What is the Revised Uniform Partnership Act?
The Revised Uniform Partnership Act (RUPA) is a model statute that dictates how partnerships should be set up and organized, as well as what the rights and duties of each of the partners should be. It is, as the name suggests, a revision of the Uniform Partnership Act (UPA), and has been adopted by almost every state.
RUPA gives partners much more discretion in determining how their partnership will operate than the UPA did, by allowing the partnership agreement to be the main authority over each of the partners. RUPA also provides fall-back rules for any provisions that are left out of the partnership agreement. What Kinds of Partnerships Does RUPA Govern?
RUPA governs Limited Liability Partnerships (LLPs) and General Partnerships, but not Limited Partnerships. Limited Partnerships are not considered real partnerships under RUPA, so they are not subject to any of RUPA's restrictions. What Are Some of the Revisions Included in RUPA?RUPA made a number of changes to the old rules governing partnerships. It created partner "dissociations," which allow a partner to withdraw from the partnership without causing a dissolution of the remaining partnership.
Most importantly, RUPA says that the partnership agreement (not partnership law) creates the rights and duties of the partners. The partners are free to include or exclude various rights in their agreement, although they are prohibited from doing the following: - restricting a partner's access to the books and records of the company;
- eliminating or unreasonably reducing the partners' duty of care to one another;
- eliminating the partners' duty of loyalty or obligation of good faith and fair dealing;
- denying a partner the right to withdraw from the partnership
Should I Contact an Attorney About My Partnership Issue?If you feel that one of your partners has violated any of RUPA's provisions, or if you believe that your partnership agreement does not comply with RUPA, an attorney with business experience can help you preserve your rights as a partner and protect the best interests of your partnership and your business. |
