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Will which affects a business - right to read if not beneficiary?

(7 Posts)
whojamaflip Tue 25-Mar-14 23:13:40

If a partner in a business dies and leaves his share of the assets of that business to someone outside the business, do the remaining partners have a right to see a copy of the will before probate? Bearing in mind the deceaseds share of the business will form part of their estate. Also can the executors force a sale of the business without consulting the other partners? Are they allowed access to all documents, accounts etc held by that business and can they appoint a new accountant to inspect the books?

Sorry for so many questions - Tia

Lonecatwithkitten Tue 25-Mar-14 23:17:50

What does the partnership agreement say about death in service of a partner? My agreement required each partner to have life assurance that paid out to the surviving partners the agreement then gave surviving partners the choice to use this money to buy the deceased estate out of the partnership or to support the partnership whilst a beneficiary came into the partnership.
Without a partnership agreement I would seek advice from a solicitor who specialises in partnership law.

Collaborate Wed 26-Mar-14 01:25:56

S33 of the Partnership Act 1890 says:
"Dissolution by bankruptcy, death, or charge.

(1)Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner.

(2)A partnership may, at the option of the other partners, be dissolved if any partner suffers his share of the partnership property to be charged under this Act for his separate debt.

So, unless there is a partnership agreement saying otherwise, the partnership is dissolved. The surviving partners will need to firm a new firm and acquire the assets of the old firm.

poshfrock Wed 26-Mar-14 12:55:35

I agree with everything posted. The will becomes a public document once it has been proved so anyone can see what it says after that point.
But your first port of call is the partnership agreement which should give chapter and verse on what happens when a partner dies in service. the partnership agreement may also be required if a claim for Business Property Relief is to be made against inheritance tax.
Collaborate's post sums up the situation for you I think.

poshfrock Wed 26-Mar-14 12:58:03

Meant to add that as for seeing the books etc, well the executors will need to establish the value of the deceased's share of the business for inheritance tax purposes so you can either give them access or instruct the firm's accountants to prepare a date of death valuation. I would go for the latter and the cost of the valuation will be paid from by the estate as an administration expense. HMRC will ask to see accounts for the business for the last 2 or 3 years for a BPR claim too.

whojamaflip Wed 26-Mar-14 21:08:20

Thank you for the replies - partnership has been drawn up in such a way that it continues after the death of one of the partners - assets belonging to deceased are considered to be partnership assets as they are fundamental to the continuation of the business.

Am I right in thinking that this means the assets can't be forced into a sale but the beneficiaries are entitled to a market rent if those assets - we're talking premises btw.

Who requests the accountants report - us or the executors? Also should we be making the solicitor aware of the partnership agreement or should we wait until they request it? Deceased used a different solicitor to the business one and I don't think he would have supplied a copy of the agreement.

Unfortunately it would appear that a family row is brewing and suspicion is rife on all sides hmm

poshfrock Thu 27-Mar-14 07:32:24

The executors would normally instruct the accountants but if the beneficiaries already have an existing relationship with them then they could do it on their behalf.
If the solicitors don't have a copy of the partnership agreement then I would give them one together with 2 years' worth of accounts and anything else that may be relevant . You mentioned a property so a copy of the title deeds plus any leases etc would be useful. The more info you supply up front the less work for your solicitor and so less fees for you to pay.

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