CUET Preparation Today
If the firm's liabilities exceed its assets , how are the partners required to contribute at the time of dissolution of firm? |
From their total family wealth From their private assets after settling private liabilities From their wives' and children's properties Only from firm’s assets, never private assets |
From their private assets after settling private liabilities |
The correct answer is option 2- From their private assets after settling private liabilities. The private property of any partner shall be applied first in payment of his private debts and the surplus, if any, may be utilised for payment of the firm’s debts, in case the firm’s liabilities exceed the firm’s assets. It may be noted that the private property of the partner does not include the personal properties of his wife and children. Thus, if the assets of the firm are not adequate enough to pay off firm’s liabilities, the partners have to contribute out of their net private assets (private assets minus private liabilities). |
