Question

Distinguish between Firm's Debts and Partner's Private Debts.

Answer 1

The difference between Firm's Debts and Partner's Private Debts is as follows:

$\begin{array}{ccc}\text{Basis of Difference}& \text{Firm's Debts}& \text{Partner's Private Debts}\\ \text{Meaning}& \text{Debts owed by a firm to outsiders}.& \text{Debt owed by partner to any other person.}\\ \text{Liability}& \text{All the partners are liable jointly}& \text{Only the concerned partner is held}\\ & \text{and severally to firm's debt}.& \text{responsible to pay the liability}.\\ \text{Application of firm's property}& \text{Firm's debts will be applied first}.& \text{Excess, if any will be applied}\\ & & \text{to private debts}.\\ \text{Application of private property}& \text{Last priority, i.e., after the}& \text{First priority to individual,}\\ & \text{disposal of private debts}.& \text{i.e., private debts}.\end{array}$