Right to Sue the Firm for Recovery
Creditors have the legal right to initiate proceedings against the firm for unpaid dues or breach of contract.

• Can file a civil suit for recovery of outstanding amounts
  
• May initiate legal actions such as arbitration or insolvency proceedings
  
• The court can order the attachment of the firm’s assets and bank accounts
  
• A legal notice or demand letter must typically precede the lawsuit
  
• A settlement or decree passed binds the firm to repay the dues
  

Right Over Firm’s Assets
Creditors can claim or attach the business assets of the firm to recover their outstanding amounts.

• Includes machinery, inventory, receivables, and property owned by the firm
  
• Assets are liquidated during legal execution to satisfy claims
  
• Priority may be given to secured creditors over unsecured ones
  
• Creditors cannot seize personal assets directly without court intervention
  
• The sale of firm assets is subject to proper legal and valuation procedures
  

Right Against Individual Partners
Creditors can pursue individual partners’ personal assets if the firm’s assets are insufficient, due to the principle of joint and several liability.

• Each partner is personally liable for the full debts of the firm
  
• Creditors may choose to sue any one or more partners
  
• A partner’s personal property may be attached if firm’s assets fall short
  
• Retiring partners may be liable for past debts unless a public notice is issued
  
• Incoming partners are not liable for pre-existing debts unless agreed
  

Rights in Case of Dissolution or Insolvency
When a firm dissolves or becomes insolvent, creditors are entitled to repayment from firm assets before distribution to partners.

• Firm assets are used first to pay external creditors
  
• Partners cannot withdraw capital until debts are settled
  
• Insolvency laws govern distribution during liquidation
  
• Creditors can object to unfair or fraudulent transactions
  
• Credit rating and trust of the partners may be affected
  

Right to Information and Legal Protection
Creditors may seek transparency and use legal remedies to protect their interests during financial disputes.

• May request details of financial statements, contracts, and bank statements
  
• Can petition for winding up or freezing of assets if mismanagement is suspected
  
• Legal remedies include injunctions, garnishee orders, or arbitration
  
• Have protection under the Indian Contract Act for contract enforcement
  
• In case of fraud, criminal proceedings can also be initiated against partners