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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10919
Experience:  30 years as a practising solicitor.
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My Dad was in partnership with his brother, his brother died

Customer Question

My Dad was in partnership with his brother, his brother died and they didn't have a partnership agreement. The will states that the business be split between 4 siblings. My dad, and his 3 sisters. There's a bit of a battle going on over the will now. As I understand it, the partnership should be dissolved upon the death of the partner and the beneficiaries of the will are entitled to the share of the value of the business at date of death. Is this right? My Dad just met his accountant who told him that the business is now "in limbo" and that he is unable to do anything with it, he wants to sell up. The accountant said that the sisters would have to give him their shares or he would have to give him his, and they would then need to start up a new partnership. What I need to know is, is this right? Is it not the case that the business would now be under my Dad only and he owes the sisters the value of the shares at the date of death of his brother? I seem to be getting conflicting information and I know this advice needs to come from a lawyer rather than an accountant!
Submitted: 1 year ago.
Category: Scots Law
Expert:  JGM replied 1 year ago.
The position is that a partnership is technically dissolved when a partner retires or dies. If there's only one remaining partner then there can't be a partnership and your dad has been a sole trader since the death of his brother.
The sisters can't just come into the business the value of the brother's interest in the business would have to be calculated by the accountant as at the date of death and the value of the brother's share paid from the business into the estate to be divided between the beneficiaries. Your father would have the option of leaving his share in the business if he wanted to do that.
Your father would also have the option to wind up the business with the estate getting the brother's share and your father getting his share.
Happy to discuss further.
Customer: replied 1 year ago.
Thanks for your response. What you have explained is how I understood the law to be. Is the accountant wrong in saying that my father can't do anything with the business now?
Expert:  JGM replied 1 year ago.
Your father is at liberty to continue to trade or not as he sees fit. The business has a liability to pay out to the brother's estate but that doesn't mean your father can't still trade on his own. I don't think the accountant is right about this if that is what he is saying, certainly from the information you have given me.
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10919
Experience: 30 years as a practising solicitor.
JGM and other Scots Law Specialists are ready to help you
Customer: replied 1 year ago.
The accountant said that because nobody owns the business just now it was in limbo. He said that my dad would either have to give up his shares or the sisters would have to give up theirs.
Expert:  JGM replied 1 year ago.
You are welcome.

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