Business Insurance Life Part Viii-partnerships - What Happen to the Partnership if One Partner Dies
If one partner dies, it is no longer a partnership and the survivor becomes a "Liquidating Trustee." The business, as the partners knew it, ceases to operate.The survivor and the estate of the deceased can not: draw income, enter into new contracts, accept new orders, borrow money. The partnership business may continue
1. Until it has been wound up or re-organized or liquidated
2. If the surviving partner decides to carry on, they are responsible for: any new losses and paying interest and percentage of profits on the deceased's capital to the estate.
If the deceased did not have a valid will, the process is further complicated, because any partner or their representative can apply to the courts to wind-up the partnership, a successful business could be ordered into a forced liquidation or cheap sale.
If the surviving partner choose just to reorganize, there are several options
1. Surviving partner buys out the heirs
Both parties must agree on price and a method to finance the purchase.
2. Heirs buy-out the surviving partner
The heirs must have the experience to operate the business otherwise hiring a business operation manager will be costly and expose them to unlimited liability.
Of course, both parties must agree on price and a method to finance the purchase.
3. Sale of business to a suitable outsider
A suitable outsider may be difficult to find and he or she must have the cash or access to cash to buy in, acceptable to surviving partner.
4. Rollover to surviving heirs
The heirs must have the experience to operate the business and must obtain clearance from the estate's executor/executrix, after debts, taxes and administrative costs have been paid.
All these option can be easy to solve if the partnership have established a properly funded, binding buy-sell agreement prior to the death of a partner. This provides for the most welcome alternative - a willing, knowledgeable buyer with cash who must buy-out the deceased's partnership interest.
I hope this information will help. If you need more information, please visit my home page at:
Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://businessinsurance8.blogspot.com/
http://businessinsurance7.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
Related Tags: insurance, business, life insurance, business insurance, insurance quote, insurance agency
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- Motor Trade Rundown
It is not just cars that must be insured on British roads, every type of motor vehicle is required b - Claiming Compensation For Defective Products
Compensation claims for injury and damage caused by faulty, defective products normally target eithe - Ideas To Uncover Affordable Rate Auto Coverage
These days, everyone is looking for ways to lower expenses. Certain costs like home and car insuranc - Should It Be Illegal For People To Drive Without Vehicle Insurance?
There are many drivers on the road who drive un-roadworthy vehicles. The worst part is not that they - Do You Need Static Caravan Insurance?
Static caravan insurance is an automobile insurance that deals with vehicles that are used while on - Insurance - Tool For Personal Finance Planning
Financial planning is must for every individual. When we start saving money for our goals, there is - Family Life Insurance Policy For The Families Staying In Dubai
The main motive of insurance policy is to give financial security to the person's family especially - Buying Temporary Health Insurance In Florida
You are the resident of Florida? You are between jobs and therefore are not looking for a long term - Car Insurance Is Of The Utmost Importance In Today's Lifestyle
In today's hectic lifestyle we are always rushing to get from one place to another, whether it be ru - Health Insurance Companies Are Using New Laws As An Excuse To Raise Their Rates
Government officials are cautioning insurance companies to stop utilizing scare tactics to steam up
Most viewed articles in this category:
- International Health Insurance: Insure Yourself While in Go
We all will agree that whether we are living in our home country or abroad, our health needs constan - It's Never Too Early to Buy a Long Term Care Health Insurance!
Most people delay buying a long term care health insurance because they think that it is too early t - Home Owner Insurance Quote: Stay Safe!
Your house will not be fully secured until and unless you have a home owner insurance policy. A home - The Benefits of Health Insurance Are Immense!
Almost everyone in this world has fallen ill sometime or the other. Apart from illness, many people - What Happens When You Make An Insurance Claim?
If you've never filed a loss claim before, you might feel nervous and confused about the whole proce - Pet Health Care Insurance: Show your Pets That you Care!
Having a pet in one's household is a joyful experience. It can provide you with entertainment, compa - Three Ways to Buy Long Term Care Without Paying Premiums Out of your Pocket
Stop 100 people over 65 on the street and ask them if they will ever need to go to a nursing home an - Protect That Bauble: Engagement Ring Insurance
Engagement ring insurance can protect your bauble in case a worst case scenario happens...So you've - Do I Need Diamond Ring Insurance
If you have to ask whether or not you need diamond ring insurance you probably do. There's somethin - Choosing a Benefits TPA
The use of third-party administrators (TPAs) is one of the hottest trends in insurance today. Accor