Partnership Law: Study Notes

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Partnership Law
So many of you mentioned, in your introduction, wanting to or having your own business.  The question not only becomes what do you want to do in your business, but what kind of business are you going to develop?

What kind of business you own will affect:

Taxes
Employment issues
Liability issues
How the business can be sold
Involvement with the state
Knowledge needed of local and state laws
Need for an accountant and/or attorney

Make sure you review Chapter 37 in your text, Business Law, for the specific types of businesses that can be created.  Which one sounds like the one you want to create?

Will you have a partner?  Do you want to have a partner?  In your text, the authors list characteristics of partners.  (Principle Characteristics of a Partnership, Mallor, Barnes, Bowers, & Langvardt, 2010, p. 938).

As Mallor et al. states “The relation between partners and the partnership is a fiduciary relation of the highest order” (2010, p. 951).  What are the duties and responsibilities owed to a partner and a partnership?  Mallor et al. lists these duties:

Avoid conflict of interests (competition and adverse interests) - loyalty Duty to care - obligation of good faith and fair dealing
Duty to serve and take responsibilities
Duty not to exceed authority
Duty to account for use of or disposal of partnership funds and/or property Duty of confidentiality
Duty to disclose  (p. 951-953)

Lawyers and legislatures have to have something to do.  So, they write and they codify.

The Revised Uniform Partnership Act codifies the laws that govern partnerships.  It can be viewed at:

Revised Uniform Partnership Act (RUPA).  (1997).  National Conference of Commissioners on Uniform State Laws. Retrieved March 26, 2012, from http://www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/upa97fa.htm

Laws that govern limited liability companies can be located here:

Revised Uniform Limited Liability Company Act...
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