In case of dissolution of a firm, the following sequence as provided in Section 48 of the Partnership Act 1932, shall apply in the following manner and order, the assets including any sum contributed by the partners to make up for deficiencies of capital :
A. The residue shall be divided among the partners in the proportions in which they are entitled to share profits.
B. In paying each partner proportionately what is due to him from the firm for advances as distinguished from capital.
C. In paying the debts of the firm to third parties.
D. In paying each partner proportionately what is due to him as capital.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → C, B, D, A
Section 48 of the Indian Partnership Act, 1932 fixes the order in which the assets of a dissolved firm are applied: outsiders are paid before partners, and a partner's loan before his capital.
C. In paying the debts of the firm to third parties.
B. In paying each partner proportionately what is due to him from the firm for advances as distinguished from capital.
D. In paying each partner proportionately what is due to him as capital.
A. The residue shall be divided among the partners in the proportions in which they are entitled to share profits.
NCERT (2026-27 edition): |