The heirs of the deceased partner:a)Can become a partner in the firm o...
Heirs of the Deceased Partner - CA Foundation
Introduction
When a partner in a firm dies, the question arises as to what happens to the deceased partner's share in the partnership. In such a case, the heirs of the deceased partner come into the picture. This article discusses the rights of the heirs of the deceased partner in a partnership firm.
Rights of the Heirs
The heirs of the deceased partner have certain rights in a partnership firm. These rights are discussed below:
Right to Share in the Profits and Losses of the Firm
The heirs of the deceased partner have the right to receive their share in the profits and losses of the firm up to the date of the death of the deceased partner. This means that the profits and losses of the firm up to the date of the death of the deceased partner shall be shared by the surviving partners and the heirs of the deceased partner in the proportion of their respective shares.
Right to Inspect the Books of Accounts
The heirs of the deceased partner have the right to inspect the books of accounts of the firm. This right is available to them to enable them to know the financial position of the firm.
Right to Receive Interest on the Amount Due to the Deceased Partner
The heirs of the deceased partner are entitled to receive interest on the amount due to the deceased partner from the date of his death until the date of payment. The rate of interest should be reasonable and should be agreed upon by the surviving partners and the heirs of the deceased partner.
Right to Become a Partner in the Firm of the Deceased Partner
The heirs of the deceased partner have a right to become a partner in the firm of the deceased partner. However, this right is subject to the following conditions:
- The surviving partners must give their consent for the heirs to become partners in the firm.
- The heirs must fulfill the conditions for becoming a partner in the firm, such as contributing capital, participating in the management of the firm, etc.
Conclusion
In conclusion, the heirs of the deceased partner have certain rights in a partnership firm, such as the right to share in the profits and losses of the firm, the right to inspect the books of accounts, the right to receive interest on the amount due to the deceased partner, and the right to become a partner in the firm of the deceased partner subject to certain conditions.