LD 1609, Page 58 - 122th Legislature, FIRST SPECIAL Session

	4. Subsection (c) is derived from UPA Section 18(b) and provides
that the partnership shall reimburse partners for payments made and
indemnify them for liabilities incurred in the ordinary course of
the partnership's business or for the preservation of its business
or property. Reimbursement and indemnification is an obligation of
the partnership. Indemnification may create a loss toward which
the partners must contribute. Although the right to
indemnification is usually enforced in the settlement of accounts
among partners upon dissolution and winding up of the partnership
business, the right accrues when the liability is incurred and thus
may be enforced during the term of the partnership in an
appropriate case. See Section 405 and Comment. A partner's right
to indemnification under this Act is not affected by the
partnership becoming a limited liability partnership. Accordingly,
partners continue to share partnership losses to the extent of
partnership assets.

5. Subsection (d) is based on UPA Section 18(c). It makes
explicit that the partnership must reimburse a partner for an
advance of funds beyond the amount of the partner's agreed
capital contribution, thereby treating the advance as a loan.

6. Subsection (e), which is also drawn from UPA Section
18(c), characterizes the partnership's obligation under
subsection (c) or (d) as a loan to the partnership which accrues
interest from the date of the payment or advance. See Section
104(b) (default rate of interest).

7. Under subsection (f), each partner has equal rights in the
management and conduct of the business. It is based on UPA
Section 18(e), which has been interpreted broadly to mean that,
absent contrary agreement, each partner has a continuing right to
participate in the management of the partnership and to be
informed about the partnership business, even if his assent to
partnership business decisions is not required. There are
special rules regarding the partner vote necessary to approve a
partnership becoming (or canceling its status as) a limited
liability partnership. See Section 1001(b).

8. Subsection (g) provides that partners may use or possess
partnership property only for partnership purposes. That is the
edited remains of UPA Section 25(2)(a), which deals in detail
with the incidents of tenancy in partnership. That tenancy is
abolished as a consequence of the entity theory of partnerships.
See Section 501 and Comments.

9. Subsection (h) continues the UPA Section 18(f) rule that a
partner is not entitled to remuneration for services performed,
except in winding up the partnership. Subsection (h) deletes the

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