LAW 3111H Chapter Notes - Chapter 30: Fiduciary, Charging Order, Bc Partners
Chapter 30
Nature of Pship
• Definition: an association of two or more persons to carry no as co-owners a
business for profit
Formation of a Pship
Pship Agreement: it is preferable, although not usually required, that the partners enter
into a written pship agreement
Tests of Existence: the formation of a pship requires all of the following
• Association: two or more persons w/ legal capacity who agree to b/c partners
• Business for profit
• Co-ownership: includes sharing of profits and control of the business
Partnership Capital: total money and property contributed by the partners for use
by the partnership
Partnership Property: sum of all of the partnerships assets, including all property
acquired by the partnership
Duties Among Partners
Fiduciary Duty: duty of utmost loyalty, fairness, and good faith owed by partners
to each other and to the partnership; includes duty not to appropriate partnership
opportunities, not to compete, not to have conflicts of interest, and not to reveal
confidential information
Duty of Obedience: duty to act in accordance with the partnership agreement and
any business decisions properly made by the partners
Duty of Care: duty owed by partners to manage the partnership affairs without
gross negligence, reckless conduct, intentional misconduct, or knowing violation
of law
Rights among partners
rights in specific pship property: partners have the right to use and possess pship property
for pship purposes
transferable interest in pship: the partner`s share of the profits and losses of pship and the
partner`s right to receive distributions
• Assignability: a partner may sell or assign his transferable interest in the
partnership; the new owner boms nttl to t assnn partnr’s rt to
receive distributions but does not become a partner
• Crtors’ Rts: a partner`s transferable interest is subject to the claims of
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