MC Qu. 41 Which of the following statements is correct... Which of the following
ID: 2448957 • Letter: M
Question
MC Qu. 41 Which of the following statements is correct...
Which of the following statements is correct regarding the admission of a new partner?
A new partner must purchase a partnership interest directly from the business.
A new partner always pays book value.
The right to participate in management of the business cannot be conveyed without the consent of other existing partners.
The right to share in profits and losses can be sold to a new partner without the consent of other existing partners.
Explanation / Answer
Option A is correct. A new partner must purchase a partnership interest directly from the business.
The incoming partner will have to purchase shares or partnership interest from the business which is consisted of existing partners. Therefore, ultimately new partner has to take consent from all existing partners.
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