Which of the following acts by a partner would likely be considered a violation of the duty of loyalty under the Revised Uniform Partnership Act (RUPA)?

Answer options:

Refusing to inspect the partnership books.

Competing with the partnership business.

Making a business decision that results in a loss, provided it was made in good faith.

Voting against a proposal supported by the majority.

How to approach this question

Duty of Loyalty = No Stealing, No Competing, No Self-Dealing.

Full Answer

B.Competing with the partnership business.✓ Correct

The duty of loyalty includes the duty to refrain from competing with the partnership in the conduct of the partnership business before the partnership is dissolved.

Common mistakes

Confusing bad business decisions (Duty of Care) with disloyalty.

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