As a general partner, you are entitled to an equal share of the partnership‘s profits, unless otherwise specified by your partnership agreement. You are also entitled to full disclosure by your partners of anything they do on behalf of the partnership and you have the right to withhold your consent to any such dealings.
In any general partnership, each partner has a duty to act in the best interest of the partnership at all times. Beyond that, the general partners may decide to include a variety of different duties to one another in their partnership agreement. These agreements normally say that the partners must:
- hold all profits in trust to be distributed equally to the partners;
- not divert partnership funds into your own account;
- gain consent from the other partners before acting on behalf of the partnership;
- disclose to the other partners any and all actions you take on behalf of the partnership;
- personally reimburse any partner who has been held financially liable for a debt or action of the partnership
There are certain duties that a partnership can eliminate with their agreement and still remain in compliance with the Revised Uniform Partnership Act (RUPA). Certain duties, however, that the RUPA imposes cannot be done away with, even if it is stipulated in your partnership agreement. The most common of these duties is the duty of loyalty to the partnership. The duty of loyalty restricts you or your partners from the following:
- dealing with a party who has conflicting interests with the partnership,
- taking personal profit from any money that should be held in trust for the partnership
- competing with the partnership in any way
Partnership disputes can be complicated and detrimental to your business. A business attorney can help preserve your rights as partner and protect both your interests as well as the interests of your company.