"They've Created a Lamb with Mandibles of Death": Secrecy, Disclosure, and Fiduciary Duties in Limited Liability Firms

Indiana Law Journal

Volumn 76, Issue 1-2, 2001, Pages 271-312

  Callison, J William ^a   Vestal, Allan W ^a  

^a NONE

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EID: 0347870086     PISSN: 00196665     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (241)

1. The National Conference of Commissioners on Uniform State Laws ("NCCUSL") first promulgated the Revised Uniform Partnership Act ("RUPA") in 1994, and pronounced it ready for adoption by the states. REVISED UNIF. P'SHIP ACT (amended 1997), 6 U.L.A. 35-152 (Supp. 2000). A majority of the states have adopted some version of the RUPA, including section 403, which contains partner disclosure obligations and information rights, and section 404, which sets forth general standards for partner conduct. See id., 6 U.L.A. 1 (providing a table listing states that have adopted the RUPA); ROBERT W. HILLMAN, ALLAN W. VESTAL & DONALD J. WEIDNER, THE REVISED UNIFORM PARTNERSHIP ACT (2000). For discussions of entity proliferation, see William H. Clark, Jr., What the Business World Is Looking for in an Organizational Form: The Pennsylvania Experience, 32 WAKE FOREST L. REV. 149 (1997) (describing entity forms under Pennsylvania law); Robert R. Keatinge, Corporations, Unincorporated Organizations, and Unincorporations: Check the Box and the Balkanization of Business Organizations, 1 J. SMALL & EMERGING BUS. L. 201 (1997) (describing entity forms under Colorado law).
2. The National Conference of Commissioners on Uniform State Laws ("NCCUSL") first promulgated the Revised Uniform Partnership Act ("RUPA") in 1994, and pronounced it ready for adoption by the states. REVISED UNIF. P'SHIP ACT (amended 1997), 6 U.L.A. 35-152 (Supp. 2000). A majority of the states have adopted some version of the RUPA, including section 403, which contains partner disclosure obligations and information rights, and section 404, which sets forth general standards for partner conduct. See id., 6 U.L.A. 1 (providing a table listing states that have adopted the RUPA); ROBERT W. HILLMAN, ALLAN W. VESTAL & DONALD J. WEIDNER, THE REVISED UNIFORM PARTNERSHIP ACT (2000). For discussions of entity proliferation, see William H. Clark, Jr., What the Business World Is Looking for in an Organizational Form: The Pennsylvania Experience, 32 WAKE FOREST L. REV. 149 (1997) (describing entity forms under Pennsylvania law); Robert R. Keatinge, Corporations, Unincorporated Organizations, and Unincorporations: Check the Box and the Balkanization of Business Organizations, 1 J. SMALL & EMERGING BUS. L. 201 (1997) (describing entity forms under Colorado law).
3. The National Conference of Commissioners on Uniform State Laws ("NCCUSL") first promulgated the Revised Uniform Partnership Act ("RUPA") in 1994, and pronounced it ready for adoption by the states. REVISED UNIF. P'SHIP ACT (amended 1997), 6 U.L.A. 35-152 (Supp. 2000). A majority of the states have adopted some version of the RUPA, including section 403, which contains partner disclosure obligations and information rights, and section 404, which sets forth general standards for partner conduct. See id., 6 U.L.A. 1 (providing a table listing states that have adopted the RUPA); ROBERT W. HILLMAN, ALLAN W. VESTAL & DONALD J. WEIDNER, THE REVISED UNIFORM PARTNERSHIP ACT (2000). For discussions of entity proliferation, see William H. Clark, Jr., What the Business World Is Looking for in an Organizational Form: The Pennsylvania Experience, 32 WAKE FOREST L. REV. 149 (1997) (describing entity forms under Pennsylvania law); Robert R. Keatinge, Corporations, Unincorporated Organizations, and Unincorporations: Check the Box and the Balkanization of Business Organizations, 1 J. SMALL & EMERGING BUS. L. 201 (1997) (describing entity forms under Colorado law).
4. Texas enacted LLP legislation in 1992. TEX. REV. CIV. STAT. ANN. art. 1528n (2000). See Robert W. Hamilton, Registered Limited Liability Partnerships: Present at the Birth (Nearly), 66 U. COLO. L. REV. 1065, 1067 (1995). Since the Texas enactment, all fifty states have modified their partnership statutes to permit general partnerships to register as LLPs, thereby affording limited liability protection to partners. For a list of state LLP statutes, see J. WILLIAM CALLISON, PARTNERSHIP LAW AND PRACTICE: GENERAL AND LIMITED PARTNERSHIPS § 30A.01, at 30A-2 n.3 (1992). The LLP statutes afford different levels of liability protection, although the trend is toward "full-shield" protection. As with partnerships and LLCs, there is movement toward uniformity in LLP provisions, and in 1996 the NCCUSL passed amendments to the RUPA creating an LLP act. REVISED UNIF. P'SHIP ACT § 306(c), 6 U.L.A. 66; see, e.g., HILLMAN, VESTAL & WEIDNER, supra note 1, at 361-62. Although LLP statutes reverse the historic principle that general partners are jointly, or jointly and severally, liable for partnership debts, obligations, and liabilities, because LLPs are partnerships the LLP and the partners remain subject to partnership disclosure and fiduciary duty rules. The default rule for general partnership remains partner liability. See, e.g., CALLISON, supra, § 30A.01, at 30A-2 n.3 (listing states with LLP legislation).
5. Texas enacted LLP legislation in 1992. TEX. REV. CIV. STAT. ANN. art. 1528n (2000). See Robert W. Hamilton, Registered Limited Liability Partnerships: Present at the Birth (Nearly), 66 U. COLO. L. REV. 1065, 1067 (1995). Since the Texas enactment, all fifty states have modified their partnership statutes to permit general partnerships to register as LLPs, thereby affording limited liability protection to partners. For a list of state LLP statutes, see J. WILLIAM CALLISON, PARTNERSHIP LAW AND PRACTICE: GENERAL AND LIMITED PARTNERSHIPS § 30A.01, at 30A-2 n.3 (1992). The LLP statutes afford different levels of liability protection, although the trend is toward "full-shield" protection. As with partnerships and LLCs, there is movement toward uniformity in LLP provisions, and in 1996 the NCCUSL passed amendments to the RUPA creating an LLP act. REVISED UNIF. P'SHIP ACT § 306(c), 6 U.L.A. 66; see, e.g., HILLMAN, VESTAL & WEIDNER, supra note 1, at 361-62. Although LLP statutes reverse the historic principle that general partners are jointly, or jointly and severally, liable for partnership debts, obligations, and liabilities, because LLPs are partnerships the LLP and the partners remain subject to partnership disclosure and fiduciary duty rules. The default rule for general partnership remains partner liability. See, e.g., CALLISON, supra, § 30A.01, at 30A-2 n.3 (listing states with LLP legislation).
6. Texas enacted LLP legislation in 1992. TEX. REV. CIV. STAT. ANN. art. 1528n (2000). See Robert W. Hamilton, Registered Limited Liability Partnerships: Present at the Birth (Nearly), 66 U. COLO. L. REV. 1065, 1067 (1995). Since the Texas enactment, all fifty states have modified their partnership statutes to permit general partnerships to register as LLPs, thereby affording limited liability protection to partners. For a list of state LLP statutes, see J. WILLIAM CALLISON, PARTNERSHIP LAW AND PRACTICE: GENERAL AND LIMITED PARTNERSHIPS § 30A.01, at 30A-2 n.3 (1992). The LLP statutes afford different levels of liability protection, although the trend is toward "full-shield" protection. As with partnerships and LLCs, there is movement toward uniformity in LLP provisions, and in 1996 the NCCUSL passed amendments to the RUPA creating an LLP act. REVISED UNIF. P'SHIP ACT § 306(c), 6 U.L.A. 66; see, e.g., HILLMAN, VESTAL & WEIDNER, supra note 1, at 361-62. Although LLP statutes reverse the historic principle that general partners are jointly, or jointly and severally, liable for partnership debts, obligations, and liabilities, because LLPs are partnerships the LLP and the partners remain subject to partnership disclosure and fiduciary duty rules. The default rule for general partnership remains partner liability. See, e.g., CALLISON, supra, § 30A.01, at 30A-2 n.3 (listing states with LLP legislation).
7. Texas enacted LLP legislation in 1992. TEX. REV. CIV. STAT. ANN. art. 1528n (2000). See Robert W. Hamilton, Registered Limited Liability Partnerships: Present at the Birth (Nearly), 66 U. COLO. L. REV. 1065, 1067 (1995). Since the Texas enactment, all fifty states have modified their partnership statutes to permit general partnerships to register as LLPs, thereby affording limited liability protection to partners. For a list of state LLP statutes, see J. WILLIAM CALLISON, PARTNERSHIP LAW AND PRACTICE: GENERAL AND LIMITED PARTNERSHIPS § 30A.01, at 30A-2 n.3 (1992). The LLP statutes afford different levels of liability protection, although the trend is toward "full-shield" protection. As with partnerships and LLCs, there is movement toward uniformity in LLP provisions, and in 1996 the NCCUSL passed amendments to the RUPA creating an LLP act. REVISED UNIF. P'SHIP ACT § 306(c), 6 U.L.A. 66; see, e.g., HILLMAN, VESTAL & WEIDNER, supra note 1, at 361-62. Although LLP statutes reverse the historic principle that general partners are jointly, or jointly and severally, liable for partnership debts, obligations, and liabilities, because LLPs are partnerships the LLP and the partners remain subject to partnership disclosure and fiduciary duty rules. The default rule for general partnership remains partner liability. See, e.g., CALLISON, supra, § 30A.01, at 30A-2 n.3 (listing states with LLP legislation).
8. Several states permit limited partnerships to register as LLLPs, see CALLISON, supra note 2, § 30A.05, at 30A-10 (indicating states with LLLP legislation), thereby preventing general partners in limited partnerships from having joint and several liability for limited partnership debts and obligations. Although the default rule remains general partner liability, this is under discussion by the NCCUSL as part of its limited partnership law drafting project. See Larry E. Ribstein, Limited Partnerships Revisited, 67 U. CIN. L. REV. 953, 970-72 (1999).
9. Several states permit limited partnerships to register as LLLPs, see CALLISON, supra note 2, § 30A.05, at 30A-10 (indicating states with LLLP legislation), thereby preventing general partners in limited partnerships from having joint and several liability for limited partnership debts and obligations. Although the default rule remains general partner liability, this is under discussion by the NCCUSL as part of its limited partnership law drafting project. See Larry E. Ribstein, Limited Partnerships Revisited, 67 U. CIN. L. REV. 953, 970-72 (1999).
10. In 1988, the Internal Revenue Service announced that LLCs can combine limited liability protection for all owners with favorable partnership tax status. Rev. Rul. 88-76, 1988-2 C.B. 360. Prior to Revenue Ruling 88-76, the Internal Revenue Service posited that some owner needed personal liability for the entity's debts and obligations before partnership tax classification could be obtained. See J. WILLIAM CALLISON & MAUREEN A. SULLIVAN, LIMITED LIABILITY COMPANIES: A STATE-BY-STATE GUIDE TO LAW AND PRACTICE § 12.11 (1994) [hereinafter CALLISON & SULLIVAN, STATE-BY-STATE]. After Revenue Ruling 88-76, the LLC form became popular, and by 1996 all fifty states and the District of Columbia had enacted LLC legislation. See J. WILLIAM CALLISON & MAUREEN A. SULLIVAN, LIMITED LIABILITY COMPANIES: STATE STATUTES AND FEDERAL MATERIALS (1999) [hereinafter CALLISON & SULLIVAN, LIMITED LIABILITY COMPANIES] (containing all state LLC statutes). Many LLC statutes have been amended at least once since enactment, typically to track more lenient federal income tax classification rules and the Internal Revenue Service's recognition that single-member LLCs can be disregarded for federal income tax purposes. See Treas. Reg. § 301.7701-2 (1998). Some LLC statutes are amended frequently. For example, the Delaware LLC act was enacted in 1993 and amended in 1994, 1995, 1996, 1997, 1998, and 1999; the Virginia LLC act was enacted in 1991 and amended in 1992, 1993, 1994, 1995,1996, 1997, 1998, and 1999; and the Colorado LLC act was enacted in 1990 and amended in 1994 and 1997. The state LLC statutes contain various formulations of information disclosure rules and member and manager fiduciary duties. See infra Part II.B. In August 1994, the NCCUSL promulgated a Uniform Limited Liability Company Act ("ULLCA"), UNIF. LTD. LIAB. CO. ACT, 6A U.L.A. 429 (1995), containing its own information disclosure and fiduciary duty rules. Id. §§ 408-09, 6A U.L.A. 462. Several states, including Alabama, Hawaii, Illinois, Montana, Oregon, South Carolina, South Dakota, Vermont, and West Virginia, have enacted ULLCA-based LLC statutes, either initially or by replacing their original LLC statutes with the ULLCA, and more may do so in the future. The ULLCA was introduced after most states had already enacted LLC legislation, and at this time has had relatively little effect on preexisting state LLC statutes. In this regard, it can be compared with the RUPA, which has been enacted in a majority of the states.
11. In 1988, the Internal Revenue Service announced that LLCs can combine limited liability protection for all owners with favorable partnership tax status. Rev. Rul. 88-76, 1988-2 C.B. 360. Prior to Revenue Ruling 88-76, the Internal Revenue Service posited that some owner needed personal liability for the entity's debts and obligations before partnership tax classification could be obtained. See J. WILLIAM CALLISON & MAUREEN A. SULLIVAN, LIMITED LIABILITY COMPANIES: A STATE-BY-STATE GUIDE TO LAW AND PRACTICE § 12.11 (1994) [hereinafter CALLISON & SULLIVAN, STATE-BY-STATE]. After Revenue Ruling 88-76, the LLC form became popular, and by 1996 all fifty states and the District of Columbia had enacted LLC legislation. See J. WILLIAM CALLISON & MAUREEN A. SULLIVAN, LIMITED LIABILITY COMPANIES: STATE STATUTES AND FEDERAL MATERIALS (1999) [hereinafter CALLISON & SULLIVAN, LIMITED LIABILITY COMPANIES] (containing all state LLC statutes). Many LLC statutes have been amended at least once since enactment, typically to track more lenient federal income tax classification rules and the Internal Revenue Service's recognition that single-member LLCs can be disregarded for federal income tax purposes. See Treas. Reg. § 301.7701-2 (1998). Some LLC statutes are amended frequently. For example, the Delaware LLC act was enacted in 1993 and amended in 1994, 1995, 1996, 1997, 1998, and 1999; the Virginia LLC act was enacted in 1991 and amended in 1992, 1993, 1994, 1995,1996, 1997, 1998, and 1999; and the Colorado LLC act was enacted in 1990 and amended in 1994 and 1997. The state LLC statutes contain various formulations of information disclosure rules and member and manager fiduciary duties. See infra Part II.B. In August 1994, the NCCUSL promulgated a Uniform Limited Liability Company Act ("ULLCA"), UNIF. LTD. LIAB. CO. ACT, 6A U.L.A. 429 (1995), containing its own information disclosure and fiduciary duty rules. Id. §§ 408-09, 6A U.L.A. 462. Several states, including Alabama, Hawaii, Illinois, Montana, Oregon, South Carolina, South Dakota, Vermont, and West Virginia, have enacted ULLCA-based LLC statutes, either initially or by replacing their original LLC statutes with the ULLCA, and more may do so in the future. The ULLCA was introduced after most states had already enacted LLC legislation, and at this time has had relatively little effect on preexisting state LLC statutes. In this regard, it can be compared with the RUPA, which has been enacted in a majority of the states.
