Death of Partner in a Firm

When a partner of a firm dies, it has certain effects on the firm. These effects are as follows:

Continuance of the Business
- The death of a partner does not dissolve the firm, and the business of the firm continues.
- The remaining partners continue the business according to the terms and conditions of the partnership agreement.
- If there is no partnership agreement, the business continues as per the provisions of the Partnership Act, 1932.

Computation of Profits
- The profits of the firm are calculated up to the date of death of the partner.
- The deceased partner's share of the profits up to the date of death is calculated and paid to his or her legal heirs.

Admission of Heirs
- The legal heirs of the deceased partner may be admitted as partners in the firm with the consent of all the existing partners.
- This may require the reconstitution of the firm and amendment of the partnership agreement.

Conclusion
In conclusion, the death of a partner in a firm does not automatically dissolve the firm, and the business continues. The profits are calculated up to the date of death, and the legal heirs may be admitted as partners with the consent of all existing partners.
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Community Answer
Death of partner has the effect of____________a)Dissolving the firmb)R...
Because one partner death does not effect the firm
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Death of partner has the effect of____________a)Dissolving the firmb)Result in continuance of the business of the firmc)His heirs joining the firmd)Computation of profits upto the date of deathCorrect answer is 'D'. Can you explain this answer?
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