(a) A general partner owes to the limited partnership and, subject to § 61-3-901, the other partners, only the duties of loyalty and care stated in subsections (b) and (c).
Terms Used In Tennessee Code 61-3-409
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.
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.
Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, 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 Tennessee Code 61-3-101
Property: means all property, whether real, personal, mixed, or tangible or intangible, or any right or interest in such property. See Tennessee Code 61-3-101
Trustee: A person or institution holding and administering property in trust.
(b) The fiduciary duty of loyalty of a general partner includes the duties:
(1) To account to the limited partnership and hold as trustee for the limited partnership any property, profit, or benefit derived by the general partner:
(A) In the conduct or winding up of the partnership’s activities and affairs;(B) From a use by the general partner of the partnership’s property; or(C) From the appropriation of a partnership opportunity;(2) 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(3) To refrain from competing with the partnership in the conduct or winding up of the partnership’s activities and affairs.(c) The duty of care of a general partner in the conduct or winding up of the limited partnership’s activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, willful or intentional misconduct, or knowing violation of law.(d) A general 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.(e) A general partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the general partner’s conduct furthers the general partner’s own interest.(f) All the partners of a limited partnership may authorize or ratify, after full disclosure of all material facts, a specific act or transaction by a general partner that otherwise would violate the duty of loyalty.(g) It is a defense to a claim under subdivision (b)(2) and any comparable claim in equity or at common law that the transaction was fair to the limited partnership.(h) If, as permitted by subsection (f) or the partnership agreement, a general partner enters into a transaction with the limited partnership that would otherwise be prohibited by subdivision (b)(2), the general partner’s rights and obligations arising from the transaction are the same as those of a person that is not a general partner.
