Utah Code 48-1d-405. Standards of conduct for partners
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(1) A partner owes to the partnership and the other partners the duties of loyalty and care stated in Subsections (2) and (3).
Terms Used In Utah Code 48-1d-405
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partner: means a person that:(11)(a) has become a partner in a partnership under Section 48-1d-401 or was a partner in a partnership when the partnership became subject to this chapter under Section 48-1d-1405; and(11)(b) has not dissociated as a partner under Section 48-1d-701. See Utah Code 48-1d-102
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: means an association of two or more persons to carry on as co-owners a business for profit formed under this chapter or that becomes subject to this chapter under Part 10, Merger, Interest Exchange, Conversion, and Domestication, or Section 48-1d-1405. See Utah Code 48-1d-102
- Partnership agreement: means the agreement, whether or not referred to as a partnership agreement, and whether oral, implied, in a record, or in any combination thereof, of all the partners of a partnership concerning the matters described in Subsection 48-1d-106(1). See Utah Code 48-1d-102
- Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Utah Code 48-1d-102
- Property: means all property, whether real, personal, or mixed, or tangible or intangible, or any right or interest therein. See Utah Code 48-1d-102
- Trustee: A person or institution holding and administering property in trust.
(2) The duty of loyalty of a partner includes the duties:(2)(a) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner:(2)(a)(i) in the conduct or winding up of the partnership’s activities and affairs;(2)(a)(ii) from a use by the partner of the partnership’s property; or(2)(a)(iii) from the appropriation of a partnership opportunity;(2)(b) to refrain from dealing with the partnership in the conduct or winding up of the partnership’s activities and affairs as or on behalf of a person having an interest adverse to the partnership; and(2)(c) to refrain from competing with the partnership in the conduct of the partnership’s activities and affairs before the dissolution of the partnership.(3) The duty of care of a partner in the conduct or winding up of the partnership’s activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.(4) A partner shall discharge the duties and obligations under this chapter or under the partnership agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.(5) A partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the partner’s conduct furthers the partner’s own interest.(6) All the partners may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.(7) It is a defense to a claim under Subsection (2)(b) and any comparable claim in equity or at common law that the transaction was fair to the partnership.(8) If, as permitted by Subsection (6) or the partnership agreement, a partner enters into a transaction with the partnership which otherwise would be prohibited by Subsection (2)(b), the partner’s rights and obligations arising from the transaction are the same as those of a person that is not a partner.