Kentucky Statutes 362.2-408 – General standards of general partner’s conduct
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(1) The fiduciary duties that a general partner has to the limited partnership and the other partners include the duties of loyalty and care under subsections (2) and (3) of this section.
(2) A general partner‘s duty of loyalty to the limited partnership and the other partners includes, but it not limited to, the following:
(a) To account to the limited partnership and hold as trustee for it any property, profit, or benefit derived by the general partner in the conduct and winding up of the limited partnership’s activities or derived from a use by the general partner of limited partnership property, including the appropriation of a limited partnership opportunity;
(b) To refrain from dealing with the limited partnership in the conduct or winding up of the limited partnership’s activities as or on behalf of a party having an interest adverse to the limited partnership; and
(c) To refrain from competing with the limited partnership in the conduct or winding up of the limited partnership’s activities.
(3) A general partner’s duty of care to the limited partnership and the other partners in the conduct and winding up of the limited partnership’s activities includes, but it not limited to, acting with the care that a reasonable person in a like position would exercise under similar circumstances and in a manner that the partner believes to be in the best interests of the limited partnership.
(4) A general partner shall discharge the duties to the limited partnership and the other partners under this subchapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing.
(5) A general partner does not violate a duty or obligation under this subchapter or under the partnership agreement merely because the general partner’s conduct furthers the general partner’s own interest. That a transaction was fair to the limited partnership shall not constitute a defense to the breach of the obligation in subsection (2) of this section.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 81, sec. 122, effective July 12, 2012. — Created
2006 Ky. Acts ch. 149, sec. 128, effective July 12, 2006.
(2) A general partner‘s duty of loyalty to the limited partnership and the other partners includes, but it not limited to, the following:
Terms Used In Kentucky Statutes 362.2-408
- Fiduciary: A trustee, executor, or administrator.
- General partner: means :
(a) With respect to a limited partnership, a person that:
1. See Kentucky Statutes 362.2-102 - 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 limited partner or general partner. See Kentucky Statutes 362.2-102
- 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: includes both general and limited partnerships. See Kentucky Statutes 446.010
- Partnership agreement: means the partners' agreement, oral, implied, in record form, or in any combination, concerning the limited partnership. See Kentucky Statutes 362.2-102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Kentucky Statutes 362.2-102
- Trustee: A person or institution holding and administering property in trust.
- Violate: includes failure to comply with. See Kentucky Statutes 446.010
(a) To account to the limited partnership and hold as trustee for it any property, profit, or benefit derived by the general partner in the conduct and winding up of the limited partnership’s activities or derived from a use by the general partner of limited partnership property, including the appropriation of a limited partnership opportunity;
(b) To refrain from dealing with the limited partnership in the conduct or winding up of the limited partnership’s activities as or on behalf of a party having an interest adverse to the limited partnership; and
(c) To refrain from competing with the limited partnership in the conduct or winding up of the limited partnership’s activities.
(3) A general partner’s duty of care to the limited partnership and the other partners in the conduct and winding up of the limited partnership’s activities includes, but it not limited to, acting with the care that a reasonable person in a like position would exercise under similar circumstances and in a manner that the partner believes to be in the best interests of the limited partnership.
(4) A general partner shall discharge the duties to the limited partnership and the other partners under this subchapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing.
(5) A general partner does not violate a duty or obligation under this subchapter or under the partnership agreement merely because the general partner’s conduct furthers the general partner’s own interest. That a transaction was fair to the limited partnership shall not constitute a defense to the breach of the obligation in subsection (2) of this section.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 81, sec. 122, effective July 12, 2012. — Created
2006 Ky. Acts ch. 149, sec. 128, effective July 12, 2006.