(1)  A general partner owes to the limited partnership and, subject to Subsection 48-2e-1001(1), the other partners the duties of loyalty and care stated in Subsections (2) and (3).

Terms Used In Utah Code 48-2e-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.
  • General partner: means a person that:
(a) has become a general partner under Section 48-2e-401 or was a general partner in a limited partnership when the limited partnership became subject to this chapter under Section 48-2e-1205; and
(b) has not dissociated as a general partner under Section 48-2e-603. See Utah Code 48-2e-102
  • Limited partnership: means an entity formed under this chapter or which becomes subject to this chapter under 11, or Section 48-2e-1205. See Utah Code 48-2e-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 Utah Code 48-2e-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 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 limited partnership concerning the matters described in Subsection 48-2e-112(1). See Utah Code 48-2e-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 48-2e-102
  • Property: means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein. See Utah Code 48-2e-102
  • Trustee: A person or institution holding and administering property in trust.
    • (2)  The duty of loyalty of a general partner includes the duties:

    (a)  to account to the limited partnership and hold as trustee for it any property, profit, or benefit derived by the general partner:

    (i)  in the conduct or winding up of the limited partnership’s activities and affairs;

    (ii)  from a use by the general partner of the limited partnership’s property; or

    (iii)  from 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 and affairs as or on behalf of a person 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 and affairs.

    (3)  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, intentional misconduct, or a knowing violation of law.

    (4)  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.

    (5)  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.

    (6)  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.

    (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 limited partnership.

    (8)  If, as permitted by Subsection (6) or the partnership agreement, a general partner enters into a transaction with the limited partnership which otherwise would be prohibited by Subsection (2)(b), 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.

    Enacted by Chapter 412, 2013 General Session

      Previous section
    Next section  
     Part 4 Contents