Greg Knowles owns a business,Clean and Paint.Clean and Paint has 47 employees,equipment worth $350,000,and signed contracts for work that total $450,000.Tragically,Greg has a massive heart attack and passes away.Greg leaves behind his wife and three children.Which of the following is correct?
A)The equipment will be sold, the business liquidated, and proceeds distributed first to the employees.
B)The business could be liquidated or continued by Greg's heirs.
C)The business is dissolved and cannot continue.
D)The employees now own the business.

Question

Greg Knowles owns a business,Clean and Paint.Clean and Paint has 47 employees,equipment worth $350,000,and signed contracts for work that total $450,000.Tragically,Greg has a massive heart attack and passes away.Greg leaves behind his wife and three children.Which of the following is correct?​
A)​The equipment will be sold, the business liquidated, and proceeds distributed first to the employees.
B)​The business could be liquidated or continued by Greg's heirs.
C)The business is dissolved and cannot continue.
D)The employees now own the business.

Quizplus · Accepted Answer

When a sole proprietor passes away, the fate of the business is usually determined by their will. In this case, Greg left behind his wife and three children, who could choose to either liquidate the business or continue running it. The equipment and contracts would become assets of the business that could be sold or used by the heirs. The employees would not automatically own the business, and liquidation and distribution to employees would only occur if there were no heirs or if specified in Greg's will.

Greg Knowles Owns a Business,Clean and Paint