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Legal Memorandum: Right of a Surviving Business Partner

Issue: Whether a surviving business partner must be assigned the right to carry on the operation of the business in the Marshall Islands

Area of Law: Business Organizations & Contracts
Keywords: Surviving business partner's right; Assignment; implied consent
Jurisdiction: Marshall Islands
Cited Cases: None
Cited Statutes: PL 1990-91 Act § 172(3)
Date: 05/01/2010

When a surviving partner continues to operate the partnership business after the death of the other partner, even if the estate makes no express assignment of such right but merely consents, by acquiescence or otherwise, the effect is the same as if an assignment had been made.  1990-91 Act § 172(3); see In re Trust Estate of Schaeffer, 283 N.W.2d 410, 419 (Wis. Ct. App. 1979) (surviving partner may continue business under Wisconsin statute identical to 1990-91 Act § 172(3), even if no assignment is made by the legal representative; acquiescence by the legal representative in the continuation is sufficient to imply consent); Tarantino v. Albert, 553 N.Y.S.2d 727, 729-30 (App. Div. 1 Dept. 1990) (under a similar statutory provision, the surviving partner has implied consent to continue operating the business when the estate representative acquiesces in continuation without objection).

Where the surviving partner continues to operate the partnership business with implied consent, the estate is not entitled to any post-death appreciation in the value of the partnership assets.  Instead, with respect to the partnership assets, the representatives of a decedent are entitled only to the value of the decedent’s interest, at the time of his death.  See id. at 729-30 (rejecting the estate’s argument that because the surviving partner did not wind up the partnership but continued the business, he had to share the current value of the property, including post-death asset appreciation); Estate of Schaeffer, 283 N.W.2d at 422 (where the decedent’s representatives acquiesce in the surviving partner’s […]

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