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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 up to the date of death
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Death of partner has the effect of:a)Dissolving the firmb)Result in co...
The death of a partner has the effect of dissolving the firm. This is because a partnership is based on the mutual agreement and trust among the partners. When one partner dies, that mutual agreement and trust is affected, and the firm cannot continue to function as it was.

Dissolving the firm:
- The remaining partners can decide to continue the business as a new firm, but the original partnership is considered dissolved.
- The assets and liabilities of the firm need to be settled, and the deceased partner's share in the assets and liabilities will be determined.
- The partnership agreement may include provisions for the continuation of the business after the death of a partner, but the firm will still technically be considered dissolved and a new agreement will need to be made.
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Most Upvoted Answer
Death of partner has the effect of:a)Dissolving the firmb)Result in co...
On dissolution of the firm, the business of the firm ceases to exist since its affairs are would up by selling the assets and by paying the liabilities and discharging the claims of the partners. The dissolution of partnership among all partners of a firm is called dissolution of 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 up to the date of deathCorrect answer is option 'A'. Can you explain this answer?
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