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 creditor’s approach for repayment of the debt? Explain giving reasons
(a) The sole proprietorship firm have unlimited liability. Partners are liable to repay debts even from their resources in case the business assets are not sufficient to meet its debts. Therefore such actions can be taken by the creditors.
(b) In the given situation the creditor approach both of them as they are partners and liable to repay the debt jointly. If one of them is not available then the other has to pay the debt and recover the amount later from the other partner.