Chapter 38 provides knowledge of operation of partnership and related forms. In this chapter students will be able to: List and explain duties partners owe to the partnership and each other, explain why partnership agreements can resolve issues about partners’ management and compensation rights, describe the liability of partners for torts and contracts. | Partnerships 9 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Introduction to Forms of Business and Formation of Partnerships Operation of Partnerships Dissolution & Winding Up Limited Liability Companies & Limited Partnerships Operation of Partnership and Related Forms P A E T R H C 38 “It is not the individual but the team that is the instrument of sustained and enduring success in management.” Anthony Jay, quoted in Management Teams – Why They Succeed (R. Meredith Belbin, 1984) Learning Objectives Duties of partners to the partnership and each other Compensation of partners Management powers of partners Liability for torts and crimes Lawsuits by and against partnerships and partners 38 - Under RUPA, partners owe partnership and each other the highest degree of loyalty and the obligation of good faith and fair dealing A fiduciary relationship General duties: to serve, account for use or disposal of partnership funds, act within . | Partnerships 9 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Introduction to Forms of Business and Formation of Partnerships Operation of Partnerships Dissolution & Winding Up Limited Liability Companies & Limited Partnerships Operation of Partnership and Related Forms P A E T R H C 38 “It is not the individual but the team that is the instrument of sustained and enduring success in management.” Anthony Jay, quoted in Management Teams – Why They Succeed (R. Meredith Belbin, 1984) Learning Objectives Duties of partners to the partnership and each other Compensation of partners Management powers of partners Liability for torts and crimes Lawsuits by and against partnerships and partners 38 - Under RUPA, partners owe partnership and each other the highest degree of loyalty and the obligation of good faith and fair dealing A fiduciary relationship General duties: to serve, account for use or disposal of partnership funds, act within actual authority, avoid interests adverse to partnership, disclose material information, maintain confidentiality Duties of Partners 38 - RUPA is the Revised Uniform Partnership Act “Silent” partners do not serve Partners may compete with the partnership only upon the consent of partners Example: Ann and Elkie own the Ann Elk Tavern as general partners. Ann wants to invest in her boyfriend Brock’s auto shop and neighbor Carol’s Bar N’ Grill. Ann could invest in Brock’s shop without competing with the Ann Elk Tavern partnership, but should not invest in Carol’s Bar N’ Grill without first getting Elkie’s consent A tavern and a bar are too similar and may give rise to a breach of duty claim Would this scenario change if Carol’s business was out of town or the town so large that Carol’s business was not competition for the Ann Elk Tavern? Ann is general manager of Ann Elk Tavern and Elkie handles the company’s finances and accounting. Ann wants to help Brock run his auto shop instead of
