Partners' Responsibilities

Question 1

What duty do partners have toward each other? (in accordance with common law)

Answer 1

Partners must be fair and honest, sharing information and profits, and not starting competing businesses without agreement

Question 2

What are examples of duties under the duty of utmost good faith? (ss28-30 PA 1890)

Answer 2

Not suppressing information affecting valuation in business dealings, sharing profits from personal business activities, and ensuring partnership funds are not misused

Question 3

What further responsibilities can partners enforce against each other?

Answer 3

They must share losses based on their agreement (PA 1890, s24(1), and the partnership must cover partners’ fair share of liabilities or expenses (PA 1890 s 24(2)).

Question 4

Where do most partner responsibilities come from?

Answer 4

They come from the partnership agreement, whether it’s express or implied