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2018 Georgia Code 14-9-108 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-9-108 Case Law from Google Scholar Amendments to OCGA 14-9-108

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 9. Revised Uniform Limited Partnership Act, 14-9-100 through 14-9-1204.

ARTICLE 1 GENERAL PROVISIONS

14-9-108. Indemnification of partners or other persons; expansion, restriction, or elimination of partner's duties and liabilities in partnership agreement.

  1. Subject to any limitations expressly set forth in the partnership agreement, a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever, provided that the partnership shall not indemnify any person:
    1. For intentional misconduct or a knowing violation of law; or
    2. For any transaction for which the person received a personal benefit in violation or breach of any provision of the partnership agreement.

      This Code section shall govern limited partnerships to the exclusion of paragraph (2) of Code Section 14-8-18.

  2. To the extent that, at law or in equity, a partner has duties including but not limited to fiduciary duties and liabilities relating thereto to a limited partnership or another partner:
    1. The partner's duties and liabilities may be expanded, restricted, or eliminated by provisions in the partnership agreement; provided, however, that no such provision shall eliminate or limit the liability of a partner for intentional misconduct or a knowing violation of law or for any transaction for which the partner received a personal benefit in violation or breach of any provision of the partnership agreement; and
    2. The partner shall have no liability to the limited partnership or to any other partner for his or her good faith reliance on the provisions of the partnership agreement, including, without limitation, provisions thereof that relate to the scope of duties including but not limited to fiduciary duties of partners.

(Code 1981, §14-9-108, enacted by Ga. L. 1988, p. 1016, § 1; Ga. L. 1991, p. 1011, § 1; Ga. L. 1995, p. 470, § 12.)

COMMENT

Note to Georgia Revised Uniform Limited Partnership Act The section empowers the partnership to indemnify partners and other persons to the extent set forth in the partnership agreement except for intentional misconduct, knowing violation of law, or for transactions in which the person received a personal benefit contrary to the partnership agreement. It applies to the exclusion of Section 14-8-18(2) pursuant to Section 14-9-1204.

Note that, in addition to indemnification from adjudicated liability, there is authority in other states for the proposition that the partnership agreement can limit a partner's duty to the partnership, even where the partner receives a personal benefit. See Singer v. Singer, 634 P. 2d 766 (Okla. App. 1981) (partnership opportunities); Covalt v. High, 100 N.M. 700, 675 P. 2d 999 (N.M.App. 1983), cert. denied 100 N.M. 631, 674 P. 2d 521 (1984) (self-dealing). This is consistent with Section 14-8-21, a general partnership provision that applies to limited partnerships under Section 14-9-1204, which provides for liability of partners for profits derived by a partner "without the consent of the other partners." It follows a fortiori that the agreement could limit liability for unintentional conduct.

Even in the absence of an exculpatory provision or indemnification, there is authority against holding a general partner liable for ordinary negligence. See Thomas v. Milfelt, 222 S.W. 2d 359 (Mo.App. 1949) (partner only liable for losses caused by fraud, culpable negligence or bad faith). The general partners' personal liability to creditors serves as a significant constraint on general partner negligence and justifies according even greater deference to partner than to corporate director decisions.

Prior Georgia Law There was no comparable provision in the limited partnership act, so Section 14-8-18(2) applied. That provision required, in the absence of contrary agreement, indemnification of a partner by the partnership "in respect of payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business or for the preservation of its business or property."

Comparison With Official RULPA There is no comparable provision in the official version.

Cross-References See above, under "Note to Georgia Revised Uniform Limited Partnership Act."

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