Question

What is the difference between insolvency of individual and partnership firm

Answer 1

There is only one major difference between insolvency of individual and partnership firms.

In the case of individual firms, at the time of insolvency, no distinction is made between the assets and liabilities of the individual and his/her business.

However, a distinction is made between the assets and liabilities of the business and the partners when the firm is declared insolvent. The partners’ assets and liabilities are known as private assets and liabilities. Private assets are used to first clear off private liabilities. The remaining assets are used to get done with the firm’s liabilities Hope it helps please mark as.