Relations Between Partners Flashcards
How much control do individual partners have over the management of the partnership?
all partners have an equal right in management of the partnership unless agreed to the contrary.
Decisions involving ordinary business can be controlled by ______________ vote of the partners, but matters outside the ordinary course of business require ______________ consent of the partners.
majority; unanimous
Each partner owes four fiduciary duties to the partnership:
1) duty of loyalty; 2) duty of care; 3) duty of obedience; and 4) duty to provide complete and accurate information concerning the partnership.
The duty of loyalty requires that the partner:
1) account for all profits or other benefits derived by the partner in connection with partnership business; 2) not deal with the partnership as one with an adverse interest; and 3) not compete with the partnership.
The duty of care requires the partner to refrain from . . .
engaging in negligent, reckless or unlawful conduct or intentional misconduct.
The duty of obedience requires the partner to . . .
obey all reasonable directions of the partnership and not act outside the scope of his or her authority.
Each partner is deemed to have an account that is . . .
credited with an amount equal to the partner’s contribution plus his share of any profits and debited with the partner’s share of any losses and partnership liabilities.
Where a partner personally profits at the expense of the partnership, the partner must do what?
account to the partnership for those profits.
When does a partner have a right to compensation for services rendered to the partnership?
unless agreed otherwise, partners have no right to compensation for services rendered to the partnership except for reasonable compensation for services performed in winding up the partnership business.
When must the partnership indemnify partners?
where partners make payments or reasonably incur obligations in carrying on the partnership business.
If a partner makes a payment on behalf of the partnership beyond the contribution the partner agreed to make, what result?
the payment amount beyond their contribution is deemed a loan to the partnership which must be paid back.
Upon dissolution of a partnership, to what is a partner entitled to regarding her account?
a settlement of her account
Books and information of the partnership must be kept where?
at the partnership’s chief executive office
Who may inspect and copy the books?
any of the partners
Upon demand, a partner must render what?
all true and full information of all things affecting the partnership.
