In a partnership relationship, the law recognizes that partners owe one another a fiduciary duty. Partners owe each other and their partnership a duty in the nature of a fiduciary duty in the conduct and winding up of partnership business and are liable for a breach of that duty. A managing partner owes his co-partners the highest fiduciary duty recognized by law. Partnership disputes can be a tricky subject.
Partners owe the following fiduciary duties to each other:
- Full disclosure of all matters affecting the partnership
- Accounting for all partnership profits and property, i.e., refraining from self-dealing
- Refraining from competition with the partnership
Moreover, a fiduciary owes to its principal a strict duty of “good faith and candor,” as well as “the general duty of full disclosure respecting matters affecting the principal’s interests”; there is a general prohibition against the fiduciary’s using the relationship to benefit his personal interest, except with the full knowledge and consent of the principal.
Managing partners owe additional duties as a result of their position of trust and authority. A managing partner has a duty to administer the partnership affairs solely for the benefit of the partnership. A managing partner may not place himself in a position where it benefits him to violate this duty.
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If your partner has violated his fiduciary duty, or if you have been accused of violating your own fiduciary duty, the attorneys Powers Taylor can help. We invite you to contact us to discuss the matter as soon as possible.