Business Partnership Status After One Partner’s Death
Just to add, I understand that all assets, liabilities including profits etc at the time of partner’s death will be equally distributed. My questions are more about running business profits and any change in assets and liabilities etc since the death.
After distribution of the dead partner’s 50% share to his legal heirs, the partnership will be considered dissolved. Until the time such distribution is made, the share would stay 50/50 because the deceased partner’s assets are still employed in the business. However, the partner alive, who is managing the business, may charge management fee from the share of the deceased partner and it is better to have that fee agreed before hand from the heirs of the deceased partner. The fee should be reasonable and customary according to the norms of the industry. If the heirs of the deceased are underage and the partner alive is also acting as a guardian of those children, then the following Sharia Directives would apply: Discussion 30322