Emma is one of three partners in Fast Work, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to
A) nothing.
B) a payout of her capital contribution without more.
C) the buyout price paid by the firm for the interest.
D) one-third of the value of the interest.

Question

Emma is one of three partners in Fast Work, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to
A) ​nothing.
B) ​a payout of her capital contribution without more.
C) ​the buyout price paid by the firm for the interest.
D) ​one-third of the value of the interest.

Quizplus · Accepted Answer

Emma's interest in the firm would be subject to the terms of the partnership agreement. If the agreement provides for a buyout of a deceased partner's interest, her heirs would be entitled to the buyout price paid by the firm for the interest. If there is no such provision, they may be entitled to the value of her interest, but this would depend on the specific terms of the partnership agreement and applicable state law. Option B is incorrect because the heirs may not be entitled to only the payout of capital contribution as it depends on the agreement. Option A is incorrect as it is unlikely that heirs would receive nothing if there is value in Emma's interest in the partnership. Option D is incorrect as it assumes that Emma's interest is worth a specific amount, which may not be the case.

Emma Is One of Three Partners in Fast Work, a Commercial