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AE for Buying Assets

If the busine...

Question

If the business assets are not sufficient to repay all the debt then ___ assets are used.

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Solution

Personal

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Q. Abdul is a single owner of a shoe manufacturing business. His business was suffering from continuous losses. To revive his business and to expand, he took a loan of 20 lakhs from 'Progressive Finance Co.' In spite of starting new range of products and great effort by Abdul, business continued to suffer losses. This resulted in the declining assets and mounting debts. Abdul started defaulting on his repayment schedule. Finance company served him final notice to repay the loan and settle the account. He proposed the finance company to take over the business assets and clear their dues. Finance company took over the assets of the business in part settlement of their dues as the assets were not sufficient to settle the debts and they claimed the remaining amount from Abdul from his personal assets. Abdul refused to do so on the ground that loan was taken for the business and not by him for personal use.
1. Name the form of business organization followed by Abdul.
2. Is the finance company justified in asking for remaining amount from Abdul's personal assets? justify your answer by giving suitable feature of the business organization.

Q. If company's assets are not sufficient to pay its debt then can the balance be recovered from private assets of its members?

Q. A person whose assets are sufficient enough to meet business obligations is known as ___________ .

State True or False. The partners are not liable to repay any debt.

Q. Give the word term or phrase which can substitute each of the following statements :

A person whose assets are sufficient enough to meet business obligations

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