12. In 1995 the need to revise the Revised Uniform Limited Partnership Act ("RULPA") because of changes in the underlying partnership law was suggested. Allan W. Vestal, A Comprehensive Uniform Limited Partnership Act? The Time Has Come, 28 U.C. DAVIS L. REV. 1195 (1995). The NCCUSL has initiated the process. REVISED UNIF. LTD. P'SHIP ACT (Proposed Revisions Draft Mar. 2000), http://www.law.upenn.edu/bll/ulc/ulc_frame.htm ("Re-RULPA"). There have been several drafts of the Re-RULPA. The NCCUSL has ordered the drafters to de-link the RULPA from the general partnership act.
13. Vestal, supra, at 1029.
14. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
15. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
16. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
17. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
18. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
19. A "universal business entity" may be the newest business organization form on the horizon. The Texas legislature considered a universal business entity bill in 1999, H.B. 2681, 1999 Leg., Reg. Sess. (Tex. 1999), http://www.capitol.state.tx.us/tlo/76r/billtext/ HB02681I.HTM, and will likely enact a business entity statute in 2001, see H.B. 327, 2001 Leg., Reg. Sess. (Tex. 2001), http://www.capitol.state.tx.us/tlo/77r/billtext/ HB00327I.HTM. Colorado and other states have been experimenting with statutes homogenizing certain shared business organization characteristics. See, e.g., COLO. REV. STAT. §§ 7-90-102 to -201 (1999). Proponents of the universal business entity entertain drafting a "one-entity-fits-all" statute that would allow complete statutory flexibility without artificial distinctions among corporations, general partnerships, LLPs, limited partnerships, LLLPs, and LLCs. See, e.g., Thomas F. Blackwell, The Revolution Is Here: The Promise of a Unified Business Organization Law, 24 IOWA J. CORP. L. 333 (1999); Keatinge, supra note 1; Robert R. Keatinge, Universal Business Organization Legislation: Will It Happen? Why and When, 23 DEL. J. CORP. L. 29 (1998); John H. Matheson & Brent A. Olsen, A Call for a Unified Business Organization Law, 65 GEO. WASH. L. REV. 1 (1996); Dale A. Oesterle & Wayne M. Gazur, What's in a Name?: An Argument for a Small Business "Limited Liability Entity" Statute (with Three Subsets of Default Rules), 32 WAKE FOREST L. REV. 101 (1997). It is likely that any statutes enacted as a result of this process will incorporate disclosure and fiduciary duty rules and that the fundamental principles of such formulations will derive from the existing corporate and partnership constructs.
20. Treas. Reg. § 301.7701-2 (1986); see J. William Callison, New Entity Classification Regulations, COLO. LAW., April 1997, at 3.
21. Professors Dale Oesterle and Wayne Gazur have noted the lack of scholarly and popular debate about LLCs: The LLC was propelled through legislatures by a force of accountants, tax lawyers, and business development lobbies that met little organized opposition. Although sharing both partnership and corporate characteristics, the LLC was a new entity. The newness appeared to be part of the allure, and there was little scholarly debate over the desirable contours of the legislation in advance of enactment. Oesterle & Gazur, supra note 6, at 105; see also Larry E. Ribstein, The Emergence of the Limited Liability Company, 51 BUS. LAW. 1 (1995) (noting the rapid emergence of the LLC form). The Colorado experience was perhaps typical. The Colorado LLC act was drafted by a group of tax lawyers in late 1989 and enacted in 1990. See Colo. Rev. Stat. §§ 7-80-101, -1101 (West 1999). The drafters recognized the client benefits of combining limited liability protection and partnership tax treatment, knew that there were unresolved issues and that further "clean-up" legislation would be required, and made an appropriate political decision to push ahead with early enactment. Even the raison d'etre of the LLC form, limited liability protection, received little scholarly attention while the states were enacting LLC legislation. It was only after most states had enacted LLC legislation that any scholarly analysis of limited liability emerged. See William W. Bratton & Joseph A. McCahery, An Inquiry into the Efficiency of the Limited Liability Company: Of Theory of the Firm and Regulatory Competition, 54 WASH. & LEE L. REV. 629 (1997); Robert W. Hamilton & Larry E. Ribstein, Limited Liability and the Real World, 54 WASH. & LEE L. REV. 687 (1997); Susan Saab Fortney, Seeking Shelter in the Minefield of Unintended Consequences - the Trap of Limited Liability Law Firms, 54 WASH. & LEE L. REV. 717 (1997).
22. Professors Dale Oesterle and Wayne Gazur have noted the lack of scholarly and popular debate about LLCs: The LLC was propelled through legislatures by a force of accountants, tax lawyers, and business development lobbies that met little organized opposition. Although sharing both partnership and corporate characteristics, the LLC was a new entity. The newness appeared to be part of the allure, and there was little scholarly debate over the desirable contours of the legislation in advance of enactment. Oesterle & Gazur, supra note 6, at 105; see also Larry E. Ribstein, The Emergence of the Limited Liability Company, 51 BUS. LAW. 1 (1995) (noting the rapid emergence of the LLC form). The Colorado experience was perhaps typical. The Colorado LLC act was drafted by a group of tax lawyers in late 1989 and enacted in 1990. See Colo. Rev. Stat. §§ 7-80-101, -1101 (West 1999). The drafters recognized the client benefits of combining limited liability protection and partnership tax treatment, knew that there were unresolved issues and that further "clean-up" legislation would be required, and made an appropriate political decision to push ahead with early enactment. Even the raison d'etre of the LLC form, limited liability protection, received little scholarly attention while the states were enacting LLC legislation. It was only after most states had enacted LLC legislation that any scholarly analysis of limited liability emerged. See William W. Bratton & Joseph A. McCahery, An Inquiry into the Efficiency of the Limited Liability Company: Of Theory of the Firm and Regulatory Competition, 54 WASH. & LEE L. REV. 629 (1997); Robert W. Hamilton & Larry E. Ribstein, Limited Liability and the Real World, 54 WASH. & LEE L. REV. 687 (1997); Susan Saab Fortney, Seeking Shelter in the Minefield of Unintended Consequences - the Trap of Limited Liability Law Firms, 54 WASH. & LEE L. REV. 717 (1997).
23. Professors Dale Oesterle and Wayne Gazur have noted the lack of scholarly and popular debate about LLCs: The LLC was propelled through legislatures by a force of accountants, tax lawyers, and business development lobbies that met little organized opposition. Although sharing both partnership and corporate characteristics, the LLC was a new entity. The newness appeared to be part of the allure, and there was little scholarly debate over the desirable contours of the legislation in advance of enactment. Oesterle & Gazur, supra note 6, at 105; see also Larry E. Ribstein, The Emergence of the Limited Liability Company, 51 BUS. LAW. 1 (1995) (noting the rapid emergence of the LLC form). The Colorado experience was perhaps typical. The Colorado LLC act was drafted by a group of tax lawyers in late 1989 and enacted in 1990. See Colo. Rev. Stat. §§ 7-80-101, -1101 (West 1999). The drafters recognized the client benefits of combining limited liability protection and partnership tax treatment, knew that there were unresolved issues and that further "clean-up" legislation would be required, and made an appropriate political decision to push ahead with early enactment. Even the raison d'etre of the LLC form, limited liability protection, received little scholarly attention while the states were enacting LLC legislation. It was only after most states had enacted LLC legislation that any scholarly analysis of limited liability emerged. See William W. Bratton & Joseph A. McCahery, An Inquiry into the Efficiency of the Limited Liability Company: Of Theory of the Firm and Regulatory Competition, 54 WASH. & LEE L. REV. 629 (1997); Robert W. Hamilton & Larry E. Ribstein, Limited Liability and the Real World, 54 WASH. & LEE L. REV. 687 (1997); Susan Saab Fortney, Seeking Shelter in the Minefield of Unintended Consequences - the Trap of Limited Liability Law Firms, 54 WASH. & LEE L. REV. 717 (1997).
24. Professors Dale Oesterle and Wayne Gazur have noted the lack of scholarly and popular debate about LLCs: The LLC was propelled through legislatures by a force of accountants, tax lawyers, and business development lobbies that met little organized opposition. Although sharing both partnership and corporate characteristics, the LLC was a new entity. The newness appeared to be part of the allure, and there was little scholarly debate over the desirable contours of the legislation in advance of enactment. Oesterle & Gazur, supra note 6, at 105; see also Larry E. Ribstein, The Emergence of the Limited Liability Company, 51 BUS. LAW. 1 (1995) (noting the rapid emergence of the LLC form). The Colorado experience was perhaps typical. The Colorado LLC act was drafted by a group of tax lawyers in late 1989 and enacted in 1990. See Colo. Rev. Stat. §§ 7-80-101, -1101 (West 1999). The drafters recognized the client benefits of combining limited liability protection and partnership tax treatment, knew that there were unresolved issues and that further "clean-up" legislation would be required, and made an appropriate political decision to push ahead with early enactment. Even the raison d'etre of the LLC form, limited liability protection, received little scholarly attention while the states were enacting LLC legislation. It was only after most states had enacted LLC legislation that any scholarly analysis of limited liability emerged. See William W. Bratton & Joseph A. McCahery, An Inquiry into the Efficiency of the Limited Liability Company: Of Theory of the Firm and Regulatory Competition, 54 WASH. & LEE L. REV. 629 (1997); Robert W. Hamilton & Larry E. Ribstein, Limited Liability and the Real World, 54 WASH. & LEE L. REV. 687 (1997); Susan Saab Fortney, Seeking Shelter in the Minefield of Unintended Consequences - the Trap of Limited Liability Law Firms, 54 WASH. & LEE L. REV. 717 (1997).
25. Professors Dale Oesterle and Wayne Gazur have noted the lack of scholarly and popular debate about LLCs: The LLC was propelled through legislatures by a force of accountants, tax lawyers, and business development lobbies that met little organized opposition. Although sharing both partnership and corporate characteristics, the LLC was a new entity. The newness appeared to be part of the allure, and there was little scholarly debate over the desirable contours of the legislation in advance of enactment. Oesterle & Gazur, supra note 6, at 105; see also Larry E. Ribstein, The Emergence of the Limited Liability Company, 51 BUS. LAW. 1 (1995) (noting the rapid emergence of the LLC form). The Colorado experience was perhaps typical. The Colorado LLC act was drafted by a group of tax lawyers in late 1989 and enacted in 1990. See Colo. Rev. Stat. §§ 7-80-101, -1101 (West 1999). The drafters recognized the client benefits of combining limited liability protection and partnership tax treatment, knew that there were unresolved issues and that further "clean-up" legislation would be required, and made an appropriate political decision to push ahead with early enactment. Even the raison d'etre of the LLC form, limited liability protection, received little scholarly attention while the states were enacting LLC legislation. It was only after most states had enacted LLC legislation that any scholarly analysis of limited liability emerged. See William W. Bratton & Joseph A. McCahery, An Inquiry into the Efficiency of the Limited Liability Company: Of Theory of the Firm and Regulatory Competition, 54 WASH. & LEE L. REV. 629 (1997); Robert W. Hamilton & Larry E. Ribstein, Limited Liability and the Real World, 54 WASH. & LEE L. REV. 687 (1997); Susan Saab Fortney, Seeking Shelter in the Minefield of Unintended Consequences - the Trap of Limited Liability Law Firms, 54 WASH. & LEE L. REV. 717 (1997).
26. See CALLISON & SULLIVAN, STATE-BY-STATE, supra note 4, § 2.23 (discussing LLC uses).
27. UNIF. LTD. LIAB. CO. ACT § 101(11)-(12), 6A U.L.A. 432 (1995) (defining "managermanaged company" and "member-managed company").
28. Id. § 404(a), 6A U.L.A. 457.
29. Id. § 404(b).
30. HILLMAN, VESTAL & WEIDNER, supra note 1, at 201. Compare UNIF. LTD. LIAB. CO. ACT § 409(a)-(b), 6A U.L.A. 464, with REVISED UNIF. P'SHIP ACT § 404(a)-(b) (amended 1997), 6 U.L.A. 79 (Supp. 2000).
31. HILLMAN, VESTAL & WEIDNER, supra note 1, at 201. Compare UNIF. LTD. LIAB. CO. ACT § 409(a), (c), 6A U.L.A. 464, with REVISED UNIF. P'SHIP ACT § 404(a), (c), 6 U.L.A. 58.
32. HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Compare UNIF. LTD. LIAB. CO. ACT § 409(d), 6A U.L.A. 464, with REVISED UNIF. P'SHIP ACT § 404(d), 6 U.L.A. 58.
33. UNIF. LTD. LIAB. CO. ACT § 409(h), 6A U.L.A. 464.
34. Id. § 409(d) (alteration in original). Although ULLCA section 409(d) speaks to a good-faith and fair-dealing obligation with respect to duties as well as rights, this appears to be trumped by the ULLCA section 409(h)(1) statement that nonmanager members owe no fiduciary duties to the company or the other members.
35. HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Compare UNIF. LTD. LIAB. CO. ACT § 101, 6A U.L.A. 431 (no definition of good faith and fair dealing), with REVISED UNIF. P'SHIP ACT § 101, 6 U.L.A. 10 (no definition of good faith and fair dealing).
36. REVISED UNIF. P'SHIP ACT § 404 cmt. 4, 6 U.L.A. 61 ("The meaning of 'good faith and fair dealing' is not firmly fixed under present law . . . . It was decided to leave the terms undefined in the Act and allow the courts to develop their meaning based on the experience of real cases."); HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04; see J. William Callison, Blind Men and Elephants: Fiduciary Duties Under the Revised Uniform Partnership Act, the Uniform Limited Liability Company Act and Beyond, 1 J. SMALL & EMERGING BUS. L. 109, 141-53 (1997) (discussing numerous possible variations on good-faith obligation); Allan W. Vestal, Law Partner Expulsions, 55 WASH. & LEE L. REV. 1083, 1117-34 (discussing good- faith and fair-dealing obligation in partner-expulsion context).
37. REVISED UNIF. P'SHIP ACT § 404 cmt. 4, 6 U.L.A. 61 ("The meaning of 'good faith and fair dealing' is not firmly fixed under present law . . . . It was decided to leave the terms undefined in the Act and allow the courts to develop their meaning based on the experience of real cases."); HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04; see J. William Callison, Blind Men and Elephants: Fiduciary Duties Under the Revised Uniform Partnership Act, the Uniform Limited Liability Company Act and Beyond, 1 J. SMALL & EMERGING BUS. L. 109, 141-53 (1997) (discussing numerous possible variations on good-faith obligation); Allan W. Vestal, Law Partner Expulsions, 55 WASH. & LEE L. REV. 1083, 1117-34 (discussing good- faith and fair-dealing obligation in partner-expulsion context).
