Question : Which section of partnership Act defines the rule for selling of private debts and firm’s debt at the time of dissolution ——–
Option 1: Section 59
Option 2: Section 29
Option 3: Section 49
Option 4: Section 28
Correct Answer: Section 49
Solution : As per Sec 49 Payment of firm debts and of separate debts.—Where there are joint debts due from the firm, and also separate debts due from any partner, the property of the firm shall be applied in the first instance in payment of the debts of the firm, and, if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him. The separate property of any partner shall be applied first in the payment of his separate debts, and the surplus (if any) in the payment of the debts of the firm.
Hence the correct answer is option 3.
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