§ 40 — Rules determining rights and duties of partners

New York § 40

• Jurisdiction: New York
• Law PTR: Partnership
• Art. 4: Relations of Partners to One Another

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§ 40. Rules determining rights and duties of partners. The rights and\nduties of the partners in relation to the partnership shall be\ndetermined, subject to any agreement between them, by the following\nrules:\n 1. Each partner shall be repaid his contributions, whether by way of\ncapital or advances to the partnership property and share equally in the\nprofits and surplus remaining after all liabilities, including those to\npartners, are satisfied; and except as provided in subdivision (b) of\nsection twenty-six of this chapter, each partner must contribute toward\nthe losses, whether of capital or otherwise, sustained by the\npartnership according to his share in the profits.\n 2. Except as provided in subdivision (b) of section twenty-six of\nthis chapter, the partnership must indemnify every partner in respect of\npayments made and personal liabilities reasonably incurred by him in the\nordinary and proper conduct of its business, or for the preservation of\nits business or property.\n 3. A partner, who in aid of the partnership makes any payment or\nadvance beyond the amount of capital which he agreed to contribute,\nshall be paid interest from the date of the payment or advance.\n 4. A partner shall receive interest on the capital contributed by him\nonly from the date when repayment should be made.\n 5. All partners have equal rights in the management and conduct of the\npartnership business.\n 6. No partner is entitled to remuneration for acting in the\npartnership business, except that a surviving partner is entitled to\nreasonable compensation for his services in winding up the partnership\naffairs.\n 7. No person can become a member of a partnership without the consent\nof all the partners.\n 8. Any difference arising as to ordinary matters connected with the\npartnership business may be decided by a majority of the partners; but\nno act in contravention of any agreement between the partners may be\ndone rightfully without the consent of all the partners.\n