38. REVISED UNIF. P'SHIP ACT § 404 cmt. 4, 6 U.L.A. 61 ("The meaning of 'good faith and fair dealing' is not firmly fixed under present law . . . . It was decided to leave the terms undefined in the Act and allow the courts to develop their meaning based on the experience of real cases."); HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04; see J. William Callison, Blind Men and Elephants: Fiduciary Duties Under the Revised Uniform Partnership Act, the Uniform Limited Liability Company Act and Beyond, 1 J. SMALL & EMERGING BUS. L. 109, 141-53 (1997) (discussing numerous possible variations on good-faith obligation); Allan W. Vestal, Law Partner Expulsions, 55 WASH. & LEE L. REV. 1083, 1117-34 (discussing good-faith and fair-dealing obligation in partner-expulsion context).
39. REVISED UNIF. P'SHIP ACT § 404(d) cmt. 4, 6 U.L.A. 60-61; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203.
40. HILLMAN, VESTAL & WEIDNER, supra note 1, at 203; Allan W. Vestal, Fundamental Contractarian Error in the Revised Uniform Partnership Act of 1992, 73 B.U. L. REV. 523, 546-49 (1993).
41. HILLMAN, VESTAL & WEIDNER, supra note 1, at 203; Allan W. Vestal, Fundamental Contractarian Error in the Revised Uniform Partnership Act of 1992, 73 B.U. L. REV. 523, 546-49 (1993).
42. Compare UNIF. LTD. LIAB. CO. ACT § 409, 6A U.L.A. 464, with REVISED UNIF. P'SHIP ACT § 404, 6 U.L.A. 58.
43. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01; see UNIF. LTD. LIAB. CO. ACT § 409 cmt., 6A U.L.A. 465 ("Under subsections (a), (c) and (h), members and managers . . . owe to the company and to the other members and managers only the fiduciary duties of loyalty and care set forth in subsections (b) and (c) and the obligation of good faith and fair dealing set forth in subsection (d).").
44. HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-93. Compare UNIF. LTD. LIAB. CO. ACT § 408, 6A U.L.A. 462, with REVISED UNIF. P'SHIP ACT § 403, 6 U.L.A. 56.
45. UNIF. LTD. LIAB. CO. ACT § 408(a), 6A U.L.A. 462. As with the RUPA, the ULLCA does not require the LLC to maintain records. The official commentary states: Recognizing the informality of many limited liability companies, subsection (a) does not require a company to maintain any records. In general, a company should maintain records necessary to enable members to determine their share of profits and losses and their rights on dissociation. If inadequate records are maintained to determine those and other critical rights, a member may maintain an action for an accounting under Section 410(a). Normally, a company will maintain at least records required by state or federal authorities regarding tax and other filings. Id. § 408 cmt., 6A U.L.A. 463.
46. The official commentary states: The right to inspect and copy records maintained is not conditioned on a member or former member's purpose or motive. However, an abuse of the access and copy right may create a remedy in favor of the other members as a violation of the requesting member or former member's obligation of good faith and fair dealing. See Section 409(d). Id.
47. Id. § 408(b)(1).
48. Id. § 408(b)(2). In addition, members have a right to make demand to the firm and receive, at the firm's expense, a copy of any written operating agreement. Id. § 408(c). This has no parallel in the RUPA. Cf. REVISED UNIF. P'SHIP ACT § 403(b), 6 U.L.A. 56 (partnership may charge for documents supplied).
49. See UNIF. LTD. LIAB. CO. ACT § 408, 6A U.L.A. 462-63.
50. REVISED UNIF. P'SHIP ACT § 403 cmt. 3, 6 U.L.A. 57.
51. REVISED UNIF. P'SHIP ACT § 403, 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 181-83.
52. REVISED UNIF. P'SHIP ACT § 101, 6 U.L.A. 10.
53. UNIF. LTD. LIAB. CO. ACT § 408(a), 6A U.L.A. 462.
54. Id. § 101(16), 6A U.L.A. 432 (defining "record" as information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form). The commentary to ULLCA section 408 further states: The obligation to furnish access includes the obligation to insure that all records, if any, are accessible in intelligible form. For example, a company that switches computer systems has an obligation either to convert the records from the old system or retain at least one computer capable of accessing the records from the old system. Id. § 408 cmt., 6A U.L.A. 463.
55. REVISED UNIF. P'SHIP ACT § 103(b)(2), 6 U.L.A. 16 ("The partnership agreement may not . . . unreasonably restrict the right of access to books and records under Section 403(b). . . ."); HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87, 191-92.
56. UNIF. LTD. LIAB. CO. ACT § 103(b)(1), 6A U.L.A. 434 ("The operating agreement may not . . . unreasonably restrict a right to information or access to records under Section 408 . . . .").
57. It would have been consistent to couple broad information access rights with broad member use restrictions, or to couple narrow fiduciary obligations with limited information access rights. The ULLCA did neither.
58. BILL WATTERSON, THE AUTHORITATIVE CALVIN AND HOBBES: A CALVIN AND HOBBES TREASURY 116 (1990) ("Yep, mandibles of death, that's what he's got." (Calvin to Uncle Max, with reference to Hobbes)).
59. UNIF. LTD. LIAB. CO. ACT § 408(a) cmt., 6A U.L.A. 463.
60. It should be noted that a similar provision occurs in the official commentary to the RUPA. REVISED UNIF. P'SHIP ACT § 404 cmt. 4, 6 U.L.A. 61 ("In some situations the obligation of good faith includes a disclosure component. Depending on the circumstances, a partner may have an affirmative disclosure obligation that supplements the Section 403 duty to render information."). The two are distinguishable, however, since the RUPA commentary is consistent with the argument that the information disclosure provisions of the RUPA were not intended to displace the common law in this area, obviously not a consideration when dealing with the LLC form. HILLMAN, VESTAL & WEIDNER, supra note 1, at 189-90.
61. REVISED UNIF. P'SHP ACT § 404(d), 6 U.L.A. 58 ("A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." (alteration in original)).
62. Id. § 404 cmt. 4, 6 U.L.A. 60.
63. See HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04.
64. NAT'L CONFERENCE OF COMM'RS ON UNIF. STATE LAWS, 1991-92 REFERENCE BOOK 81 (1991).
65. UNIF. LTD. LIAB. CO. ACT §408(aq) cmt., 6A U.L.A. 463 (1995).
66. Id. § 409(h)(1), 6A U.L.A. 464 (Supp. 2000).
67. Cf. Tri-Growth Centre City, Ltd. v. Silldorf, Burdman, Duignan & Eisenberg, 265 Cal. Rptr. 330 (Cal. Ct. App. 1989). While a limited partner normally would not be involved in the management or otherwise participate in the partnership so as to incur fiduciary obligations to other partners, . . . there can be factual scenarios where a limited partner might be involved in the partnership in such a manner - for example, allowing him access to confidential information - so as to create fiduciary duties. Id. at 335 (citations omitted).
68. It might be argued that the parties can modify the odd statutory default in this regard. Following the RUPA, the ULLCA provides that statutory provisions may be altered by the operating agreement unless the provisions are included on a listing of statutory provisions as to which the right to amend by agreement is limited. UNIF. LTD. LIAB. CO. ACT § 103(b)(1), 6A U.L.A. 434. But the members' information rights are included in that listing: "The operating agreement may not... unreasonably restrict a right to information or access to records under Section 408 . . . ." Id. Parties unwilling to depend in structuring their firm on what a court would hold to be a "reasonable" restriction on information would be required to address the asymmetry by increasing the duties of nonmanager members. There is no indication under the ULLCA that parties to an operating agreement cannot increase fiduciary obligations or define the good-faith and fair-dealing obligation. However, these modifications require ex ante contracting and, even when considered, raise the transaction costs of using the LLC form.
69. The Arizona, Kansas, Maryland, Nebraska, New Mexico, Nevada, Texas, Utah, and Wyoming LLC acts make no reference to member or manager fiduciary duties. These states therefore leave the duty question to the operating agreement or to judicial common-law development. In addition, prior to their adoptions of the ULLCA, the Alabama, South Dakota, and West Virginia LLC acts fell into this category.
70. The RMBCA differentiates only slightly between the standards of conduct applicable to directors and officers: General Standards for Directors (a) A director shall discharge his duties as a director, including his duties as a member of a committee: (1) in good faith; (2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) in a manner he reasonably believes to be in the best interests of the corporation. (b) In discharging his duties a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: (1) one or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; (2) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or (3) a committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence. (c) A director is not acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted. (d) A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section. REVISED MODEL BUS. CORP. ACT § 8.30 (1991). Standards for Conduct of Officers (a) An officer with discretionary authority shall discharge his duties under that authority: (1) in good faith; (2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) in a manner he reasonably believes to be in the best interests of the corporation. (b) In discharging his duties an officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: (1) one or more officers or employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented; (2) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence. (c) An officer is not acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted. (d) A officer is not liable for any action taken as an officer, or any failure to take any action, if he performed the duties of his office in compliance with this section. Id. § 8.42.
71. See ALASKA STAT. § 10.50.135(a) (Michie 1998); COLO. REV. STAT. ANN. § 7-80-406(1) (West 1999); CONN. GEN. STAT. ANN. § 34-141(a) (West 1997); FLA. STAT. ANN. § 608.4225(1)(a) (West Supp. 1997); GA. CODE ANN. § 14-11-305(1) (1994 & Supp. 2000); IOWA CODE ANN. § 490A.706(1) (West 1999); LA. REV. STAT. ANN. § 12:1314(1.) (West 1994 & Supp. 2000); ME. REV. STAT. ANN. tit. 31, § 652(1) (West Supp. 1996); MICH. COMP. LAWS ANN. § 450.4404(1) (West Supp. 2000); MINN. STAT. ANN. § 322B.69 (West 1995 & Supp. 2000); MISS. CODE ANN. § 79-29-402(1)(a)(1999); MO. STAT. ANN. § 347.088(1) (West Supp. 2000); N.Y. LTD. LIAB. CO. LAW §409(a) (McKinney 1999); N.C. GEN. STAT. § 57C-3-22(b) (West 2000); N.D. CENT. CODE § 10-32-96 (1995 & Supp. 1999); OHIO REV. CODE ANN. § 1705.29(B) (Anderson 1997); OKLA. STAT. ANN. tit. 18, § 2016(1) (West 1999); 15 PA. CONS. STAT. ANN. § 8943 (West 1995) (referring to id. § 1712(a)); R.I. GEN. LAWS § 7-16-17(a) (1999); TENN. CODE ANN. § 48-241-111 (1995). Before they adopted the ULLCA, Hawaii, Oregon, South Carolina, and Vermont were in this category.
72. REVISED MODEL Bus. CORP. ACT § 8.30(a)(2). Twenty state LLC acts apply some variation of the ordinarily prudent person test to the actions of LLC managers and managing members. These states also impose the good-faith standard. See ALASKA STAT. § 10.50.135(a) (Michie 1998); COLO. REV. STAT. ANN. § 7-80-406(1) (West 1999); CONN. GEN. STAT. ANN. § 34-141(a) (West 1997); FLA. STAT. ANN. § 608.4225(1)(c) West Supp 1997); GA. CODE ANN. § 14-11-305(1)(1994 & Supp. 2000); IOWA CODE ANN. § 490A.706(1)(West 1999); LA. REV. STAT. ANN. § 12:1314(1) (West 1994 & Supp. 2000); ME. REV. STAT. ANN. tit. 31, § 652(1)(West 1996); MICH. COMP. LAWS ANN. § 450.4404(1) (West Supp. 2000); MINN. STAT. ANN. § 322B.663 subd. 1 (West 1995 & Supp. 2000); Miss. CODE ANN. § 79-29-402(1)(a)-(b) (1999); MO. REV. STAT. § 347.088(1) (1993); N.Y. LTD. LIAB. CO. LAW § 409(a) (McKinney 1999); N.C. GEN. STAT. § 57C-3-22(b) (2000); N.D. CENT. CODE § 10-32-96 (1995 & Supp. 1999); OHIO REV. CODE ANN. § 1705.29(B) (Anderson 1997); OKLA. STAT. ANN. tit. 18, § 2016(1) (West 1999); 15 PA. CONS. STAT. ANN. § 8943 (West 1995) (referring to id. § 1712(a)); R.I. GEN. LAWS §7-16-17(a) (1999); TENN. CODE ANN. §48-239-115(a) (1995). Before adopting the ULLCA, Oregon and Vermont were in this category.
73. REVISED MODEL BUS. CORP. ACT § 8.30(a)(3). Nineteen state LLC acts require LLC managers and managing members to perform with the belief that their actions are in the LLC's best interests. These states also impose the good-faith and the due-care tests. See ALASKA STAT. § 10.50.135(a), (b) (Michie 1998); COLO. REV. STAT. § 7-80-406(1) (West 1999); CONN. GEN. STAT. ANN. § 34-141(a), (c) (West 1997); FLA. STAT. ANN. § 608.4225(1)(c), (4) (West Supp. 2000); GA. CODE ANN. § 14-11-305(1) (1994 & Supp. 2000); IOWA CODE ANN. § 490A.706(1), (3) (West 1999); LA. REV. STAT. ANN. § 12:1314(1)-(3) (West 1994 & Supp. 2000); ME. REV. STAT. ANN. tit, 31, § 652(1) (West 1996); MICH. COMP. LAWS ANN. § 450.4404(1), (3) (West Supp. 2000); MINN. STAT. ANN. § 322B.663 subd. 1 (West 1995 & Supp. 2000); MISS. CODE ANN. §79-29-402(1)(c)(1999); MO. ANN. STAT.§347.088(1)(West Supp. 2000); N.C. GEN. STAT. § 57C-3-22(b) (West 2000); N.D. CENT. CODE § 10-32-96 (1995 & Supp. 1997); OHIO REV. CODEANN. § 1705.29(B) (Anderson 1997); OKLA. STAT. ANN. tit. 18, § 2016(1) (West 1999); 15 PA. CONS. STAT. ANN. § 8943 (West 1995) (referring to id. § 1712(a)); R.I. GEN. LAWS § 7-16-17(a) (1999); TENN. CODE ANN. § 48-241-111 (1995). The New York LLC act does not set forth a best-interests standard. See N.Y. LTD. LIAB. CO. LAW § 409 (McKinney 1999).
