Question : On dissolution of the firm, partner A demands that his loan of Rs. 1,00,000 should be paid before payment of Capitals of the partners, whereas partners B and C demand that Capitals should be paid before the payment of A's loan. State the order of payment.
Option 1: As per Section 48 of the Indian Partnership Act, 1932, partner's loan is paid before the payment of partner's Capitals.
Option 2: As per Section 48 of the Indian Partnership Act, 1932, partner's loan is paid after the payment of partner's Capitals.
Option 3: As per Section 48 of the Indian Partnership Act, 1932. Partner's loan is paid before the payment of outsider's liabilities.
Option 4: None of the above
Correct Answer: As per Section 48 of the Indian Partnership Act, 1932, partner's loan is paid before the payment of partner's Capitals.
Solution :
Answer =
As per Section 48 of the Indian Partnership Act, 1932, the partner's loan is paid before the payment of the partner's Capital.
As per section 48, Indian Partnership Act 1932 partner's Loan is 'Paid Before the Payment of Partner's capital. This legal provision prioritizes settling the internal obligations of partners before addressing external liabilities.
Hence, the correct option is 1.
