RECONSTITUTION OF PARTNERSHIP

When there is any change in the existing agreement of partnership, it is reconstitution of partnership. As a result of reconstitution, the existing agreement of partnership comes to an end and a new agreement is formed. The firm continues its business in usual manner. Some special adjustments are to be made in the accounts of partnership firm in cases of change in the constitution of the firm.

There may be changes in the constitution of the firm due to following reasons: