p-ship - rights and liabilities between general partners

Question 1

rights and liabilities between general partners

Answer 1

GPs are FIDUCIARIES
GP’s rights in p-ship property & liquidity
mgmt/salary/profits/losses

Question 2

rights and liabilities between general partners

GPs are FIDUCIARIES

Answer 2

GPs are FIDUCIARIES of each other & the p-ship.
Therefore, GPs owe to each other and the p-ship a duty of loyalty.
(No Self-Dealing, no Usurping p-ship opportunities,
no Secret Profits at p-ship expense.)
In an action for accounting, the p-ship may recover losses that are caused by the breach and may also disgorge profits.

Question 3

rights and liabilities between general partners

GP’s rights in p-ship property & liquidity

Answer 3

Specific p-ship assets
Share of profits
Share of management

Question 4

rights and liabilities between general partners
GP’s rights in p-ship property & liquidity
Specific p-ship assets

Answer 4

Specific p-ship assets (land, leases, equipment owned by the p-ship itself)
The specific p-ship assets are owned by the p-ship itself.
Therefore, they may NOT be transferred by individual partners w/o p-ship authority. They are illiquid and non-transferable.

Question 5

rights and liabilities between general partners
GP’s rights in p-ship property & liquidity
Share of profits

Answer 5

The share of profits is personal property owned by individual partners.
Therefore, they may be transferred by individual partners w/o p-ship authority.
They are liquid, transferable, and personal property.

Question 6

rights and liabilities between general partners
GP’s rights in p-ship property & liquidity
Share of management

Answer 6

GPs have a right to share in the management of the business. It is an asset owned by the p-ship itself.
Therefore, it may not be transferred by individual partners to 3rd parties.
Therefore, you cannot sell your right to vote and cannot leave by inheritance.
It is relatively illiquid and non-transferable.

Question 7

rights and liabilities between general partners
GP’s rights in p-ship property & liquidity
Whose money was used to buy the property?

Answer 7

To determine whether the fact pattern involves property owned by the p-ship or personal property owned by an individual partner, the test is:
Whose money was used to buy the property?
P-ship money = p-ship property
personal money = personal property

Question 8

rights and liabilities between general partners

mgmt/salary/profits/losses

Answer 8

mgmt: Absent an AGR, each partner is entitled to EQUAL control (vote) and majority vote governs ordinary matters. But unanimous consent is required for fundamental p-ship matters
salary: Absent an AGR, partners get NO salary. (But partners can be paid to help wind up the business.)
profits: Absent an AGR, profits are shared equally.
losses: Absent an AGR, losses are shared like profits.