Conducting Partnership Business

Question 1

What rights do General Partners have?

Answer 1

Each general partner has equal rights to manage the partnership and conduct business (unless PA says otherwise).

Question 2

When does a general partner bind the partnership?

Answer 2

When acting within the ordinary course of business.

Acts outside the ordinary course of business bind the partnership only if ALL GENERAL PARTNERS consent to the action.

Question 3

How are disputes between General Partners resolved?

Answer 3

Acts within the ordinary course of business = MAJORITY vote

Acts outside the ordinary course of business = UNANIMOUS consent

Question 4

What rights do Limited Partners have?

Answer 4

Rights to seek information for a purpose reasonably related to their interest as limited partner, including right to:

+ inspect and copy tax returns and other documents required by law

and

+ obtain true and full information as to financial condition/state of the partnership’s business.

No right to co-manage or engage in partnership business (limited partners are not agents of LP).