Partnership Account: Admission of New Partners - Meaning - SS2 Accounting Lesson Note

Admission of new partners refers to the process of bringing in new individuals or entities into an existing business partnership. This means that the original partners have agreed to allow someone else to become a part-owner of their company.

Typically, admission of new partners occurs when the existing partners want to bring in new skills, knowledge, or capital to the partnership, or when they want to divide the workload and responsibilities among more people. Admitting new partners can be a beneficial move for an existing partnership, as it can help to bring in fresh ideas and resources to support the growth and success of the business.

The new partner will usually make a capital contribution to the partnership, which may involve the purchase of an ownership stake or the provision of additional funds to support the partnership's operations. In exchange for their investment, the new partner will receive a share of the profits and losses of the partnership.