Relationship Between Parties

Question 1

Contribution, Profits, Losses

Answer 1

1. Each partner is entitled to be repaid his contributions; AND
2. to share equally in the profit and surplus (after all liabilities are satisfied)
3. Each partner must contribute toward lossess
4. Partners may agree to share profits other than equally

Question 2

Indemnify

Answer 2

Partnership must indemnify every partner for payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business,

or

for the preservation of its business or property

Question 3

Management and Control

Answer 3

Partners have equal rights in the managmement and conduct of the partnership business

Question 4

Fiduciary duties

Answer 4

• Each partner owns the partnership a duty of care in the management of partnership property
• Partners owe each other the utmost good fatih in all that pertains to their relationship
• Partner must not compete with the partnership within the scope of business
• Partners must provde on demand true and full information of all things affecting the partnership to any partner

Question 5

Assignment

Answer 5

• Partner’s interest in the partnership is assignable
• Assignment does not destroy the partnership
• Assignee is entitled to receive the profits to which assignor would have been entitled

Question 6

Fiduciary duties (3)

Answer 6

1. Duty of care
2. Duty of loyalty
3. Duty to Account

Question 7

Duty of Care

Answer 7

Each partner owes the partnership a duty of care in the management of the partnership property

Question 8

Duty of Loyalty

Answer 8

1. Good faith – utmost good faith in all that pertains to the relationship
2. Duty not to compete with the partnership within the scop of its business
3. Duty to disclose, on demand, true and full information of all things affecting the partnership to any partner or legal rep of any deceased partner/partner under legal disability

Question 9

Duty to Account

Answer 9

• Must account to the partnerhip for any benefit, and
• hold as trustee for it any profit
• Duty to keep books and right of inspection – partnership books must be kept, subject to any agreement between the partners, at PPofB – every partner shall have access to inspect or copy

Question 10

Suits between partners

Answer 10

Partners cannot sue each other at law, but must sue in equity for an accounting

Exception: an action at law for tortious injury of one partner by another