Partners in a partnership organization have several key responsibilities and duties to each other and to the partnership itself. These responsibilities are primarily fiduciary duties that ensure the partnership operates effectively and ethically. The main duties include:
- Duty of Care: Partners must avoid gross negligence, reckless conduct, intentional misconduct, or knowing violations of the law in managing the partnership's affairs
- Duty of Loyalty: Partners must act in the best interest of the partnership by accounting for any profits or benefits derived from the partnership, avoiding conflicts of interest, refraining from competing with the partnership, and not taking unfair advantage of the partnership or other partners
- Duty of Obedience: Partners must act consistently with the partnership’s business purpose and mission, guiding and overseeing the business functions accordingly
- Duty of Good Faith and Fair Dealing: Partners must deal honestly and fairly with each other, not concealing relevant information or misrepresenting facts, and must not seek secret profits at the expense of the partnership
Additional responsibilities include:
- Sharing losses and profits as agreed or equally if no agreement exists
- Providing full and accurate accounts and information related to the partnership
- Participating in management and decision-making processes, unless otherwise agreed
- Ensuring compliance with partnership agreements and legal requirements
- Maintaining transparency by allowing all partners to inspect partnership books and records
- Assigning roles and responsibilities according to each partner’s skills and contributions to ensure effective management of business areas such as finance, marketing, operations, and legal compliance
In summary, partners are expected to act with integrity, collaborate in managing the business, share profits and losses fairly, and uphold the partnership’s objectives and legal obligations
