Personal profits earned after dissolution (Section 50)
According to Section 16(a) no partner can make a personal gain out of any transaction of the firm, or the use of the name, property or business connection of the firm, if he makes any such gain he shall account for that to the firm (Bentley v. Craven). A similar duty is contained in Section 50 on dissolution of the firm by the death of a partner. Therefore, a partner making personal profit after dissolution and before winding up has to account for that profit. The reason is that until there is winding up, all the partners continue to be the owners of the firm and also the joint property and therefore no partner can gain any personal advantage.
Section 53 of the act empowers the partners or their representatives to restrain any other partner or his representatives from.
From carrying on similar business in the firm’s name or from using any of the property of the firm for his own benefit, until the affairs of the firm have been completely wound up.
If after the dissolution of the firm, any partner or his representative buys the goodwill of the firm he can make use of the firm’s name and shall not be liable.
Payments of firm’s debts and separate debts (Section 49)
Where there a joint debts due from the firm and also separate debts due from any partner –
a) The property of the firm shall be applied in first instance in payment of debts of the firm and if there is any surplus then share of each partner shall be applied in payment of his separate debts or paid to him.
b) The separate property of any partner shall be applied first in payment of his separate debts and if surplus (if any) in payments of the debts of the firm.