S. 224, LAW OF CONTRACT ACT (CAP. 345 R.E., 2002][TANZANIA MAINLAND]

224.

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 necessa

ry, 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.