If I were in a partnership and my partner died wouldn't that mean I get first dibs on the other half of the business? One wouldn't just automatically get the remaining 1/2, right?
2007-03-20 08:38:11 · 5 answers · asked by AuntieM 2 in Business & Finance ➔ Corporations
In common tort law I think the partnership is dissolved upon the death of a partner. And assets are divided amongst the partners according to the terms of the partnership agreement. With the deceased partner’s heirs receiving their portion of the assets.
This is one of the drawbacks of a partnership over a corporation, the legal entity ceases to exist when anyone of the partners permanently looses they ability to enter into a contract (mental incapacity and death are two conditions that come to my mind right now).
I believe the legal argument is the court cannot force the remaining partners to accept a new party at the partnership table. Example if there were 3 partners. One dies. The two remaining partners cannot be forced into partnership with an heir that they do not want to be partnered with. This is what a partnership contract is not an assignable contract.
Select your business partners with more scrutiny than you would a mate. Your spouse can only take half of your worldly possessions. Your business partner can take it ALL.
This Wiki page also concurs
http://en.wikipedia.org/wiki/General_partnership
“Technically, a partnership terminates upon the death, disability, or withdrawal of any one partner. However, most partnership agreements provide for these types of events with the share of the departed partner being purchased by the remaining partners in the partnership”
2007-03-20 10:05:14 · answer #1 · answered by James H 5 · 1⤊ 0⤋
You should search the issue at the law search engine
www.LawSolver.com
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(3) "Can One Partner in a Partnership File for Bankruptcy? | LegalZoom: Legal Info"
2014-12-24 19:50:50 · answer #2 · answered by Business Law Help 1 · 0⤊ 0⤋
The next of kin would probably have legal rights to the 1/2 the deceased owned.
2007-03-20 08:51:25 · answer #3 · answered by shorty 6 · 0⤊ 0⤋
It would probably go to the deceased's family. Depending on their will.
2007-03-20 08:48:28 · answer #4 · answered by Sinclair 6 · 0⤊ 0⤋
James H has the right answer - he has done his homework.
2007-03-21 04:14:52 · answer #5 · answered by jim_elkins 5 · 0⤊ 0⤋