Distinguishes between firm’s debts and private debts

by • 24/06/2013 • GeneralComments (0)369

Q.10    Distinguishes between firm’s debts and private debts.

Arts:    Firm’s Debt and Private Debts can be distinguished as under:

Agreement

Firm’s Debts

Private debts

Who incurs Firm’s debts are incurred by the

firm.

Private debts are incurred by a partner in the individual capacity of a household and not in the capacity of a partner of a firm.
Who is liable For firm’s debts, all partners are jointly and severally liable. For private debts, only the concerned partner is liable.
Application of firm’s property For firm’s debts firm’s property shall be applied first. For private debts, only the share of concerned partner in the excess of firm’s property over firm’s debts can be applied.
Applicable of private property. For firm’s debts, only the excess of partner’s private property over j his private debts can be applied. For private debts, private properly shall be applied first.

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