Question

All partners wishes to dissolve the firm. Yasmin, a partner wants that her loan of Rs. 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.

Answer 1

According to Section 48 of Partnership Act 1932, their is a sequence of preferences given which tells the priority of payment at time of dissolution. In the above condition, the loans and advances of partner’s i.e., Rs.2,00,000 will be paid before and payment of capital is always done at last