Status of partnership upon the death of a partner
Question
My uncle was in a partnership with his brother & nephew. Recently he passed away. Does my uncle’s wife become a partner in the business? If not, what happens to my uncle’s partnership in the business?
Answer
In a business partnership, if a business partner passes away, the partnership of the business partner automatically terminates. The share of the deceased partner will form part of his estate will have to be distributed amongst his rightful heirs according to the Islamic Laws of Succession and Inheritance. However, if the heirs of the deceased partner mutually agree to enter into a new partnership with the other business partners, then they may do so.
Thus, in this case, the wife of the deceased and the other heirs should decide if they wish for the estate to be distributed amongst themselves now of whether they wish to enter into a new partnership in the business.
And Allah Ta’ala Knows Best
- Answered by
- Mufti Ismaeel Bassa
- Checked by
- Mufti Ebrahim Desai
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