74. See ALASKA STAT. § 10.50.135 (Michie 1998); COLO. REV. STAT. ANN. § 7-80-406(2) (West 1999); CONN. GEN. STAT. ANN. § 34-141(b), (c) (West 1997); FLA. STAT. ANN. § 608.4225(2), (4) (West Supp. 1997); GA. CODE ANN. § 14-11-305(2), (3) (1994 & Supp. 2000); IOWA CODE ANN. § 490A. 706(2), (3) (West 1999); LA. REV. STAT. ANN. § 12:1314(2), (3) (West 1994 & Supp. 2000); ME. REV. STAT. ANN. tit. 31, § 652 (West 1996); MICH. COMP. LAWS ANN. § 450.4404(2), (3) (West Supp. 2000); MINN. STAT. ANN. §322B.663 subd. 2(a), 2(b) (West 1995 & Supp. 2000); MISS. CODE ANN. § 79-29-402(2), (3) (1999); N.Y. LTD. LIAB. CO. LAW § 32A-409(b) (McKinney 1999); N.C. GEN. STAT. § 57C-3-22 (West 2000); OHIO REV. CODE ANN. § 1705.29(C), (D) (Anderson 1997); OKLA. STAT. ANN. tit. 18, § 2016(2), (3) (West 1999); 15 PA. CONS. STAT. ANN. § 8943(b) (West 1995) (referring to id. § 1712(a), (b)); R.I. GEN. LAWS § 7-16-17(b), (c) (1999); TENN. CODE ANN. § 48-241-111 (1995).
75. "A person who is a manager or a managing member of a limited liability company shall perform the duties of management . . . with the care, including reasonable inquiry, that an ordinary prudent person in a like position would use under similar circumstances." ALASKA STAT. § 10.50.135(a) (Michie 1998).
76. Florida's statute provides: In discharging [his] duties, a manager or managing member may consider such factors as [he] deems relevant, including the long-term prospects and interests of the limited liability company and its members, and the social, economic, legal, or other effects of any action on the employees, suppliers, customers of the limited liability company, the communities and society in which the limited liability company operates, and the economy of the state and the nation. FLA. STAT. ANN. § 608.4225(3) (West Supp. 2000). Minnesota's statute provides: In discharging the duties of the position of governor, a governor may, in considering the best interests of the limited liability company, consider the interests of the limited liability company's employees, customers, suppliers, and creditors, the economy of the state and nation, community and societal considerations, and the long-term as well as the short-term interests of the limited liability company and its members including the possibility that these interests may be best served by the continued independence of the limited liability company. MINN. STAT. ANN. § 3228.663(5) (West 1995 & Supp. 2000). Pennsylvania's statute provides: In discharging the duties of their respective positions, [managers] may, in considering the best interests of the corporation, consider the effects of any action upon employees, upon suppliers and customers of the corporation and upon communities in which offices or other establishments of the corporation are located, and all other pertinent factors. 15 PA. CONS. STAT. ANN. § 8943 (West 1995) (referring to id. § 1716(a)).
77. ARK. CODE ANN. § 4-32-402(a) (Michie 1996) (gross negligence or willful misconduct); IDAHO CODE § 53-622(1) (Michie 1994) (same); IND. CODE § 23-18-4-2(a) (1998) (willful misconduct or recklessness); KY. REV. STAT. ANN. § 275-170 (1) (Michie Supp. 1998) (wanton or reckless misconduct); N.H. REV. STAT. ANN. § 304-C:31(IV) (1995) (gross negligence or willful misconduct); N.J. STAT. ANN. § 42:28-26 (West Supp. 2000) (same); OHIO REV. CODE ANN. § 1705.29(D)(Anderson 1997) (deliberate intent or reckless disregard); WASH. REV. CODE ANN. § 25.15.155(1) (West Supp. 2001) (gross
78. CAL. CORP. CODE § 17153 (West Supp. 2000).
79. VA. CODE ANN. § 13.1024.1(A) (Michie 1999).
80. DEL. CODE ANN. tit. 6, § 18-405 (1999).
81. MASS. ANN. LAWS ch. 156C, § 63(b) (Law. Co-op. 1996).
82. See ARK. CODE ANN. § 4-32-402(b) (Michie 1996); CONN. GEN. STAT. ANN. § 34-141(e) (West 1997); HAW. REV. STAT. § 428-409(b)(i) (Supp. 1999); IDAHO CODE § 53-622(2) (Michie 1994); IND. CODE § 23-18-4-2 (1998); KY. REV. STAT. ANN. § 275.170(Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1314A(5) (West 1994 & Supp. 2000); ME. REV. STAT. ANN. tit. 31, § 652(2) (West 1996 & Supp. 1999); MICH. COMP. LAWS ANN. § 450.4404(5) (West Supp. 2000); MO. ANN. STAT. § 347.088(2) (West Supp. 2000); MONT. CODE ANN. § 35-8-310(2)(a) (2000); N.H. REV. STAT. ANN. § 304-C:31(V)(b) (1995); N.M. STAT. ANN. § 53-19-16(D) (Michie 1995 & Supp. 1999); N.C. GEN. STAT. § 57C-3-22(e) (1996); OKLA. STAT. ANN. tit. 18, § 2016(5) (West 1992); OR. REV. STAT. § 63.155(2) (1999); R.I. GEN. LAWS § 7-16-17(e) (1992); S.C. CODE ANN. § 33-43-402(A)(1) (Law. Co-op. Supp. 1999); TENN. CODE ANN. § 48-240-102(a)(1995); VT. STAT. ANN. tit. 11, § 3059(b)(1)(1997); WASH. REV. CODE ANN. § 25.15.155(2) (West 1999); W. VA. CODE ANN. § 31 B-4-409(b)(1) (Michie 1996); WIS. STAT. ANN. § 183.0402(2) (West Supp. 2000).
83. See CONN. GEN. STAT. ANN. § 34-141 (West 1993); DEL. CODE ANN. tit. 6, § 18-406 (1999); GA. CODE ANN. § 14-11-305(4)(B) (Supp. 1997); MASS. ANN. LAWS ch. 156C, § 63 (Law. Co-op. 1996 & Supp. 2000); N.H. REV. STAT. ANN. § 304-C:35 (1995); N.J. STAT. ANN. § 42:2B-31 (West Supp. 2000).
84. See ARK. CODE ANN. § 4-32-404(a) (Michie 1996); CAL. CORP. CODE § 17005(b) (West Supp. 2000); COLO. REV. STAT. § 7-80-108 (West 1999) (limited power to modify); CONN. GEN. STAT. ANN. § 34-143(1) (West 1997); DEL. CODE ANN. tit. 6, § 18-405 (1999) (duties exist by agreement); FLA. STAT. ANN. § 608.4223 (West Supp. 1997); GA. CODE ANN. § 14-11-305(4)(a) (1994 & Supp. 2000); IDAHO CODE § 53-624 (Michie 1994); IND. CODE § 23-18-4-2(a)(1998); IOWA CODE ANN. § 490A.703(1)(West 1999); KY. REV. STAT. ANN. § 275-170(1) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1315 (West 1994); MASS. ANN. LAWS ch. 156C, §§ 8(b), 63(b) (Law. Co-op. 1996 & Supp. 2000); MICH. COMP. LAWS ANN. § 450.4407 (West Supp. 2000); MINN. STAT. ANN. § 322B.115(4) (West 1995); MISS. CODE ANN. § 79-29-403 (1999); MO. ANN. STAT. § 347.081 (West Supp. 2000); N.H. REV. STAT. ANN. § 304-C:31(V) (1995); N.J. STAT. ANN. § 42:28-26 (West Supp. 2000); N.D. CENT. CODE § 10-32-07(4)(c) (1995 & Supp. 1999) (referring to id. § 10-32-71); OKLA. STAT. ANN. tit. 18, § 2017 (West 1999); R.I. GEN. LAWS §7-16-18 (1999); TENN. CODE ANN. § 48-239-115(d) (1995); VA. CODE § 13.1-1025 (1999); WIS. STAT. ANN. § 183.0402(3) (West Supp. 1999).
85. ME. REV. STAT. ANN. tit. 31 § 652(3) (West 1996 & Supp. 1999).
86. The Arizona, Kansas, Maryland, Nebraska, Nevada, New Mexico, Texas, Utah and Wyoming LLC acts make no reference to member or manager fiduciary duties.
87. California, Colorado, Delaware, Florida, Iowa, Michigan, Minnesota, Mississippi, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, Tennessee, Virginia, and Washington.
88. See ARK. CODE ANN. § 4-32-402(c) (Michie 1996); IDAHO CODE § 53-622(3) (Michie 1994); KY. REV. STAT. ANN. § 275-170(3) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1314 (West 1994 & Supp. 2000); N.H. REV. STAT. ANN. § 304-C:31(V)(c) (1995); 15 PA. CONS. STAT. ANN. § 8943(b)(2) (West 1995).
89. See ALASKA STAT. § 10.50.130 (Michie 1998); GA. CODE ANN. § 14-11-305(1) (1994 & Supp. 2000); IND. CODE § 23-18-4-2(c) (1998); MO. REV. STAT. § 359-088 (West Supp. 2000).
90. See CONN. GEN. STAT. ANN. § 34-141 (West 1997); ME. REV. STAT. ANN. tit. 31, § 652 (West 1996 & Supp. 1999); Wis. STAT. ANN. § 183.0402 (West Supp. 1999).
91. MASS. ANN. LAWS ch. 156C, § 63(b) (Law. Co-op. 1996 & Supp. 2000).
92. It should be noted that the access of managers is not addressed in most state LLC statutes. Similarly, managing members are not expressly given access rights beyond the access rights they obtain as members. See ALA. CODE § 10-12-16(b) (1998); ALASKA STAT. § 10.50.870 (1998); ARIZ. REV. STAT. ANN. § 29-607(b) (West 1998); ARK. CODE ANN. § 4-32-405 (Michie 1996); CAL. CORP. CODE § 17106 (West Supp. 2000); COLO. REV. STAT. ANN. § 7-80-411 (West 1999); CONN. GEN. STAT. ANN. § 34-144 (West 1997); FLA. STAT. ANN. § 608.4101 (West Supp. 2000); GA. CODE ANN. § 14-11-313 (1994 & Supp. 2000); HAW. REV. STAT. § 428-408 (Supp. 1999); IDAHO CODE § 53-625 (Michie 1994); 805 ILL. COMP. STAT. ANN. 180/10-15 (West Supp. 2000); IND. CODE § 23-18-4-8 (1998); IOWA CODE ANN. § 490A.709 (West 1999); KAN. STAT. ANN. § 56-la205 (1994); KY. REV. STAT. ANN. § 275-185 (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319 (West 1994); MD. CODE ANN., CORPS. & ASS'NS § 4A-406 (1999); MASS. ANN. LAWS ch. 156C, § 10 (Law. Co-op. 1996 & Supp. 2000); MICH. COMP. LAWS ANN. § 450.4503 (West Supp. 2000); MINN. STAT. ANN. § 322B.373 (West 1995 & Supp. 2000); Miss. CODE ANN. § 79-29-308 (1999); MO. REV, STAT. § 347-091(2) (West 2000); MONT. CODE ANN. § 35-8-405(2) (West 2000); NEV. REV. STAT. ANN. § 86.241 (1999); N.M. STAT. ANN. § 53-19-19 (Michie 1999); N.Y. LTD. LIAB. CO. LAW § 32A-1102(b), (c) (McKinney 1999); N.C. GEN. STAT. § 57C-3-04 (West 2000); N.D. CENT. CODE § 10-32-51 (1995 & Supp. 1999); OHIO REV. CODE ANN. § 1705.22 (Anderson 1997); OR. REV. STAT. § 70.050(2) (1999); 15 PA. CONS. STAT. ANN. § 8525 (West 1995); R.I. GEN. LAWS § 7-16-22(b) (1999); S.C. CODE ANN. § 33-43-405 (Law. Co-op. Supp. 1999); S.D. CODIFIED LAWS §47-34-11 (Michie 2000); TENN. CODE ANN. §48-228-101 to -102 (1995); TEX. REV. CIV. STAT. ANN. art. 1528n, § 2.22(E) (Vernon 1997); UTAH CODE ANN. § 48-2B-119(2) (1998); VT. STAT. ANN. tit. 11, § 3058 (1997); VA. CODE ANN. § 13.1-1028(B) (1999); W. VA. CODE ANN. § 31B-4-408 (Michie 1996); WIS. STAT. ANN. § 183.0405 (West Supp. 1999). Six states do specifically provide for manager access to information, typically granting full access to information required to be maintained for purposes reasonably related to their managerial positions. See DEL. CODE ANN. tit. 6, § 18-305(b) (1999); ME. REV. STAT. ANN. tit. 31, § 655(2)(B) (West 1996); N.H. REV. STAT. ANN. § 304-C:28(I), (II) (1995); N.J. STAT. ANN. § 42:28-25 (West Supp. 2000); OKLA. STAT. ANN. tit. 18, § 2021(C) (West 1999); WASH. REV. CODE § 25.15.135(3) (West Supp. 2000).
93. See ALA. CODE § 10-12-16(a) (1998); ARIZ. REV. STAT. ANN. § 29-607(a) (West 1998); CAL. CORP. CODE § 17058 (West Supp. 2000); COLO. REV. STAT. ANN. § 7-80-411 (West 1999); CONN. GEN. STAT. ANN. § 34-144 (West 1997); FLA. STAT. ANN. § 608.4101(1) (West Supp. 2000); 805 ILL. COMP. STAT. ANN. 180/1-35 (West Supp. 2000); IND. CODE § 23-18-4-8(a) (1998); IOWA CODE ANN. § 490A.709(1) (West 1999); KY. REV. STAT. ANN. § 275-185(1) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319(A) (West 1994); ME. REV. STAT. ANN. tit. 31, § 655(1) (West 1996); MASS. ANN. LAWS ch. 156C, § 9(a) (Law. Co-op. 1996 & Supp 2000); MICH. COMP. LAWS ANN. § 450.4213 (West Supp. 2000); MINN. STAT. ANN. § 322B.373(1) (West 1995 & Supp. 2000); MISS. CODE ANN. § 79-29-107(1) (1999); MO. ANN. STAT. § 347.091(1) (West 2000); NEV. REV. STAT. ANN. § 86.241(1) (Michie 1999); N.M. STAT. ANN. § 53-19-19 (Michie 1999); N.Y. LTD. LIAB. CO. LAW § 32A-1102(a) (McKinney 1999); N.D. CENT. CODE § 10-32-51(1) (1995 & Supp. 1999); R.I. GEN. LAWS § 7-16-22(1) (1999); S.C. CODE ANN. § 33-43-405(A) (Law. Co-op Supp. 1999); S.D. CODIFIED LAWS § 47-34-11 (Michie 2000); TENN. CODE ANN. § 48-228-101 to -102 (1995); TEX. REV. STAT. ANN. art. 1528n, § 2.22(A) (Vernon 2001); UTAH CODE ANN. § 48-2b-119(1) (1998); VA. CODE ANN. § 13.1-1028(A) (1999); WASH. REV. CODE ANN. § 25.15.135(1) (West Supp. 2000); WIS. STAT. ANN. § 183.0405(1) (West Supp. 1999).
94. REVISED MODEL BUS. CORP. ACT § 16.01 (1996); REVISED UNIF. LTD. P'SHIP ACT § 105(a) (amended 1997), 6A U.L.A. 88-89 (1995).
