Mutual Duties
Partnerships may operate under agreements that determine rights and duties among partners. The Partnership Act applies if no specific terms exist.
Agreements may establish structures akin to limited companies. Payment for management isn’t automatic. Profits and drawings are subject to agreement. Decision-making processes often follow majority decisions, except for significant matters requiring unanimity.
Partners act as agents for the firm, with their actions binding unless specifically restricted. Fiduciary duties demand honesty, preventing secret profits and benefiting personally from partnerships. Breaches of duty may lead to dissolution or damages. Business opportunities must benefit the partnership, with full disclosure and consent necessary to avoid disputes. Partners must not compete with the firm without consent and are liable for misapplied funds or assets.
Indemnity rights protect partners from liabilities incurred in the firm’s ordinary course of business, though negligence liability remains less clear. Courts may intervene to allocate liability among partners in cases of wrongdoing or negligence.
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