Rights of Partners Flashcards
Rights of General Partners (in GP and LP)
Equal rights to manage the partnership and conduct business
Unless the PA says otherwise:
A general partner binds the partnership when acting in the ordinary course of business (OCOB)
Acts outside the OCOB bind partnership ONLY if all general partners agree
If a general partner’s proposed action is in the OCOB but there is a dispute amongst the general partners how is it resolved?
The matter is resolved by majority vote.
If a general partner’s proposed action is not in the OCOB and or violates the partnership agreement how is the dispute settled amongst general partners?
Unanimous consent among the general partners would be required
Rights and non-rights of Limited Partners
No right to co-manage the partnership or engage in partnership business (limited partners aren’t agents of the LP)
Right to seek information for a purpose reasonably related to their interest as a limited partner, including the right to:
(1) inspect and copy tax returns and other documents required by law, AND
(2) obtain true and full information as to the financial condition and state of the partnership’s business