95. REVISED UNIF. P'SHIP ACT § 403 cmt. 1 (amended 1997), 6 U.L.A. 56 (Supp. 2000).
96. See ALASKA STAT. § 10.50.860 (Michie 1998); ARK. CODE ANN. § 4-32-405 (Michie 1996); GA. CODE ANN. § 14-11-313 (1994); IDAHO CODE § 53-625(1) (Michie 1994); MONT. CODE ANN. § 35-8-405(1) (1999); OKLA. STAT. ANN. tit. 18, § 2021(A) (West 1999).
97. Kansas, Nebraska, Pennsylvania, and Wyoming.
98. See DEL. CODE ANN. tit. 6, § 18-305(a) (1999); MD. CODE ANN., CORPS. & ASS'NS § 4A-406(a) (1999); N.H. REV. STAT. ANN. § 304-C:28(I) (1995); N.J. STAT. ANN. § 42:2B-25(a) (West Supp. 2000); N.C. GEN. STAT. § 57C-3-04(a) (2000); OHIO REV. CODE ANN. § 1705.22(A)(1) (West 1997); VT. STAT. ANN. tit. 11, § 3058 (1997).
99. E.g., ALA. CODE § 10-12-16(b) (1999).
100. "Those records, and any other books and records of the limited liability company, wherever situated, are subject to inspection and copying for any other purpose at the reasonable request, and at the expense of, any member or the member's agent or attorney during regular business hours." ALA. CODE § 10-12-16(b) (1999). "A limited liability company shall make its books and records of account, or certified copies of them, reasonably available for inspection and copying at its registered office or principal office in the state by a member of the company." ALASKA STAT. § 10.50.870(a) (1998).
101. See ARIZ. REV. STAT. ANN. § 29-607 (West Supp. 1998).
102. See ALA. CODE § 10-12-16(b) (1999); ALASKA STAT. § 10.50.870 (1998); ARK. CODE ANN. § 4-32-405 (Michie Supp. 1996); COLO. REV. STAT. ANN. § 7-80-411 (West 1999); CONN. GEN. STAT. ANN. § 34-144(a) (West 1997); FLA. STAT. ANN. § 608.4101(2) (West Supp. 2000); GA. CODE ANN. § 14-11-313 (1994); IDAHO CODE § 53-625(1) (Michie 1994); 805 ILL. COMP. STAT. ANN. 180/10-15 (West Supp. 2000); IND. CODE § 23-18-4-8 (1998); KY. REV. STAT. ANN. § 275-185(2) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319(B) (West 1994); MASS. ANN. LAWS ch. 156C, § 9(b) (Law. Co-op. 1996); MICH. COMP. LAWS ANN. § 450.4503(2) (West Supp. 2000); MINN. STAT. ANN. § 322B.373 (West 1995 & Supp. 2000); MISS. CODE ANN. § 79-29-107(2) (1996); MO. ANN. STAT. § 347.091(2) (West Supp. 2000); NEV. REV. STAT. ANN. 86.241(2) (Michie 1999); N.H. REV. STAT. ANN. § 304-C:28(VI) (1995); N.D. CENT. CODE § 10-32-51(2) (Supp. 1997); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999); R.I. GEN. LAWS § 7-16-22(b) (1999); TENN. CODE ANN. § 48-228-102(a) (1994); WASH. REV. CODE ANN. § 25.15.135(2) (West Supp. 2000); WIS. STAT. ANN. § 183.0405(2) (West Supp. 1999).
103. See ALASKA STAT. § 10.50.870(1998); DEL. CODE ANN. tit. 6, § 18-305(e) (1999); KY. REV. STAT. ANN. § 275-185(2) (Michie Supp. 1998); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); MD. CODE ANN., CORPS. & ASS'NS § 4A-406(a) (1999); MICH. COMP. LAWS ANN. § 450.4503(2) (West Supp. 2000); MINN. STAT. ANN. § 322B.373 (West 1995 & Supp. 2000); N.H. REV. STAT. ANN. § 304-C:28(V) (1995); N.J. STAT. ANN. § 42:2B-25 (West Supp. 2000); N.C. GEN. STAT. § 57C-3-04(c) (2000); N.D. CENT. CODE § 10-32-51 (2) (Supp. 1997); TENN. CODE ANN. § 48-228-102(a) (1994); TEX. REV. CIV. STAT. ANN. art. 1528n, § 2.22 (Vernon 2001).
104. See ALA. CODE § 10-12-16(b) (1994); ALASKA STAT. § 10.50.870 (1998); CAL. CORP. CODE § 17106(a) (West Supp. 2000); DEL. CODE ANN. tit. 6, § 18-305(a) (1999); 805 ILL. COMP. STAT. ANN. 180/10-15 (Supp. 2000); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); MINN. STAT. ANN. § 322B.373(2)(b) (West 1995 & Supp. 2000) (noncore records); N.H. REV. STAT. ANN. § 304-C:28(I) (1995); N.J. STAT. ANN. § 42:2B-25(a) (West Supp. 2000); N.Y. LTD. LIAB. CO. LAW § 32A-1102(b) (McKinney 1999); N.C. GEN. STAT. § 57C-3-04(a) (2000); OHIO REV. CODE ANN. § 1705.22(A) (1997); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999).
105. See ALA. CODE § 10-12-16(b) (1999); ARK. CODE ANN. § 4-32-405 (Michie 1996); CAL. CORP. CODE § 17106(b) (West Supp. 2000); COLO. REV. STAT. ANN. § 7-80-411 (West 1999); CONN. GEN. STAT. ANN. 34-144(c) (West 1997); DEL. CODE ANN. tit. 6, § 18-305(a) (1999); FLA. STAT. ANN. § 608.4101(3) (West Supp. 2000); GA. CODE ANN. § 14-11-313 (1994); IDAHO CODE § 53-625(2) (Michie 1994); IOWA CODE ANN. § 490A.709(2) (West 1999); KY. REV. STAT. ANN. § 275-185(2) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319(B) (2000); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); MD. CODE ANN., CORPS. & ASS'NS § 4A-406(a) (1999); MASS. ANN. LAWS ch. 156C, § 9(b) (Law. Co-op. 1996); MICH. COMP. LAWS ANN. § 450.4503(2) (West Supp. 2000); MO. ANN. STAT. § 347.091(2) (West Supp. 2000); NEV. REV. STAT. ANN. § 86.241(2) (Michie 1999); N.H. REV. STAT. ANN. § 304-C:28(I) (1995); N.J. STAT. ANN. § 42:2B-25(a) (West Supp. 2000); N.C. GEN. STAT. § 57C-3-04(a) (2000); OHIO REV. CODE ANN. § 1705.22(A) (1997); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999); R.I. GEN. LAWS § 7-16-22(b) (1999); UTAH CODE ANN. § 48-2b-119 (1998); VA. CODE ANN. § 13.1-1028(B) (Michie 1999); WASH. REV. CODE § 25.15.135(2) (West Supp. 2000); WIS. STAT. ANN. § 183.0405(2) (West Supp. 1999).
106. See LA. REV. STAT. ANN. § 12:1319(B) (West 2000); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); N.Y. LTD. LIAB. CO. LAW § 32A-1102(c) (McKinney 1999); N.C. GEN. STAT. § 57C-3-04(a) (2000); OHIO REV. CODE ANN. § 1705.22(A) (1997); VA. CODE ANN. § 13.1-1028(A) (Michie 1999).
107. See DEL. CODE ANN. tit. 6, § 18-305(e) (1999); N.H. REV. STAT. ANN. § 304-C:28(III) (1995); N.Y. LTD. LIAB. CO. LAW § 32A-1102(c) (McKinney 1999); OHIO REV. CODE ANN. § 1705.22(B) (1997).
108. See N.D. CENT. CODE § 10-32-51(5) (Supp. 1997).
109. See ALA. CODE § 10-12-16(b) (1999); ALASKA STAT. § 10.50.870 (1998); ARIZ. REV. STAT. ANN. § 29-607(B) (West Supp. 1996); CONN. GEN. STAT. ANN. 34-144(d) (West 1997); GA. CODE ANN. § 14-11-313 (1994); IDAHO CODE § 53-625(2) (Michie 1994); 805 ILL. COMP. STAT. ANN. 180/10-15 (Supp. 2000); IND. CODE § 23-18-4-8(b) (1998); KY. REV. STAT. ANN. § 275-185(2) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319(A) (West 1992); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999); S.C. CODE ANN. § 33-43-405(B) (West Supp. 1999).
110. See FLA. STAT. ANN. § 608.4101 (West Supp. 2000); NEV. REV. STAT. ANN. § 86.241 (Michie 1999); TENN. CODE ANN. § 48-228-102 (1994); UTAH CODE ANN. § 48-2b-119 (1998); WASH. REV. CODE ANN. § 25.15.135 (West Supp. 2000).
111. Kansas, Nebraska, Pennsylvania, and Wyoming.
112. MICH. COMP. LAWS ANN. § 450.4503(3) (West Supp. 2000).
113. MINN. STAT. ANN. § 322B.373(2) (West 1995 & Supp. 2000).
114. N.D. CENT. CODE § 10-32-51(3) (Supp. 1997).
115. OKLA. STAT. ANN. tit. 18, § 2021(A) (1999).
116. See CAL. CORP. CODE § 17106(c) (West Supp. 2000).
117. See ALASKA STAT. § 10.50.870 (1998); ARIZ. REV. STAT. ANN. § 29-607(B) (West Supp. 1998); ARK. CODE ANN. § 4-32-405 (Michie 1996); DEL. CODE ANN. tit. 6, § 18.-305(a) (1999); GA. CODE ANN. § 14-11-313 (1994); IDAHO CODE § 53-625(3) (Michie 1994); IND. CODE § 23-18-4-8(c) (1998); IOWA CODE ANN. § 490A.709(2) (West 1999); KY. REV. STAT. ANN. § 275-185(3) (Michie Supp. 1998); LA. REV. STAT. ANN. § 12:1319(B) (West 2000); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); MD. CODE ANN., CORPS. & ASS'NS § 4A-406(a) (1999); MASS. ANN. LAWS ch. 156C, § 10 (Law. Co-op. 1996); MICH. COMP. LAWS ANN. § 450.4503(4) (West Supp. 2000); MISS. CODE ANN. § 79-29-308(1) (1996); MO. ANN. STAT. § 347.091(2) (West Supp. 2000); N.H. REV. STAT. ANN. § 304-C:28(I) (1995); N.J. STAT. ANN. § 42:2B-25(a) (West Supp. 2000); N.Y. LTD. LIAB. CO. LAW § 32A-1102(b) (McKinney 1999); N.C. GEN. STAT. § 57C-3-04(a) (2000); OHIO REV. CODE ANN. § 1705.22(A) (1997); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999); R.I. GEN. LAWS § 7-16-22(a) (1999); S.C. CODE ANN. § 33-43-405(C) (West Supp. 1999); TEX. REV. CIV. STAT. ANN. art. 1528n, § 2.22(D) (Vernon 1997); VA. CODE ANN. § 13.1-1028(B) (Michie 1999); Wis. STAT. ANN. § 183.0405(3) (West Supp. 1999).
118. See ARIZ. REV. STAT. ANN. § 29-607(B) (West Supp. 1998).
119. See MISS. CODE ANN. § 79-29-308(1) (1996).
120. See IND. CODE § 23-18-4-8(c) (1998); KY. REV. STAT. ANN. § 275-185(3) (Michie Supp. 1998); S.C. CODE ANN. § 33-43-405(C) (West Supp. 1999); WIS. STAT. ANN. § 183.0405(3) (West Supp. 1999).
121. N.H. REV. STAT. ANN. § 304-C:28(I) (1995).
122. IND. CODE § 23-18-4-8(c) (1998).
123. See GA. CODE ANN. § 14-11-313 (1994); IOWA CODE ANN. § 490A.709(2) (West 1999); MICH. COMP. LAWS ANN. § 450.4503(3) (West Supp. 2000).
124. See MISS. CODE ANN. § 79-29-308(1) (1996); MO. ANN. STAT. § 347.091(2) (West Supp. 2000); OKLA. STAT. ANN. tit. 18, § 2021(B) (1999); S.C. CODE ANN. § 33-43-405(B) (West Supp. 1999); VA. CODE ANN. § 13.1-1028(B) (Michie 1999).
125. MISS. CODE ANN. § 79-29-308(1) (1996).
126. Seven states allow restrictions on access to noncore materials when management feels access might harm the LLC. See DEL. CODE ANN. tit. 6, § 18-305(c) (1999); ME. REV. STAT. ANN. tit. 31, § 655(2) (West 1996); N.H. REV. STAT. ANN. § 304-C:28(III) (1995); N.J. STAT. ANN. § 42:2B-25 (West Supp. 2000); N.Y. LTD. LIAB. CO. LAW § 32A-1102(c) (McKinney 1999); N.C. GEN. STAT. § 57C-3-04(e) (2000); OHIO REV. CODE ANN. § 1705.22(B) (1997).
127. See MINN. STAT. ANN. § 322B.373(3) (West 1995 & Supp. 2000); N.D. CENT. CODE § 10-32-51(4) (Supp. 1997).
128. Bruce H. Kobayashi & Larry E. Ribstein, Evolution and Spontaneous Uniformity: Evidence from the Evolution of the Limited Liability Company, 34 ECON. INQUIRY 464, 468 (1996); Larry E. Ribstein & Bruce H. Kobayashi, Uniform Laws, Model Laws and Limited Liability Companies, 66 U. COLO. L. REV. 947, 951 (1995). In a recent article, Professor Ribstein states: [U]niform laws reduce innovation and experimentation. . . . No set of provisions can meet perfectly all the applicable criteria at any given time, much less for a significant amount of time in a rapidly changing world. . . . By contrast, competition among the states would continue testing and refining state law. The collective wisdom of fifty-one legislatures, spurred by lawyers and business people all motivated to achieve the right result, is far greater than that of NCCUSL. As Hayek observed, "if left free, men will often achieve more than individual human reason could design or foresee." Ribstein, supra note 3, at 964-65 (citations omitted).
129. Bruce H. Kobayashi & Larry E. Ribstein, Evolution and Spontaneous Uniformity: Evidence from the Evolution of the Limited Liability Company, 34 ECON. INQUIRY 464, 468 (1996); Larry E. Ribstein & Bruce H. Kobayashi, Uniform Laws, Model Laws and Limited Liability Companies, 66 U. COLO. L. REV. 947, 951 (1995). In a recent article, Professor Ribstein states: [U]niform laws reduce innovation and experimentation. . . . No set of provisions can meet perfectly all the applicable criteria at any given time, much less for a significant amount of time in a rapidly changing world. . . . By contrast, competition among the states would continue testing and refining state law. The collective wisdom of fifty-one legislatures, spurred by lawyers and business people all motivated to achieve the right result, is far greater than that of NCCUSL. As Hayek observed, "if left free, men will often achieve more than individual human reason could design or foresee." Ribstein, supra note 3, at 964-65 (citations omitted).
