Question

When the partners of a business develop an arrangement whereby should one of them die or become permanently disabled, the other partners would purchase the interest of the deceased or disabled partner at a predetermined price, this is called a/an:

Answer 1

Answer:

Business Continuation Plan

Explanation:

Business Continuation plan is a form of agreement developed by partners of a business whereby in a case when one partner dies or is permanently disabled in such a way he/she becomes ineffective, the other partner would buy out the interest of the deceased or permanently disabled at s already predetermined price.

In general business Continuation plan guides against potential threats to a company. It ensures personnel and asset are protective and able function quickly in the case of disaster. In this situation, the potential threat against the company is the death of a partner and the method used in protecting the company is by fixing a price for a partner to by the other partner's interest should in case one dies.