Need for admission of a new partner

A new partner is admitted in to the firm so as to:-
1) Increase the capital of the firm for the expansion plans of the business.
2) Include a capable and efficint employee like a manager into partnership so as to encourage him.
3) To take advantage of the experience, reputation and goodwill of the incoming partner etc.

Admission of a new partner results in the reconstitution of a partnership firm ending the existing agreement. Hence a new partnership agreement comes into existence. A new partnership deed is prepared at the time of admission of the new partner. A new partner can be admitted into the firm only with the consent of all the existing partners(Section 31(1)).

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