Victorian Consolidated Legislation

Partnership Act 1958 - SECT 48

Rule for distribution of assets on final settlement of accounts

48. Rule for distribution of assets on final settlement of accounts

In settling accounts between the partners after a dissolution of partnership
the following rules shall subject to any agreement be observed-

   (a)  losses including losses and deficiencies of capital shall be paid
        first out of profits next out of capital and lastly if necessary by
        the partners individually in the proportion in which they were
        entitled to share profits;

   (b)  the assets of the firm including the sums (if any) contributed by the
        partners to make up losses or deficiencies of capital shall be applied
        in the following manner and order-

   (i)  in paying the debts and liabilities of the firm to persons who are not
        partners therein;

   (ii) in paying to each partner rateably what is due from the firm to him
        for advances as distinguished from capital;

   (iii) in paying to each partner rateably what is due from the firm to him
        in respect of capital;

   (iv) the ultimate residue (if any) shall be divided among the partners in
        the proportion in which profits are divisible. _______________