General duties of partners
🔹 General Duties of Partners
Partners in a partnership owe certain legal and ethical duties to each other and to the partnership as a whole. These duties are meant to ensure trust, fairness, and proper management of the business.
Here’s a summary of the key general duties of partners:
1. Duty of Loyalty
Partners must act in good faith and in the best interest of the partnership.
They must not compete with the partnership or take business opportunities for themselves without consent.
No self-dealing—partners cannot use partnership assets for personal gain.
2. Duty to Act in Good Faith
Partners must be honest, fair, and transparent in all dealings related to the business.
This duty underlies all other obligations in the partnership.
3. Duty of Care
Partners must act with the care that a reasonably prudent person would exercise in a similar situation.
They should avoid gross negligence, reckless conduct, or intentional misconduct.
4. Duty to Render Information
Each partner has a duty to provide full and accurate information to co-partners about all matters affecting the partnership.
Includes financial updates, legal matters, and business decisions.
5. Duty to Account
Partners must account for any profit or benefit derived from:
Partnership business
Use of partnership property
Partnership connections
Must not misappropriate funds or hide earnings.
6. Duty to Contribute
Partners are expected to contribute capital, labor, or skills as agreed upon.
Must fulfill their financial and managerial commitments to the partnership.
7. Duty to Share Losses and Profits
Partners are bound to share profits and losses as per the partnership agreement, or equally if no agreement exists.
8. Duty Not to Compete
A partner generally may not engage in a competing business during the life of the partnership unless agreed otherwise.
⚖️ Legal Basis (Varies by Jurisdiction)
Depending on your legal system, these duties may be governed by:
The Uniform Partnership Act (UPA) or Revised UPA (RUPA) in the U.S.
The Partnership Act 1890 in the U.K.
Civil codes or commercial codes in civil law jurisdictions (e.g., Philippine Civil Code or Indian Partnership Act).
Do write to us if you need any further assistance.
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