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362.1-103 Effect of partnership agreement -- Nonwaivable provisions.
(1)
(2)
(3)
Except as otherwise provided in subsection (2) of this section, relations among the
partners and between the partners and the partnership are governed by the
partnership agreement. To the extent the partnership agreement does not otherwise
provide, this subchapter governs relations among the partners and between the
partners and the partnership.
The partnership agreement shall not:
(a) Vary the rights and duties under KRS 362.1-105 except to eliminate the duty
to provide copies of statements to all of the partners;
(b) Unreasonably restrict the right of access to books and records under KRS
362.1-403(2) or unreasonably restrict the right to information KRS 362.1403(3);
(c) Eliminate the duty of loyalty under KRS 362.1-404(2) or 362.1-603(2)(c), but:
1.
The partnership agreement may identify specific types or categories of
activities that do not violate the duty of loyalty, if not manifestly
unreasonable; or
2.
All of the partners or a number or percentage specified in the partnership
agreement may authorize or ratify, after full disclosure of all material
facts, a specific act or transaction that otherwise would violate the duty
of loyalty;
(d) Unreasonably reduce the duty of care under KRS 362.1-404(3) or 362.1603(2)(c);
(e) Eliminate the obligation of good faith and fair dealing under KRS 362.1-404,
but the partnership agreement may prescribe the standards by which the
performance of the obligation is to be measured, if the standards are not
manifestly unreasonable;
(f) Vary the power to dissociate as a partner under KRS 362.1-602(1), except to
require the notice under KRS 362.1-601(1) to be in writing;
(g) Vary the right of a partner or the partnership to seek a partner's expulsion by
judicial determination or vary the right of a court to expel a partner in the
events specified in KRS 362.1-601(5);
(h) Vary the requirement to wind up the partnership business in cases specified in
KRS 362.1-801(4), (5), or (6); or
(i) Vary the law applicable to a limited liability partnership under KRS 362.1106(2); or
(j) Vary the liabilities and remedies under KRS 362.1-405 to a greater extent than
variations are in fact made under this section in the substantive rights in the
partnership agreement giving rise to the partner claims at issue.
If a written partnership agreement contains a provision to the effect that any
amendment to the partnership agreement must be in writing and adopted in
accordance with the provisions of the partnership agreement, that provision shall be
enforceable in accordance with its terms, and any agreement among the partners
(4)
(5)
(6)
concerning the partnership which is not in writing and adopted in accordance with
the provisions of the partnership agreement shall not be part of the partnership
agreement.
A partnership agreement may provide that the interest of any partner who fails to
make any contribution that the partner is obligated to make or who otherwise
violates an obligation undertaken in the partnership agreement shall be subject to
specified penalties for, or specified consequences of, such failure. Such penalty or
consequence may take the form of reducing or eliminating the defaulting partner's
proportionate interest in the partnership, subordinating the partner's interest to that
of nondefaulting partners, a forced sale of that interest, forfeiture of his or her
interest, the lending by other partners of the amount necessary to meet the
defaulting partner's commitment, a fixing of the value of his or her interest by
appraisal or by formula and redemption or sale of the interest in the partnership at
such value, or other penalty or consequence.
A partnership agreement may provide rights to any person, including a person who
is not a partner or not otherwise a party to the partnership agreement, to the extent
set forth therein.
No partner or other person shall have a vested property right resulting from any
provision of a partnership agreement which may not be modified by its amendment
or as otherwise permitted by law.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 133, sec. 51, effective July 15, 2010. -- Created
2006 Ky. Acts ch. 149, sec. 3, effective July 12, 2006.
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