Fiduciary Duties Flashcards
Who owes fiduciary duties in an LP?
GPs owe fiduciary duties, LPs generally do not.
An LP could become liable/owe duties if they participate in management.
What is the duty of loyalty?
Generally, to put the partnership’s interests before your own.
What is the duty of care?
To refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
What is the duty of disclosure?
To provide complete and accurate information concerning the partnership.
Without demand: any info concerning p’ship’s business reasonably required for proper exercise of partner’s rights & duties
On demand: any other p’ship info
Can a partnership agreement eliminate the duties of care or loyalty?
No.
What is considered to be partnership property?
Property acquired:
- in the partnership’s name, or
- in a partner’s name where it is apparent from the document that they are acting for a partnership.
When is property presumed to be partnership property?
When it was purchased with partnership funds.
Rebuttable presumption.
When is property presumed to be a partner’s separate property?
- Held in the name of one or more partners
- Instrument transferring title gives no sign that they’re acting for a partnership, and
- Partnership funds were not used to acquire it.
Rebuttable presumption.
What is a partnership’s rights in partnership property?
Unrestricted.
What are a partner’s rights in partnership property?
Can only use partnership property for partnership purposes.
Can a partner assign their partnership interest?
No, unless otherwise agreed.
A partner can unilaterally transfer her financial rights (interest in profits/losses and right to receive distribution), but NOT management rights.
What does a partnership interest consist of?
- Management rights (no unilateral transfer)
- Financial rights (can be unilaterally transferred)
