Section 10A-9A-4.08

General standards of general partner's conduct.

(a) The duties that a general partner has to the limited partnership and to the other partners include the duty of loyalty and the duty of care as described in subsections (b) and (c).

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

(1) to account to the limited partnership and to hold as trustee for it any property, profit, or benefit derived by the general partner in the conduct or winding up of the limited partnership's activities and affairs or derived from a use by the general partner of limited partnership property, including the appropriation of a limited partnership opportunity;

(2) 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 party having an interest adverse to the limited partnership; and

(3) to refrain from competing with the limited partnership in the conduct or winding up of the limited partnership's activities and affairs.

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

(d) A general partner shall discharge the duties to the limited partnership and to the other partners under this chapter and under the partnership agreement and exercise any rights consistently with the implied contractual covenant of good faith and fair dealing.

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

(Act 2016-379, §1.)