Duties within a Partnership

The video tutorial discusses the duties and responsibilities of general partners within a general partnership. It covers the default rules, limitations set by partnership agreements, and fiduciary duties such as loyalty and care. The duty of care requires partners to avoid actions that harm the partnership, while the duty of loyalty prohibits prioritizing personal interests over the partnership. Breaches of these duties, like usurping partnership benefits, are actionable by the partnership or other partners.

What is the default rule regarding the activities a general partner can undertake?

• A general partner must seek approval from a board of directors.

• A general partner can only act with unanimous consent from all partners.

• A general partner can only make decisions related to financial matters.

• A general partner can undertake any activity on behalf of the partnership.

What is a key aspect of the duty of care owed by general partners?

• Avoiding actions that could harm the partnership.

• Focusing solely on short-term profits.

• Ensuring personal financial gain is maximized.

• Delegating all responsibilities to other partners.

What must a general partner avoid to fulfill their duty of care?

• Making decisions that benefit the partnership.

• Consulting with other partners.

• Following the partnership agreement.

• Acting in a way that is reckless or negligent.

Which of the following is an example of breaching the duty of loyalty?

• Investing in partnership-approved projects.

• Starting a competing business using partnership resources.

• Sharing partnership profits equally.

• Consulting with partners before making decisions.

What is the consequence of a general partner usurping a partnership benefit?

• It is considered a breach of loyalty.

• It results in automatic dissolution of the partnership.

• It strengthens the partnership's market position.

• It is encouraged to promote competition.