Sec. 404. General standards of partner's conduct.

302 words·~1 min read·/il/chapter-805/act-206/404

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)The fiduciary duties a partner owes to the partnership and the other partners include the duty of loyalty and the duty of care set forth in subsections

(b)and

(c)of this Section.

(b)A partner's duty of loyalty to the partnership and the other partners includes the following:

(1)to account to the partnership and hold as trustee for it any property, profit, or

benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;

(2)to act fairly when a partner deals with the partnership in the conduct or winding up

of the partnership business as or on behalf of a party having an interest adverse to the partnership; and

(3)to refrain from competing with the partnership in the conduct of the partnership

business before the dissolution of the partnership.

(c)A partner's duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

(d)A partner shall discharge his or her duties to the partnership and the other partners under this Act or under the partnership agreement and exercise any rights consistent with the obligation of good faith and fair dealing.

(e)A partner does not violate a duty or obligation under this Act or under the partnership agreement merely because the partner's conduct furthers the partner's own interest.

(f)This Section applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.