Estate Settlement of a Partnership
Started by TEA ENG PENG
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TEA ENG PENG
A partnership is formed when 2 or more persons come together to set up a business. Similar to a sole proprietorship, the business is formed as soon as the partners’ company name and intention are approved by ACRA. Partnership is governed by the Partnership Act (Cap 391) in Singapore.
Upon the death of any one partner, a business partnership will have to shut down. The deceased person’s share in the partnership will then be included as part of his estate for the purpose of estate settlement.
Similar to a sole proprietor, a partnership has no separate legal entity. The estate settlement of account receivables, payables and business debts is similar to the estate settlement of a sole proprietorship. The write-up below will highlight the estate settlement issues peculiar to partnerships.
Each of the partners is required to contribute some form of capital to the business. The ratio of contribution might not necessarily be the same between each partner. Therefore, when one partner dies, the deceased person’s estate legal representative needs to settle the capital from the surviving partners. This is not an easy task especially if there is no partnership agreement done amongst the partners when the business was started.
0 points
TEA ENG PENG
A partnership is formed when 2 or more persons come together to set up a business. Similar to a sole proprietorship, the business is formed as soon as the partners’ company name and intention are approved by ACRA. Partnership is governed by the Partnership Act (Cap 391) in Singapore.
Upon the death of any one partner, a business partnership will have to shut down. The deceased person’s share in the partnership will then be included as part of his estate for the purpose of estate settlement.
Similar to a sole proprietor, a partnership has no separate legal entity. The estate settlement of account receivables, payables and business debts is similar to the estate settlement of a sole proprietorship. The write-up below will highlight the estate settlement issues peculiar to partnerships.
Each of the partners is required to contribute some form of capital to the business. The ratio of contribution might not necessarily be the same between each partner. Therefore, when one partner dies, the deceased person’s estate legal representative needs to settle the capital from the surviving partners. This is not an easy task especially if there is no partnership agreement done amongst the partners when the business was started.