Becca Franklin and Suzanne Peterson formed an LLC as co-owners and managers.The LLC made $275,000 after expenses last year.There are no provisions in their operating agreement on how profits are to be split.
-Becca Franklin and Suzanne Peterson have formed a general partnership.The partnership,BFSP Dental,sells used dental equipment.Tragically,Suzanne is killed in an auto accident.At the time of the accident,BFSP has two dental chairs ($50,000 each)and four high-powered drills ($30,000 each).What happens to the partnership as a result of Suzanne's death?
A)Becca has the right to continue the partnership.
B)The partnership is dissolved.
C)There is right of survivorship in general partnerships, so Becca owns the business in full.
D)The partnership will need to go through a reorganization.

Question

Becca Franklin and Suzanne Peterson formed an LLC as co-owners and managers.The LLC made $275,000 after expenses last year.There are no provisions in their operating agreement on how profits are to be split.​
-Becca Franklin and Suzanne Peterson have formed a general partnership.The partnership,BFSP Dental,sells used dental equipment.Tragically,Suzanne is killed in an auto accident.At the time of the accident,BFSP has two dental chairs ($50,000 each)and four high-powered drills ($30,000 each).What happens to the partnership as a result of Suzanne's death?​
A)​Becca has the right to continue the partnership.
B)​The partnership is dissolved.
C)There is right of survivorship in general partnerships, so Becca owns the business in full.
D)The partnership will need to go through a reorganization.

Quizplus · Accepted Answer

In a general partnership, the death of one partner typically results in the dissolution of the partnership. The remaining partner may start a new partnership, but it would not be a continuation of the previous partnership unless there are specific provisions in the partnership agreement that provide for such a situation. Since there are no provisions mentioned in the question, the most likely outcome is that the partnership is dissolved. The assets of the partnership would need to be liquidated and any debts paid off before Becca could claim any remaining assets as her own.

Becca Franklin and Suzanne Peterson Formed an LLC as Co-Owners