WHAT IF MY BUSINESS PARTNER
DIES?
Every business needs to be set up correctly and maintain its records correctly.
Consider this scenario: You and your business partner built a business from scratch that is now worth $2 million. Last year your partner took a loan from the business. You didn’t legally document the loan---knowing that he would pay it back. Your partner just died. His wife is entitled to her husband’s portion of the business.
If you own a business with other investors, it is important to think about what happens if someone dies, divorces or becomes incapacitated. Do you have a right of first refusal to purchase your dead partner’s portion of the business? Can your company afford to buy out his heirs? Do you need to have key man life insurance? Have your corporate records been maintained to accurately reflect the corporate investments? These things should be planned for and legally documented.
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