The business assets of an organisation amount to ₹ 50 ,000 but the debts that remain unpaid are ₹ 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 , who share profits and losses equally . Which of the two partners can the creditors approach for repayment of debt ? Explain giving reasons .

Explanation

Business assets = ₹ 50,000 , Liabilities = ₹ 80,000
Therefore , Creditor's claim = ₹ 30,000
(a) If the organisation is a sole proprietorship firm , the creditors can sue the sole proprietor for ₹ 30,000 , because a sole proprietor has unlimited liability . In the case of business losses , if the business assets are not sufficient to meet all business liabilities , the proprietor may have to sell his personal property to pay off the liabilities .
(b) If the organisation is a partnership firm with Anthony and Akbar as partners , the creditors can sue both the partners or a single partner or their claims . The reason is that partners have unlimited liability .
They are jointly and individuals liable for payment of firm's debts . Jointly , all the partners are responsible for the repayment of the firm's debts in their profit sharing ratio. So , Anthony and Akbar will have to pay ₹ 15,000 each . Individually , a single partner (suppose Anthony) can be held responsible to repay the debts of the business ₹ 30,000 , if Akbar becomes insolvent and cannot bring anything from his private assets .