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What duties are imposed in a partnership?

On Behalf of | Mar 10, 2016 | Business Torts |

Miami residents often find that they can get more accomplished when they join together with another person. This is frequently the case when it comes to doing business, as different individuals often join forces together to form a successful business relationship.

For instance, one person may have more technical skill related to the business, while another can provide more financing or assets to run the company. By putting these strengths together, such as in a partnership, individuals can find success that they would be unable to have by themselves.

At the same time, however, joining together with others can create partnership disputes on any number of issues. One partner may want the company to go in a different direction, for example, or may disapprove of how the company is operated by a partner. In other situations, concerns may be raised as to whether a partner has not performed certain obligations.

Under Florida law, certain duties are imposed upon partners. While a limited partner typically does not have fiduciary duties to a limited partnership or another partner, there may be duties if that limited partner is vested with management powers or duties under a partnership agreement.

General partners, on the other hand, have general standards of conduct they must follow under Florida law. The statute states that a general partner has a duty of loyalty to account to the partnership for profits, property and benefits derived by the general partner in the conduct of the partnership’s activities. General partners also have a duty of care to refrain from engaging in grossly negligent or reckless conduct, or intentional conduct. Under this requirement, there is an obligation of good faith and fair dealing imposed on the partner.

If a breach of fiduciary duty occurs, the partnership or other partners may have recourse against the breaching partner. Namely, the partners could bring a tort claim for breach of fiduciary duty against the partner to recover damages caused by the breach.

Source: Florida State Legislature, “Chapter 620: Partnership Laws,” accessed on March 5, 2016