Online-exclusive visual guides
1. Dissolution ≠ liquidation — the critical distinction
A change in the RELATION of the partners — admission, withdrawal, retirement, or death. The old partnership ends legally, but the business typically continues under a new partnership.
The WINDING UP of the business itself — sell the assets, pay the creditors, distribute what's left. The business stops.
2. Admission router — purchase vs investment
The exam giveaway: "paid directly to Partner X" = purchase (no new firm assets). "invested cash into the firm" = investment (new assets, test for bonus).
3. Bonus on admission — who pays whom?
| Comparison | Result | Capital effect |
|---|---|---|
| Investment = capital credit | No bonus | Everyone keeps what the math says |
| Investment > capital credit | Bonus to OLD partners | The excess is shared by old partners in their P&L ratio |
| Investment < capital credit | Bonus to NEW partner | Old partners' capital is reduced in their P&L ratio to top up the newcomer |
Total capital after admission = old capital + new investment. The bonus only re-slices that total — it never invents assets.
Practice tools
Tool 1 · Admission-by-investment analyzer
Enter the old firm's capital, the new partner's investment, and the agreed interest — see the bonus flow.
Tool 2 · Dissolution event sorter
Purchase of interest, admission by investment, or withdrawal settlement?