relationships between partners Flashcards
what relationship exists between the partner and the partnership
agency relationship
partner can commit partnership to k w/ TPs
name the three duties partners owe
duty of loyalty
duty of care
good faith and fair dealing
define duty of loyalty
no competing with P
no advancing interests adverse to P
no usurping P opportunity
how would the partners limit their liability for potential duty of loyalty violations
put in P agreement certain activities that do NOT violate
cannot eliminate entirely
when is the only time a partner could usurp a P activity?
approval from majority of partners
define duty of care
no grossly negligent, reckless or intentional misconduct
don’t knowingly break the law
how would the partners limit their liability for potential duty of care violations
REASONABLY limit in P agreement
can you limit good faith and fair dealing?
yes if you set out reasonable standards
absent a partnership agreement, how are profits and losses split
equally
what if PA only splits up profits?
split up losses the same way
how are management rights divided?
equally
what cant a partner compel a partnership to do?
cannot demand distributions to their partner account
what share does a partner own
partnership interest
what if I sold my partnership interest
i keep management rights
buyer has economic rights
general rule on partnership property
owned by P
this property could be titled under P or under individual in capacity as partner
