What is the usual effect of a partner’s death on an ordinary partnership agreement?
Correct answer: B. The partnership is generally dissolved
- A. The partnership automatically becomes a company
- B. The partnership is generally dissolved
- C. The deceased partner’s share passes to the government
- D. The remaining partners lose their personal assets
Explanation
Unless the agreement provides otherwise, the death of a partner generally causes dissolution of the partnership. The business may continue if the agreement or the surviving partners provide for its reconstitution.
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About Nature and Forms of Business Organisation
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
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