Partnerships - Operations

Partnerships - Operations - BUSINESS LAW II Partnerships -...

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    BUSINESS LAW II Partnerships - Operations
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    the Partnership The partners owe each other the highest  degree of loyalty They are fiduciaries to each other, and to  the partnership Each partner also owes the other and the  partnership a duty of good faith and fair  dealing This is separate from any contract or  fiduciary duty – It is imposed by RUPA
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    Brosseau v. Ranzau,  text pg 913
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    Particular Duties No Interest Adverse to the Partnership.  A partner  cannot take an interest that benefits the partner and is  adverse to the partnership No Competition With Partnership.  A partner cannot  create a separate business the competes with the  partnership Duty to Serve.  The partner must undertake his or her  responsibility to run the business of the partnership Duty to Act Within Authority.  A partner must act within  the authority granted in a partnership agreement, or in the  absence of an agreement, within the authority reasonably  granted a partner in the same position
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    Particular Duties  (Cont.) Duty of Care.  Each partner owes the  partnership the duty of faithful service to the  best of their ability Ordinary Care or Skill not Required.  The partner  need not demonstrate the skill held by an ordinary  paid agent RUPA Requirement.  Partner may not engage in  grossly negligent or reckless conduct, intentional  misconduct, or a knowing violation of the law Investigation May be Required.  Situation may  require an investigation before making a decision. Best Interest.  The partner’s decisions should be  made in the best interest of the partnership
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    Particular Duties  (Cont.) Duty to Account:   For disposal or use of partnership property For their own receipt of partnership  property or money obtained without the  other partners’ consent For all partnership business transacted by  the partner, and to make those records  available to the person maintaining the  partnership’s books The books must be kept at the partnership’s  main office
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    Particular Duties  (Cont.) Use of Partnership Property.  Partnership property  must be used for partnership purposes only No Taking of Business Opportunities.   A partner  may not misappropriate a business opportunity in 
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This note was uploaded on 05/04/2008 for the course BUAD 495 taught by Professor Mamun,todd during the Spring '07 term at USC.

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Partnerships - Operations - BUSINESS LAW II Partnerships -...

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