What happens when a partner dies or leaves the firm?

5 ANSWERS

1. Mitchel
   

   If your partner suddenly leaves it can be a serious problematic issue for your business. In such a scenario you will have to finance half of your company on your own. What you need to do, is to make a buy-sell agreement. If your partner dies, it will be easy for you to make a sell and buy agreement. You will be in a legal position to purchase life insurance policy on your partner. With these two documents, if your partner dies, you can slowly buy out his share from the money of the insurance. In case of your partner's death you will get alot of benefits.

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2. Guest627
   

   The laws of the state prevail.
   
   Almost always the partnership is terminated.
   
   DANGER!!! If the partner physically leaves, without dissolving the partnership, that partner is still liable for loans and other things. So, too, are the other partners responsible for loans and other obligations! Imagine what can happen if one person wishes to harm the other...and enjoy the use of the money.

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3. Guest3561
   

   It depends on the terms outlined in the partnership agreement.

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4. Guest8002
   

   If a partner dies their share of the business goes to the next of kin so you could suddenly be in business with their spouse or their 19 year old kid. This is the main reason partners will purchase life insurance on each other, so they can buy the partner's share from the next of kin.
   
   If a partner leaves the firm there should be a written agreement spelling out terms.

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5. Guest9103
   

   If a partner leaves the partnership for any reason, that partnership ceases to exist.
   
   If it is to continue, a new partnership would have to be created.
   
   If the partnership is profitable to all involved, plans for the new partnership should have already been made.

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