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Forms Of Business Organization

Question

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The business assets of an organisation amount to Rs. 50,000 but the debts that remain unpaid are Rs. 80,000. What course of action can the creditors take if
(a) The organisation is a sole proprietorship firm
(b) The organisation is a partnership firm with Anthony and Akbar as partners. Which of the two partners can the creditors approach for repayment of debt? Explain giving reasons.

Solution

(a) If the form of organisation is sole proprietorship, then the owner has to pay this debt from his personal poperty.
(b) If the form of organisation is partnership, then both the partners have to bear this loss in their profit sharing ratio or capital ratio, if any. If there is no ratio has been decided by the partners in the beginning, then the creditors can recover their debt from the personal property of Anthony and Akbar equally.

Some More Questions From Forms of Business Organization Chapter

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