The relationship between a partner and the company ends automatically when the partner dies. Within six months from his death, the surviving partners have the duty of returning the share held by the dead partner to his heirs. The surviving partners are not obliged to accept that the heirs of the deceased member should succeed him by taking his place in the company.
The surviving partners have two options they can choose from. They may either decide:
- to wind up the company in advance;
- to carry on the company with the deceased partner’s heirs, in which case, however, consent by all surviving partners and by the heirs is mandatory.
However the partners may introduce specific clauses in the partnership contract hence pre-determining what will happen in case of death. Among the most common clauses mention can be made of:
- a consolidation clause, which establishes that the deceased partner’s quota will be purchased by the other partners, and the heirs will receive the value of the share by way of settlement;
- a clause of continuation with the heirs (all or some of them), whereby the partners agree in advance on transferring the quota to the heirs, thereby precluding recourse to the other two alternatives (purchase of the capital share or dissolution of the company).
The clauses of continuation may, in turn, be distinguished into three groups:
- the clause is binding only on the surviving partners, while the heirs are free to choose whether to join the company or to request settlement of the quota they are entitled to (clause of optional continuation);
- the clause sets forth the obligation for the heirs to join the company, with the consequence that they will be obliged to pay compensation to the surviving partners if they choose not to join (clause of compulsory continuation);
- the clause envisages that the heirs will automatically join the company (clause of succession). In other words, as heirs of the deceased they automatically become partners of the company.
These types of clauses are not all considered valid by case law, since they may be in contrast with the provisions of the law, for example entering into agreements on successions is illegal: in order to avoid problems in inheritance matters seek the professional advice of a notary public who will draw up an unambiguous clause that reflects your intentions.