Distinguish between firm's debts and private debts. - Vidyadip

Question

Distinguish between firm's debts and private debts.

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Answer

	Basis	Firm's Debts	Private Debts
i.	Meaning	It means the debt owed by the firm outsiders.	It means debt owed by a partner in his personal capacity to any other person.
ii.	Liability	All the partners are jointly and severally liable for firm's debts.	Concerned partner is liable personally liable for his private debt.
iii.	Application of firm property	Firm's property is applied first for in setting firm's dents.	Share of the concerned partner in excess of firm's property over firm's debts can be applied for private debts.
iv.	Application of private property	Excess of partner's private property over his private debts can be applied debts for firm's debts.	Private property is applied first for private Private debts.

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