A partnership may be automatically dissolved due to the following factors except________
Answer Details
A partnership may be automatically dissolved due to any of the following factors: court verdict, joint decision, or bankruptcy of a partner. However, the admission of new partners does not automatically dissolve a partnership.
When a partnership is dissolved, it means that the business relationship between the partners has ended, and the partners are no longer bound to work together. The dissolution can occur for various reasons, including those listed above.
A court verdict may dissolve a partnership when a lawsuit is brought against the partners, and the court orders the dissolution of the partnership. A joint decision to dissolve the partnership occurs when all the partners agree to end their business relationship.
The bankruptcy of a partner may also lead to the automatic dissolution of a partnership. In this case, the bankrupt partner's assets may be used to pay off the partnership's debts, and the remaining partners may not be willing or able to continue the business.
On the other hand, the admission of new partners does not necessarily dissolve a partnership. It is possible for a partnership to bring in new partners without ending the existing partnership. However, the addition of new partners may require a re-negotiation of the partnership agreement, which can lead to changes in the terms and conditions of the partnership.