Retiring or deceased partner's share is debt PA 1890 s.43
PA 1890 s.43: Amount due for outgoing/deceased partner's share becomes a debt accruing at dissolution or death, unless agreed otherwise.
Subject to any agreement between the partners, the amount due from surviving or continuing partners to an outgoing partner or the representatives of a deceased partner in respect of the outgoing or deceased partner’s share is a debt accruing at the date of the dissolution or death.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
This provision turns the value of an outgoing or deceased partner's share into a debt owed by the continuing partners. The debt is due on the date the partnership dissolves or the partner dies, unless the partners have agreed otherwise in their partnership agreement.
'Outgoing partner' means a partner who leaves for any reason (retirement, expulsion, etc.). 'Representatives of a deceased partner' means the estate or heirs. The share is the partner's interest in the partnership assets, not a specific item.
The key effect is that the surviving or continuing partners must treat that amount as a debt payable immediately, not as a future share of profits or a deferred sum.
When it applies
- After one partner retires, the other partners must pay the retired partner the value of his share as a debt from the date of retirement.
- A partner dies; the surviving partners owe the deceased partner's estate the value of her share as a debt from the date of death.
- When a partnership is dissolved by notice under s.32, each partner's share becomes a debt due from the continuing partners (if any) at the date of dissolution.
- Two partners agree in writing that an outgoing partner's share will be paid in instalments over two years; the provision defers to that agreement and the debt does not become due immediately.
What this section does not say
- This provision does not set a formula for valuing the partner's share; valuation is governed by the partnership agreement or default rules.
- It does not give the outgoing partner or estate a right to interest on the debt; interest, if any, must be claimed under another rule or agreement.
- It does not address the order of payment if the partnership is insolvent; priority among creditors is determined by insolvency law.
- It does not apply to a partner's personal debts (e.g., a personal creditor cannot use this section to demand payment directly from the partnership).
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This page reproduces the text of PA 1890 s. 43 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.