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Death of a partner

6 partner business, one died mid accounting period, the others are continuing. I was intending to do the accounts for the whole accounting period and time apportion the profit to get pre and post death. As the estate has not yet been settled, in the division of the profits I was going to add the executors as a partner so that the post death part of the dead partners share was shown as their profit. Also I was going to show the balance on the dead partners capital account transferring to the executors.

Does this seem reasonable? Is there a better way?
David James

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06th Jun 2008 19:15

Partnership Deed?
Does the Partnership Deed dictate another approach? If no Deed, refer to Partnership Act.

If all six partners were fee earners, the remaining partners may not be happy because the Executors will be receiving a percentage of the profits (the post death percentage) which bears no relationship to the earnings brought in by the deceased partner.

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