Themis Essay 860 Flashcards
A partner owes the partnership and the other partners two fiduciary duties:
the duty of loyalty and the duty of care.
Under the duty of loyalty, a partner is required to refrain from the following activities:
(i) competing with the partnership business;
(ii) advancing an interest adverse to the partnership; and
(iii) usurping a partnership opportunity, or otherwise using partnership property or business to derive a personal benefit without notifying the partnership.
Under the duty of care, a partner is required to refrain from
engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.
A partnership may not unreasonably reduce a partner’s
duty of care.
A partner is not entitled to remuneration for services performed for the partnership, except
when the partner renders services in winding up the business of the partnership.
A majority of the partners must approve a decision as to a matter
in the ordinary course of business, such as a distribution of partnership profits.
A distribution requires the approval of
a majority of the partners (since a distribution is in the partnership’s ordinary course of business.)
A transferee of a limited partnership interest has the power to exercise all of the transferor’s rights in the partnership for the purpose of
administering the transferor’s estate property.
A decision as to a matter outside the ordinary course of the partnership’s business, such as an amendment to the partnership agreement, requires
the consent of all partners.
In general, a partnership interest in a limited partnership is
personal property that can be assigned in whole or in part.
Upon assignment, a partner ceases to be a partner in a limited partnership, and the assignee generally has rights only to
receive the distribution to which the assignor partner would have otherwise been entitled.
An assignee of a limited partnership interest, including a general partnership interest, may become a limited partner if
the partnership agreement permits it or if all parties agree.
