50Rules for distribution of assets on final settlement of

50 Rules for distribution of assets on final settlement of accounts (1) In settling accounts between the partners in a firm after dissolution of partnership, this section applies subject to an agreement to the contrary. (2) Losses suffered by the firm, including losses and deficiencies of capital, shall be paid first out of the profits of the firm, next out of the capital of the firm and, lastly, if necessary, by the partners in the firm, individually, in the proportions in which they were entitled to share the profits of the firm. (3) The partnership property of the firm, including the sums (if any) contributed by the partners in the firm to make up losses or deficiencies of capital, shall be applied in the following manner and order: (a) in paying the debts and liabilities of the firm to persons who are not partners in the firm; (b) in paying to each partner in the firm rateably what is due from the firm to the partner for advances as distinguished from capital; (c) in paying to each partner in the firm rateably what is due from the firm to the partner in respect of capital; (d) in dividing the ultimate residue (if any) among the partners in the firm in the proportions in which the profits of the firm were divisible.

Preliminary Division 6.1