KRS 362.1-404: General standards of partner's conduct.

(1) The fiduciary duties a partner owes to the partnership and the other partners include

the duty of loyalty and the duty of care set forth in subsections (2) and (3) of this

section.

(2) A partner's duty of loyalty to the partnership and the other partners i ncludes, but is

not limited to, the following:

(a) To account to the partnership and hold as trustee for it any property, profit, or

benefit derived by the partner in the conduct and winding up of the partnership

business or derived from a use by the partn er of partnership property,

including the appropriation of a partnership opportunity;

(b) To refrain from dealing with the partnership in the conduct or winding up of

the partnership business as or on behalf of a party having an interest adverse

to the partnership; and

(c) To refrain from competing with the partnership in the conduct of the

partnership business before the dissolution of the partnership.

(3) A partner's duty of care to the partnership and the other partners in the conduct and

winding up of t he partnership business includes, but is not limited to, acting with

the care that a reasonable person in a like position would exercise under similar

circumstances and in a manner that the partner believes to be in the best interests of

the partnership.

(4) A partner shall discharge the duties to the partnership and the other partners under

this subchapter or under the partnership agreement and exercise any rights

consistently with the obligation of good faith and fair dealing.

(5) A partner does not viola te a duty or obligation under this subchapter or under the

partnership agreement merely because the partner's conduct furthers the partner's

own interest. That a transaction was fair to the partnership shall not constitute a

defense to the breach of the obligation in subsection (2) of this section.

(6) A partner may lend money to, borrow money from, act as a surety, guarantor, or

endorser for, guarantee or assume one (1) or more specific obligations of, provide

collateral for and transact other business with the partnership, and as to each loan or

transaction the rights and obligations of the partner are the same as those of a person

who is not a partner, subject to other applicable law.

(7) This section applies to a person winding up the partnership busines s as the personal

or legal representative of the last surviving partner as if the person were a partner.