130. Bruce H. Kobayashi & Larry E. Ribstein, Evolution and Spontaneous Uniformity: Evidence from the Evolution of the Limited Liability Company, 34 ECON. INQUIRY 464, 468 (1996); Larry E. Ribstein & Bruce H. Kobayashi, Uniform Laws, Model Laws and Limited Liability Companies, 66 U. COLO. L. REV. 947, 951 (1995). In a recent article, Professor Ribstein states: [U]niform laws reduce innovation and experimentation. . . . No set of provisions can meet perfectly all the applicable criteria at any given time, much less for a significant amount of time in a rapidly changing world. . . . By contrast, competition among the states would continue testing and refining state law. The collective wisdom of fifty-one legislatures, spurred by lawyers and business people all motivated to achieve the right result, is far greater than that of NCCUSL. As Hayek observed, "if left free, men will often achieve more than individual human reason could design or foresee." Ribstein, supra note 3, at 964-65 (citations omitted).
131. See Allan W. Vestal, "Assume a Rather Large Boat . . .": The Mess We Have Made of Partnership Law, 54 WASH. & LEE L. REV. 487, 523-24 (1997).
132. Keatinge, supra note 1.
133. Robert Keatinge also recognizes this tension: Many aspects of associations are apparently contradictory, or at best, ambiguous. On one hand, a partnership has been characterized as no more of an entity than a friendship. On the other, an association is at once a contract among its owners and a separate entity with its own legal identity. The owners are at once self-interested and fiduciaries to the other owners and the association. Robert R. Keatinge, The Implications of Fiduciary Relationships in Representing Limited Liability Companies and Other Unincorporated Associations and Their Partners or Members, 25 STETSON L. REV. 389, 389-90 (1995) (citations omitted). This recognition of the tension between autonomy and community reflects conflict about the nature of humanity and society and has long been the focus of political philosophers. For example, the starting point for Thomas Hobbes's system was the concrete individual completely isolated from his social context, and Hobbes asserted that it was completely natural for man to be alone rather than in "sociable communion" with his fellows. See THOMAS HOBBES, LEVIATHAN (E.P. Dutton & Co., Inc. 1950) (1651). Thus, to Hobbes all forms of community were artificial rather than natural in origin, and society was simply the result of a voluntary compact between individuals motivated by a desire for self-preservation. Even this social life is marked by distrust and mutual hostility, and it was anticipated that the sovereign would operate in a limited realm in order to leave each individual the maximum of liberty to pursue his personal goals. Although Jean Jacques Rousseau's starting point was individualist, he emphasized the superiority of social life, through the sovereign general will, over the state of nature. In Rousseau's view, in society man loses his natural liberty, but obtains civil liberty. Man also obtains a right of property, guaranteed by the law, instead of a more precarious possession which is dependent on his own strength. Rousseau stresses the benefit of a social life, and not the need to attempt to preserve in society the values of a state of nature. Rousseau can be viewed as a precursor to a collectivist attitude toward man's place in society rather than as a proponent of individual liberty. JEAN JACQUES ROUSSEAU, THE SOCIAL CONTRACT (George Allen & Unwin Ltd. 1948) (1895); see also J.W. GOUGH, THE SOCIAL CONTRACT 164-74 (1957).
134. Robert Keatinge also recognizes this tension: Many aspects of associations are apparently contradictory, or at best, ambiguous. On one hand, a partnership has been characterized as no more of an entity than a friendship. On the other, an association is at once a contract among its owners and a separate entity with its own legal identity. The owners are at once self- interested and fiduciaries to the other owners and the association. Robert R. Keatinge, The Implications of Fiduciary Relationships in Representing Limited Liability Companies and Other Unincorporated Associations and Their Partners or Members, 25 STETSON L. REV. 389, 389-90 (1995) (citations omitted). This recognition of the tension between autonomy and community reflects conflict about the nature of humanity and society and has long been the focus of political philosophers. For example, the starting point for Thomas Hobbes's system was the concrete individual completely isolated from his social context, and Hobbes asserted that it was completely natural for man to be alone rather than in "sociable communion" with his fellows. See THOMAS HOBBES, LEVIATHAN (E.P. Dutton & Co., Inc. 1950) (1651). Thus, to Hobbes all forms of community were artificial rather than natural in origin, and society was simply the result of a voluntary compact between individuals motivated by a desire for self-preservation. Even this social life is marked by distrust and mutual hostility, and it was anticipated that the sovereign would operate in a limited realm in order to leave each individual the maximum of liberty to pursue his personal goals. Although Jean Jacques Rousseau's starting point was individualist, he emphasized the superiority of social life, through the sovereign general will, over the state of nature. In Rousseau's view, in society man loses his natural liberty, but obtains civil liberty. Man also obtains a right of property, guaranteed by the law, instead of a more precarious possession which is dependent on his own strength. Rousseau stresses the benefit of a social life, and not the need to attempt to preserve in society the values of a state of nature. Rousseau can be viewed as a precursor to a collectivist attitude toward man's place in society rather than as a proponent of individual liberty. JEAN JACQUES ROUSSEAU, THE SOCIAL CONTRACT (George Allen & Unwin Ltd. 1948) (1895); see also J.W. GOUGH, THE SOCIAL CONTRACT 164-74 (1957).
135. Robert Keatinge also recognizes this tension: Many aspects of associations are apparently contradictory, or at best, ambiguous. On one hand, a partnership has been characterized as no more of an entity than a friendship. On the other, an association is at once a contract among its owners and a separate entity with its own legal identity. The owners are at once self- interested and fiduciaries to the other owners and the association. Robert R. Keatinge, The Implications of Fiduciary Relationships in Representing Limited Liability Companies and Other Unincorporated Associations and Their Partners or Members, 25 STETSON L. REV. 389, 389-90 (1995) (citations omitted). This recognition of the tension between autonomy and community reflects conflict about the nature of humanity and society and has long been the focus of political philosophers. For example, the starting point for Thomas Hobbes's system was the concrete individual completely isolated from his social context, and Hobbes asserted that it was completely natural for man to be alone rather than in "sociable communion" with his fellows. See THOMAS HOBBES, LEVIATHAN (E.P. Dutton & Co., Inc. 1950) (1651). Thus, to Hobbes all forms of community were artificial rather than natural in origin, and society was simply the result of a voluntary compact between individuals motivated by a desire for self-preservation. Even this social life is marked by distrust and mutual hostility, and it was anticipated that the sovereign would operate in a limited realm in order to leave each individual the maximum of liberty to pursue his personal goals. Although Jean Jacques Rousseau's starting point was individualist, he emphasized the superiority of social life, through the sovereign general will, over the state of nature. In Rousseau's view, in society man loses his natural liberty, but obtains civil liberty. Man also obtains a right of property, guaranteed by the law, instead of a more precarious possession which is dependent on his own strength. Rousseau stresses the benefit of a social life, and not the need to attempt to preserve in society the values of a state of nature. Rousseau can be viewed as a precursor to a collectivist attitude toward man's place in society rather than as a proponent of individual liberty. JEAN JACQUES ROUSSEAU, THE SOCIAL CONTRACT (George Allen & Unwin Ltd. 1948) (1895); see also J.W. GOUGH, THE SOCIAL CONTRACT 164-74 (1957).
136. Robert Keatinge also recognizes this tension: Many aspects of associations are apparently contradictory, or at best, ambiguous. On one hand, a partnership has been characterized as no more of an entity than a friendship. On the other, an association is at once a contract among its owners and a separate entity with its own legal identity. The owners are at once self- interested and fiduciaries to the other owners and the association. Robert R. Keatinge, The Implications of Fiduciary Relationships in Representing Limited Liability Companies and Other Unincorporated Associations and Their Partners or Members, 25 STETSON L. REV. 389, 389-90 (1995) (citations omitted). This recognition of the tension between autonomy and community reflects conflict about the nature of humanity and society and has long been the focus of political philosophers. For example, the starting point for Thomas Hobbes's system was the concrete individual completely isolated from his social context, and Hobbes asserted that it was completely natural for man to be alone rather than in "sociable communion" with his fellows. See THOMAS HOBBES, LEVIATHAN (E.P. Dutton & Co., Inc. 1950) (1651). Thus, to Hobbes all forms of community were artificial rather than natural in origin, and society was simply the result of a voluntary compact between individuals motivated by a desire for self-preservation. Even this social life is marked by distrust and mutual hostility, and it was anticipated that the sovereign would operate in a limited realm in order to leave each individual the maximum of liberty to pursue his personal goals. Although Jean Jacques Rousseau's starting point was individualist, he emphasized the superiority of social life, through the sovereign general will, over the state of nature. In Rousseau's view, in society man loses his natural liberty, but obtains civil liberty. Man also obtains a right of property, guaranteed by the law, instead of a more precarious possession which is dependent on his own strength. Rousseau stresses the benefit of a social life, and not the need to attempt to preserve in society the values of a state of nature. Rousseau can be viewed as a precursor to a collectivist attitude toward man's place in society rather than as a proponent of individual liberty. JEAN JACQUES ROUSSEAU, THE SOCIAL CONTRACT (George Allen & Unwin Ltd. 1948) (1895); see also J.W. GOUGH, THE SOCIAL CONTRACT 164-74 (1957).
137. REVISED UNIF. P'SHIP ACT § 202 (amended 1997), 6 U.L.A. 27 (Supp. 2000).
138. Id. § 401(b), 6 U.L.A. 52.
139. Id. § 401(f).
140. Id. § 301(1), 6 U.L.A. 33.
141. Id. § 306(a), 6 U.L.A. 45.
142. Id. § 404(a), 6 U.L.A. 58.
143. For discussions of the moral foundations of contract law, stressing ideals of autonomy and reciprocity, see P.S. ATIYAH, THE RISE AND FALL OF FREEDOM OF CONTRACT (1979); CHARLES FRIED, CONTRACT AS PROMISE (1981); MICHAEL J. SANDEL, LIBERALISM AND THE LIMITS OF JUSTICE (1998) (post-Rawlsian discussion of individualism and community).
144. For discussions of the moral foundations of contract law, stressing ideals of autonomy and reciprocity, see P.S. ATIYAH, THE RISE AND FALL OF FREEDOM OF CONTRACT (1979); CHARLES FRIED, CONTRACT AS PROMISE (1981); MICHAEL J. SANDEL, LIBERALISM AND THE LIMITS OF JUSTICE (1998) (post-Rawlsian discussion of individualism and community).
145. For discussions of the moral foundations of contract law, stressing ideals of autonomy and reciprocity, see P.S. ATIYAH, THE RISE AND FALL OF FREEDOM OF CONTRACT (1979); CHARLES FRIED, CONTRACT AS PROMISE (1981); MICHAEL J. SANDEL, LIBERALISM AND THE LIMITS OF JUSTICE (1998) (post-Rawlsian discussion of individualism and community).
146. There has been a lively debate over the nature of partnerships, particularly in connection with the RUPA's fiduciary duty rules. See generally J. Dennis Hynes, Fiduciary Duties and RUPA: An Inquiry into Freedom of Contract, 58 LAW & CONTEMP. PROBS. 29 (1995) (arguing for contract-based formulation with wide latitude for participant-negotiated provisions); Larry E. Ribstein, The Revised Uniform Partnership Act: Not Ready for Prime Time, 49 BUS. LAW. 45 (1993) (providing critical analysis of RUPA restrictions on participant- negotiated provisions); Vestal, supra note 21 (arguing for traditional fiduciary-based conceptualization). For a summary of this debate,
147. There has been a lively debate over the nature of partnerships, particularly in connection with the RUPA's fiduciary duty rules. See generally J. Dennis Hynes, Fiduciary Duties and RUPA: An Inquiry into Freedom of Contract, 58 LAW & CONTEMP. PROBS. 29 (1995) (arguing for contract-based formulation with wide latitude for participant-negotiated provisions); Larry E. Ribstein, The Revised Uniform Partnership Act: Not Ready for Prime Time, 49 BUS. LAW. 45 (1993) (providing critical analysis of RUPA restrictions on participant-negotiated provisions); Vestal, supra note 21 (arguing for traditional fiduciary-based conceptualization). For a summary of this debate,
148. There has been a lively debate over the nature of partnerships, particularly in connection with the RUPA's fiduciary duty rules. See generally J. Dennis Hynes, Fiduciary Duties and RUPA: An Inquiry into Freedom of Contract, 58 LAW & CONTEMP. PROBS. 29 (1995) (arguing for contract-based formulation with wide latitude for participant-negotiated provisions); Larry E. Ribstein, The Revised Uniform Partnership Act: Not Ready for Prime Time, 49 BUS. LAW. 45 (1993) (providing critical analysis of RUPA restrictions on participant- negotiated provisions); Vestal, supra note 21 (arguing for traditional fiduciary-based conceptualization). For a summary of this debate,
149. see generally Callison, supra note 19.
150. This change may track other social trends. See, e.g., FRANCIS FUKUYAMA, THE GREAT DISRUPTION: HUMAN NATURE AND THE RECONSTITUTION OF SOCIAL ORDER (1999); see also Thomas E. Geu, Chaos, Complexity, and Coevolution: The Web of Law, Management Theory, and Law Related Services at the Millennium (pts. 1 & 2), 65 TENN. L. REV. 925 (1998), 66 TENN. L. REV. 137 (1998).
151. This change may track other social trends. See, e.g., FRANCIS FUKUYAMA, THE GREAT DISRUPTION: HUMAN NATURE AND THE RECONSTITUTION OF SOCIAL ORDER (1999); see also Thomas E. Geu, Chaos, Complexity, and Coevolution: The Web of Law, Management Theory, and Law Related Services at the Millennium (pts. 1 & 2), 65 TENN. L. REV. 925 (1998), 66 TENN. L. REV. 137 (1998).
152. The theoretical roots of this approach can be found in the law and economics movement: Following the basic precepts of welfare economics, Law and Economics scholars see atomistic contracting agents engaging in maximizing behavior that generally has no impact on third parties. In so doing, the parties are generally expected to reach socially optimal "contractual" arrangements with one another. Each set of contracting parties has maximized its joint wealth, and hence the aggregate value of all contracts cannot be increased. Michael Klausner, Corporations, Corporate Law, and Networks of "Contracts, 81 VA. L. REV. 757, 758 (1995). Corporate norms presuppose that the shareholder relationship is an autonomous one, and shareholders are not assumed to represent each other as agents. Thus, shareholders generally owe no duties, at least in the absence of a controlling shareholder who exercises control over the corporation.
153. Id. at 767.
154. See Robert W. Hillman, Private Ordering Within Partnerships, 41 U. MIAMI L. REV. 425, 465 (1987).
155. See J. Dennis Hynes, Freedom of Contract, Fiduciary Principles, and Partnerships: The Bargain Principle and the Law of Agency, 54 WASH. & LEE L. REV. 439, 452-53 (1997).
156. See Anthony T. Kronman, Mistake, Disclosure, Information, and the Law of Contracts, 7 J. LEGAL STUD. 1, 9-32 (1978).
157. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
158. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
159. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
160. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
161. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
162. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
163. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
164. See, e.g., KIM L. SCHEPPELE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988); Kronman, supra note 124; Andrew Kull, Unilateral Mistake: The Baseball Card Case, 70 WASH. U. L.Q. 57 (1992); Saul Levmore, Securities and Secrets: Insider Trading and the Law of Contracts, 68 VA. L. REV. 117 (1982); Edward H. Rabin, A Proposed Black-Letter Rule Concerning Mistaken Assumptions in Bargain Transactions, 45 TEX. L. REV. 1273 (1967); Alan Strudler, Moral Complexity in the Law of Nondisclosure, 45 UCLA L. REV. 337 (1997); Christopher T. Wonnell, The Structure of a General Theory of Nondisclosure, 41 CASE W. RES. L. REV. 329 (1991). Professor Deborah DeMott surveyed the scene and concluded that "legal doctrine does not resolve these [disclosure] scenarios in a symmetrical fashion" and that scholarly efforts to isolate a single unifying theme in the disclosure cases or to state a general doctrine that would rationalize their outcomes are doomed to fail. Deborah A. DeMott, Do You Have the Right to Remain Silent?: Duties of Disclosure in Business Transactions, 19 DEL. J. CORP. L. 65, 66-67 (1994).
165. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
166. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
167. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
168. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
169. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
170. Kronman, supra note 124, at 33. Although Kronman has become more critical of the legal-economics model, see Anthony T. Kronman, The Fault in Legal Ethics, 100 DICK. L. REV. 489 (1996), his 1978 article is rooted in economic analysis. The article asserts this analysis not because it believes it to be correct in all accounts, but because it best illustrates the case for nondisclosure among autonomous persons. Id. at 17. Several scholars specifically criticize Kronman's analysis. See, e.g., SCHEPPELE, supra note 125, at 31-35; Demott, supra note 125, at 68-69; Strudler, supra note 125, at 349-63.
171. Kronman, supra note 124, at 13 ("Allocative efficiency is promoted by getting information of changed circumstances to the market as quickly as possible.").
172. Id. at 9 (emphasis added). Kronman actually goes a step further. He states that "[t]he cost of administering a disclosure requirement on a case-by-case basis is likely to be substantial" and recommends a blanket rule for particular classes of cases based on "whether the kind of information involved is (on the whole) more likely to be generated by chance or by deliberate searching." Id. at 17-18.
173. Or, in Kronman's view, A would have no duty to disclose if A's information were of a type that normally is produced by a deliberate search. See id. at 17-18.
174. See, e.g., Peckham v. Johnson, 98 S.W.2d 408 (Tex. Civ. App. 1936) (reliance of partner on copartner to disclose all material facts concerning value of partnership property).
175. However, it probably does describe the position of persons negotiating to become partners under RUPA. See Callison, supra note 19, at 124-33; Vestal, supra note 21, at 556 (both articles criticize RUPA's elimination of preformation fiduciary duties, including the disclosure duty).
176. However, it probably does describe the position of persons negotiating to become partners under RUPA. See Callison, supra note 19, at 124-33; Vestal, supra note 21, at 556 (both articles criticize RUPA's elimination of preformation fiduciary duties, including the disclosure duty).
177. Kronman, supra note 124, at 18 n.49.
178. See infra note 139.
179. UNIF. P'SHIP ACT § 20, 6 U.L.A. 602 (1995).
180. Consider again the situation discussed above in which four individuals form a partnership. At the end of year one, any of the four can dissolve the partnership and receive sixteen dollars, with the other partners each receiving ten dollars. But if none of the partners dissolve, then at year two each partner receives fifteen dollars. The community model, which abandons instantaneous, recalculating individual wealth-maximizing behavior, establishes rules requiring consideration of group gains and thus tends toward the second outcome with the realization of an additional fourteen dollars in aggregate return over the party autonomy model.
181. See, e.g., Vestal, supra note 19, at 1127-33 (arguing that a collective-benefit test should be applied to law-partner expulsions); see also Callison, supra note 19, at 148-53 (collective benefit approach applied to good-faith duty).
182. See, e.g., Vestal, supra note 19, at 1127-33 (arguing that a collective-benefit test should be applied to law-partner expulsions); see also Callison, supra note 19, at 148-53 (collective benefit approach applied to good-faith duty).
183. See, e.g., ATIYAH, supra note 118, at 716-37. Professor Duncan Kennedy contrasts individualism with altruism and proposes that altruism is the appropriate morality for contractual relationships.
184. See Duncan Kennedy, Form and Substance in Private Law Adjudication, 89 HARV. L. REV. 1685, 1733-35 (1976). In this view, altruism is a morality of sharing and individual sacrifice.
185. Id. at 1726.
186. Partner disclosure obligations under the UPA can be divided into two broad categories: routine disclosure obligations and nonroutine disclosure obligations. The routine disclosure requirements are not expressly contained in the UPA, but are implied from UPA section 18(e)'s pronouncement that "[a]ll partners have equal rights in the management and conduct of the partnership business." UNIF. P'SHIP ACT § 18(e), 6 U.L.A. 526. When all partners participate equally in partnership management, it is appropriate to imply a requirement that all partners have equal rights to receive, without demand, that information which is required for them to participate meaningfully in management. The UPA expressly sets forth several nonroutine requirements which operate beyond the implied routine disclosure obligation. These disclosure requirements "are extraordinary because they are not intended to be invoked" in the partnership's ordinary operations, and they are remedial because they seek to "assure access to information when normal patterns of information dissemination have broken down" or are ineffective. Allan W. Vestal, "Ask Me No Questions and I'll Tell You No Lies": Statutory and Common-Law Disclosure Requirements Within High-Tech Joint Ventures, 65 TUL. L. REV. 705, 717 (1991). First, UPA section 20 states that "[p]artners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner or partner under legal disability." UNIF. P'SHIP ACT § 20, 6 U.L.A. 602. Second, UPA section 19 provides that "every partner shall at all times have access to and may inspect and copy any of [the partnership's books]." Id. § 19, 6 U.L.A. 598. The UPA section 19 inspection right is a method for policing the partners' duty of disclosure under UPA section 20 and also is a means by which partners can protect themselves against wrongdoing and make informed decisions concerning partnership operations and management. Finally, partners have information rights pursuant to UPA sections 21, id. § 21(1), 6 U.L.A. 608 ("Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property."), and 22, id. § 22, 6 U.L.A. 650 ("Any partner shall have the right to a formal account as to partnership affairs . . . .").
187. The partnership disclosure cases demonstrate three categories in which the courts have implemented fiduciary duty principles to mandate disclosure: (a) transactions in which parties are negotiating to become partners; (b) self-dealing transactions involving a partner's transfer of property to a partnership or acquisition of property from a partnership; and (c) transactions involving a partner's purchase of a copartner's interest or a partner's sale of an interest to a copartner. Vestal, supra note 138, at 729-35; see also CALUSON,supra note 2, § 12.05. In the first category, persons negotiating to become partners generally have been held to fiduciary standards and have been required to disclose material information. In the second category, involving partner-partnership transactions, the partner's interest in the property and the cost at which the partner obtained the property generally have been held material facts that the partner has a fiduciary duty to disclose. Opus Corp. v. Int'l Bus. Machs. Corp., 141 F.3d 1261, 1269 (8th Cir. 1998) (materiality requirement imposed); Libby v. L.J. Corp., 247 F.2d 78, 82 (D.C. Cir. 1957); Starr v. Int'l Realty, Ltd., 533 P.2d 165, 168-69 (Or. 1975). In the third category, involving partner-partner transactions in which one partner has information that the other partner does not have, the courts generally have imposed a fiduciary-based disclosure obligation. Moser v. Williams, 443 S.W.2d 212, 215 (Mo. Ct. App. 1969) (discussing partner's obligation to disclose contract for sale of partnership asset when purchasing copartner's interest); Johnson v. Buck, 540 S.W.2d 393, 411-13 (Tex. Ct. App. 1976) (discussing managing partner's obligation to disclose when purchasing copartner's partnership interest); Peckham v. Johnson, 98 S.W.2d 408, 412-13 (Tex. Civ. App. 1938) (partner failure to disclose third-party bid for partnership assets).
188. The partnership disclosure cases demonstrate three categories in which the courts have implemented fiduciary duty principles to mandate disclosure: (a) transactions in which parties are negotiating to become partners; (b) self-dealing transactions involving a partner's transfer of property to a partnership or acquisition of property from a partnership; and (c) transactions involving a partner's purchase of a copartner's interest or a partner's sale of an interest to a copartner. Vestal, supra note 138, at 729-35; see also CALUSON,supra note 2, § 12.05. In the first category, persons negotiating to become partners generally have been held to fiduciary standards and have been required to disclose material information. In the second category, involving partner-partnership transactions, the partner's interest in the property and the cost at which the partner obtained the property generally have been held material facts that the partner has a fiduciary duty to disclose. Opus Corp. v. Int'l Bus. Machs. Corp., 141 F.3d 1261, 1269 (8th Cir. 1998) (materiality requirement imposed); Libby v. L.J. Corp., 247 F.2d 78, 82 (D.C. Cir. 1957);
189. The UPA does not contain a definitive statement of partner fiduciary duties. Instead, UPA section 9(1) states that agency-law principles, presumably including fiduciary principles derived from agency law, apply to partnerships. UNIF. P'SHIP ACT § 9(1), 6 U.L.A. 400-01 (stating that "[e] very partner is an agent of the partnership for the purpose of its business"); see also id. § 4(3), 6 U.L.A. 250 (declaring that the "law of agency shall apply under this act"). Fiduciary duties are a standard part of agency law. RESTATEMENT (SECOND) OF AGENCY § 1(1) (1958) ("Agency is the fiduciary relation . . . ."). Further, UPA section 21(1), entitled Partner Accountable as a Fiduciary, requires that a partner account to the partnership for any benefit, and hold as trustee for the partnership any profit, derived without the other partners' consent from transactions connected with the partnership's formation, conduct, or liquidation or from the use of partnership property. UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Beyond this broad requirement that partners account for certain self-dealing transactions, courts have held that a wide variety of fiduciary duties apply to general partners. See, e.g., CALLISON, supra note 2, at ch. 12 (discussing partnership fiduciary issues); Vestal, supra note 136, at 727-35. Generally, courts have held that partners have duties of loyalty, care, fairness, and honesty to the partnership and their copartners. Id. These duties can be separated into (a) a duty of loyalty (including a duty not to usurp partnership opportunities, a duty not to compete with the partnership, and a duty not to act adversely to the partnership); (b) a duty of good faith and fair dealing; (c) a duty to exercise appropriate care in partnership management; and (d) a duty to fully disclose matters that are material to the partnership and its business. Id. In addition, courts have stated that these partnership fiduciary duties, in some form, extend from the period of preformation negotiations through termination of the partnership. See CALLISO, supra note 2, at § 12.11. UPA section 21(1) supports this conclusion by its reference to the "formation, conduct, or liquidation of the partnership." UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Under the UPA, partnership fiduciary duties are broad and somewhat nebulous and, consequently, are subject to judicial expansion and contraction. It should be noted that the courts have generally adopted a communitarian view of partnership fiduciary duties and have prohibited partner transactions that would be acceptable if partners dealt with each other as autonomous contracting parties. This communitarian premise extends to partners' personal use of information provided to them by the partnership or by their copartners. Therefore, even though partners have broad information disclosure obligations under the UPA and partnership common law, disclosing partners also have broad protections against use of disclosed information. The communitarian premise of pre-RUPA partnership law can be said to balance partner obligations and partner responsibilities.
190. The UPA does not contain a definitive statement of partner fiduciary duties. Instead, UPA section 9(1) states that agency-law principles, presumably including fiduciary principles derived from agency law, apply to partnerships. UNIF. P'SHIP ACT § 9(1), 6 U.L.A. 400-01 (stating that "[e] very partner is an agent of the partnership for the purpose of its business"); see also id. § 4(3), 6 U.L.A. 250 (declaring that the "law of agency shall apply under this act"). Fiduciary duties are a standard part of agency law. RESTATEMENT (SECOND) OF AGENCY § 1(1) (1958) ("Agency is the fiduciary relation . . . ."). Further, UPA section 21(1), entitled Partner Accountable as a Fiduciary, requires that a partner account to the partnership for any benefit, and hold as trustee for the partnership any profit, derived without the other partners' consent from transactions connected with the partnership's formation, conduct, or liquidation or from the use of partnership property. UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Beyond this broad requirement that partners account for certain self-dealing transactions, courts have held that a wide variety of fiduciary duties apply to general partners. See, e.g., CALLISON, supra note 2, at ch. 12 (discussing partnership fiduciary issues); Vestal, supra note 136, at 727-35. Generally, courts have held that partners have duties of loyalty, care, fairness, and honesty to the partnership and their copartners. Id. These duties can be separated into (a) a duty of loyalty (including a duty not to usurp partnership opportunities, a duty not to compete with the partnership, and a duty not to act adversely to the partnership); (b) a duty of good faith and fair dealing; (c) a duty to exercise appropriate care in partnership management; and (d) a duty to fully disclose matters that are material to the partnership and its business. Id. In addition, courts have stated that these partnership fiduciary duties, in some form, extend from the period of preformation negotiations through termination of the partnership. See CALLISO, supra note 2, at § 12.11. UPA section 21(1) supports this conclusion by its reference to the "formation, conduct, or liquidation of the partnership." UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Under the UPA, partnership fiduciary duties are broad and somewhat nebulous and, consequently, are subject to judicial expansion and contraction. It should be noted that the courts have generally adopted a communitarian view of partnership fiduciary duties and have prohibited partner transactions that would be acceptable if partners dealt with each other as autonomous contracting parties. This communitarian premise extends to partners' personal use of information provided to them by the partnership or by their copartners. Therefore, even though partners have broad information disclosure obligations under the UPA and partnership common law, disclosing partners also have broad protections against use of disclosed information. The communitarian premise of pre-RUPA partnership law can be said to balance partner obligations and partner responsibilities.
191. The UPA does not contain a definitive statement of partner fiduciary duties. Instead, UPA section 9(1) states that agency-law principles, presumably including fiduciary principles derived from agency law, apply to partnerships. UNIF. P'SHIP ACT § 9(1), 6 U.L.A. 400-01 (stating that "[e] very partner is an agent of the partnership for the purpose of its business"); see also id. § 4(3), 6 U.L.A. 250 (declaring that the "law of agency shall apply under this act"). Fiduciary duties are a standard part of agency law. RESTATEMENT (SECOND) OF AGENCY § 1(1) (1958) ("Agency is the fiduciary relation . . . ."). Further, UPA section 21(1), entitled Partner Accountable as a Fiduciary, requires that a partner account to the partnership for any benefit, and hold as trustee for the partnership any profit, derived without the other partners' consent from transactions connected with the partnership's formation, conduct, or liquidation or from the use of partnership property. UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Beyond this broad requirement that partners account for certain self-dealing transactions, courts have held that a wide variety of fiduciary duties apply to general partners. See, e.g., CALLISON, supra note 2, at ch. 12 (discussing partnership fiduciary issues); Vestal, supra note 136, at 727-35. Generally, courts have held that partners have duties of loyalty, care, fairness, and honesty to the partnership and their copartners. Id. These duties can be separated into (a) a duty of loyalty (including a duty not to usurp partnership opportunities, a duty not to compete with the partnership, and a duty not to act adversely to the partnership); (b) a duty of good faith and fair dealing; (c) a duty to exercise appropriate care in partnership management; and (d) a duty to fully disclose matters that are material to the partnership and its business. Id. In addition, courts have stated that these partnership fiduciary duties, in some form, extend from the period of preformation negotiations through termination of the partnership. See CALLISO, supra note 2, at § 12.11. UPA section 21(1) supports this conclusion by its reference to the "formation, conduct, or liquidation of the partnership." UNIF. P'SHIP ACT § 21(1), 6 U.L.A. 608. Under the UPA, partnership fiduciary duties are broad and somewhat nebulous and, consequently, are subject to judicial expansion and contraction. It should be noted that the courts have generally adopted a communitarian view of partnership fiduciary duties and have prohibited partner transactions that would be acceptable if partners dealt with each other as autonomous contracting parties. This communitarian premise extends to partners' personal use of information provided to them by the partnership or by their copartners. Therefore, even though partners have broad information disclosure obligations under the UPA and partnership common law, disclosing partners also have broad protections against use of disclosed information. The communitarian premise of pre-RUPA partnership law can be said to balance partner obligations and partner responsibilities.
192. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
193. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
194. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
195. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
196. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
197. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
198. The RUPA generally maintains the UPA's communitarian approach to information sharing, at least as a statutory default rule. It also permits partners to contract for autonomy by making the disclosure requirement amendable by the partners' agreement. First, RUPA section 403(c)(1) codifies the routine disclosure obligation implied by UPA section 18(e): "Each partner and the partnership shall furnish to a partner . . . : (1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this [Act] . . . ." REVISED UNIF. P'SHIP ACT § 403(c)(1) (amended 1997), 6 U.L.A. 78 (Supp. 2000); HILLMAN, VESTAL & WEIDNER, supra note 1, at 187-88. Notwithstanding this codification of the routine disclosure requirement, RUPA section 103(a) makes RUPA section 403(c)(1) amendable by the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92. Second, RUPA sections 403(a) and (b) guaranty partner access to partnership books and records. Specifically, RUPA sections 403(a) and (b) provide: (a) A partnership shall keep its books and records, if any, at its chief executive office. (b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished. REVISED UNIF. P'SHIP ACT § 403(a)-(b), 6 U.L.A. 56; HILLMAN, VESTAL & WEIDNER, supra note 1, at 180-87. Third, RUPA section 403(c)(2) contains a demand-driven disclosure mechanism: "Each partner and the partnership shall furnish to a partner: . . . on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c), 6 U.L.A. 78; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. RUPA section 403(c)(2) narrows the UPA's demand-driven disclosure obligations in two ways. Allan W. Vestal, The Disclosure Obligations of Partners Inter Se Under the Revised Uniform Partnership Act of 1994: Is the Contractarian Revolution Failing?, 36 WM. & MARY L. REV. 1559, 1580-81 (1995). First, RUPA section 403(c)(1) uses the formulation "information concerning the partnership's business and affairs" rather than the "all things affecting the partnership" formulation in UPA section 20. Id. It is unclear whether the drafters intended this narrowing. The official commentary states "Paragraph (2) continues the UPA rule that partners are entitled, on demand, to any information concerning the partnership's business and affairs." REVISED UNIF. P'SHIP ACT § 403 cmt., 6 U.L.A. 57; HILLMAN, VESTAL & WEIDNER, supra note 1, at 188-89. Second, RUPA section 403(c)(2) provides an exception to the disclosure requirement where the demand or the information sought "is unreasonable or otherwise improper under the circumstances." REVISED UNIF. P'SHIP ACT § 403(c)(2), 6 U.L.A. 56. The drafters recognized that this "qualification is new to the statutory formulation." Id. § 403 cmt., 6 U.L.A. 57. The official commentary further states that "[t]he burden is on the partnership or partner from whom the information is requested to show that the demand is unreasonable or improper." Id. As with the RUPA section 403(c)(1) non-demand-driven disclosure requirement, the RUPA section 403(c)(2) demand-driven disclosure requirement is amendable by the partnership agreement. See id. § 103(a), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 186-87.
199. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
200. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
201. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
202. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
203. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
204. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure
205. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
206. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
207. Although the RUPA section 403 disclosure rules generally retain the communitarian premise of the original UPA, RUPA section 404's handling of partnership fiduciary duties and obligations, including partner disclosure obligations in situations not governed by RUPA section 403, moves the RUPA much farther down the path of treating partners as autonomous contracting parties rather than as members of a reciprocal business community. Vestal, supra note 141. RUPA section 404(a) contains the following exclusive statement of partnership fiduciary duties: "The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care." REVISED UNIF. P'SHIP ACT § 404(a), 6 U.L.A. 58. Section 104(a) provides that "[u]nless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]." Id. § 104(a), 6 U.L.A. 20. The RUPA thereby attempts to displace common-law rules that coexisted with the UPA, including common-law fiduciary duty rules. HILLMAN, VESTAL & WEIDNER, supra note 1, at 200-01. Section 404(b) reduces the partners' duty of loyalty to three components. See REVISED UNIF. P'SHIP ACT § 404(b), 6 U.L.A. 58. First, following the self-dealing proscription contained in UPA section 21(1), RUPA section 404(b)(1) states that a partner must "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" (but not during the period prior to the partnership's formation) "or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity." Id. § 404(b)(1), 6 U.L.A. 58. Second, RUPA section 404(b)(2) states that a partner must refrain from dealing adversely "with the partnership in the conduct or winding up of the partnership business" (but, again, not during the period prior to the partnership's formation). Id. § 404(b)(2), 6 U.L.A. 58. Third, section 404(b)(3) states that a partner must "refrain from competing with the partnership in the conduct of the partnership business before [dissolution]." Id. § 404(b)(3), 6 U.L.A. 58. In addition to the duty of loyalty and the duty of care, section 404(d) sets forth an "obligation" of good faith and fair dealing: "A partner shall discharge the duties to the partnership and the other partners under this [Act] or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing." Id. § 404(d), 6 U.L.A. 58. The RUPA drafters believed that the good-faith and fair-dealing obligation arises from the partners' contractual relationship; therefore, the RUPA does not treat it as an independent fiduciary duty. Id. § 404(d) cmt., 6 U.L.A. 60-61. In addition, the drafters expressly declined to flesh out the meanings of the terms "good faith" and "fair dealing" but instead opted to "allow courts to develop their meaning based on the experience of real cases." Id. § 404(d) cmt., 6 U.L.A. 59-60; HILLMAN, VESTAL & WEIDNER, supra note 1, at 203-04. Further, RUPA section 404(e) adds an element of partner autonomy to the fiduciary duty and obligation formulation: "A partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." REVISED UNIF. P'SHIP ACT § 404(e), 6 U.L.A. 58; HILLMAN, VESTAL & WEIDNER, supra note 1, at 204-05. A comment to section 404(e) states that a partner is not a trustee and is not held to the same standards of selflessness as a trustee. REVISED UNIF. P'SHIP ACT § 404(e) cmt., 6 U.L.A. 61. Instead, the RUPA conceives that a partner's interests as a principal and owner must be balanced against its duties and obligations as an agent and fiduciary. The RUPA also recognizes that these roles sometimes conflict. Specifically, RUPA section 404(f) elaborates on the concept of self-interest and permits partners to lend money to and transact business with the partnership and, in so doing, to have the same rights and obligations as nonpartners. Id. § 404(f), 6 U.L.A. 59; HILLMAN, VESTAL & WEIDNER, supra note 1, at 206-07. Finally, the RUPA continues the movement toward partner autonomy by permitting partners to modify their fiduciary duties and obligations. RUPA section 103(b)(3) affords partners broad, but not unlimited, rights to modify their fiduciary duties and obligations through the partnership agreement. REVISED UNIF. P'SHIP ACT § 103(b)(3), 6 U.L.A. 16; HILLMAN, VESTAL & WEIDNER, supra note 1, at 40-48.
208. The RUPA provides reduced protection to partners who disclose information to their copartners. As discussed above, prior to the RUPA the courts generally adopted a communitarian view of partnership fiduciary duties and prohibited partner transactions that might be otherwise acceptable if partners dealt with each other as autonomous contracting parties. See supra notes 140-41. Therefore, because partners have broad information disclosure obligations under pre-RUPA partnership law, disclosing partners also should have broad protection against their copartners' use of disclosed information. The RUPA, on the other hand, narrows the partner fiduciary duty of loyalty to three discrete situations. First, partners must account for property, profit, or benefit derived from conducting partnership business or from using partnership property. Second, partners must refrain from dealing with the partnership as or on behalf of a party having an interest adverse to the partnership. And third, partners must refrain from competing with the partnership. These fiduciary duties arguably do not apply to situations in which partners derive benefit from businesses other than partnership business, use partner rather than partnership property, act in a manner adverse to partners, or compete with partners. Thus, under a viable reading of RUPA section 404, partners may not be able to claim a fiduciary duty breach against copartners who use valuable information disclosed to them. Although the RUPA provides that partners also must discharge their duties and exercise their rights in a manner consistent with the contract-based obligation of good faith and fair dealing, this obligation is undefined and is not as robust as a fiduciary duty. Further, RUPA section 404(e) waters down the good-faith requirements by stating that a partner does not violate this obligation merely because the partner's conduct furthers its own interests. The point here is not that a court can not find a breach when a partner uses information disclosed to it by a copartner. Instead, it should be noted that the answers under the RUPA are less certain and therefore the RUPA may engender less partner trust and confidence.
209. Although the underlying communitarian nature of the UPA may make sense in certain business transactions in which partners contemplate surrendering autonomy, it creates numerous problems for partners who intend to retain autonomy in spheres outside the partnership. To the extent that partnership law does not adjust to ameliorate these problems, and thereby increases the potential cost of the partnership form, it becomes less likely that persons will choose to enter into partnerships. These problems are heightened for partnerships that develop valuable information in the course of their business or that use valuable partner information in connection with their business. See Vestal, supra note 138, at 746-57. First, under the implied routine disclosure requirement of UPA section 18(e), partners have a right to all information concerning those aspects of the partnership business with respect to which they participate in management decisions. UNIF. P'SHIP ACT § 18(e), 6 U.L.A. 526 (1995). Therefore, even if the partnership or other partners have produced valuable information through deliberate effort, individual partners have the right to receive, without demand, some or all of this information. To the extent that partners agree that such information disclosure is objectionable, they could reduce information flow ex ante by restricting partner-management-participation rights. Further, the partners might attempt to limit partners' information rights through specific ex ante disclosure limitations in the partnership agreement, while retaining a more robust partner-management-participation role under section 18(e). However, the enforceability of such a provision is uncertain and, furthermore, such limitations might be undesirable since they could cause uninformed partners to participate in management decisions. A second disclosure problem arises under UPA section 19, which provides that "[t]he partnership books shall be kept, subject to any agreement between the partners, at the principal place of business of the partnership, and every partner shall at all times have access to and may inspect and copy any of them." UNIF. P'SHIP ACT § 19, 6 U.L.A. 598. The UPA does not expressly permit modification of such access rights. Although courts might respect partnership agreement provisions which limit access rights, particularly when necessary to protect trade secrets and other confidential information, there is little case law on this issue. Assuming that partners cannot or do not modify the section 19 disclosure obligation, the scope of the problem depends on the definition of partnership "books." Again, few partnership cases define "books," and there is a risk that courts will give broad construction to a definition. Even under a restrictive reading of UPA section 19 - for example, requiring a nexus to financial audit or tax preparation - a wide range of partnership records could be included as partnership "books." Furthermore, a court could shift its focus from defining "books" to considering what records are in fact kept by the partnership, and fashion a rule that gives partners access to all existing partnership books and records. A broad judicial construction of UPA section 19 would create a significant risk that partnerships will be required to disclose valuable information to individual partners Finally, a significant disclosure problem is caused by the UPA section 20 requirement that "[p]artners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner or partner under legal disability." UNIF. P'SHIP ACT § 20, 6 U.L.A. 602. This broad command can be a problem in many partnerships. For example, if a coalition of U.S. research hospitals were to establish a partnership to market their medical services to foreign health insurance companies, information concerning the capacity, growth, and pricing of the partner-hospitals would be important to the partnership's business and, presumably, this information could be a "thing[] affecting the partnership." Id. If so, under UPA section 20, each partner would be obligated to disclose this information on demand. However, each partner would probably agree that disclosure of its information to a competitor-partner would be undesirable. Although it can be argued that the UPA section 20's reciprocal nature prevents partners from demanding access to proprietary information due to a tit-for-tat concern that their copartners would also demand their proprietary information, such an assumption should be presumed to work only when the partners' information and secrecy needs are symmetrical. If one partner stands to gain more from the secrets of its copartner than it stands to lose from disclosure to its copartner, UPA section 20 could work to the detriment of the partner with the more valuable information.
210. The extent to which partners can modify their disclosure rights and obligations is uncertain under the UPA. The RUPA makes the disclosure requirements broadly amendable by contract. REVISED UNIF. P'SHIP ACT § 103, 6 U.L.A. 42-43; HILLMAN, VESTAL & WEIDNER, supra note 1, at 191-92.
211. This convergence theory arguably could apply to the extent ownership and personal liability overlap but, in light of modern trends toward limited liability protection for all enterprise members, this overlap is less likely. See Callison, supra note 19, at 163.
212. Id.; Deborah A. DeMott, Agency and the Unincorporated Firm: Reflections on Design on the Same Plane of Interest, 54 WASH. & LEE L. REV. 595 (1997) (discussing the importance of differentiation between ownership and agency); see also Claire Moore Dickerson, Equilibrium Destabilized: Fiduciary Duties Under the Uniform Limited Liability Company Act, 25 STETSON L. REV. 415, 417, 442-43 (1995).
213. Id.; Deborah A. DeMott, Agency and the Unincorporated Firm: Reflections on Design on the Same Plane of Interest, 54 WASH. & LEE L. REV. 595 (1997) (discussing the importance of differentiation between ownership and agency); see also Claire Moore Dickerson, Equilibrium Destabilized: Fiduciary Duties Under the Uniform Limited Liability Company Act, 25 STETSON L. REV. 415, 417, 442-43 (1995).
214. See supra text accompanying note 10.
215. See supra text accompanying note 11.
216. See supra text accompanying note 12.
217. The status-based risk attributes of all participants in both species of LLCs are comparable to limited partners in a limited partnership or shareholders in a corporation.
218. REVISED UNIF. LTD. P'SHIP ACT § 1105 (amended 1985), 6A U.L.A. 302 (1995).
219. Id. § 305(1), 6A U.L.A. 167 ("Each limited partner has the right to . . . inspect and copy any of the partnership records required to be maintained by Section 105 . . . ."). RULPA section 105 requires the limited partnership to maintain a specific list of not very helpful documents: (a) Each limited partnership shall keep at the office referred to in Section 104(1) the following: (1) a current list of the full name and last known business address of each partner, separately identifying the general partners (in alphabetical order) and the limited partners (in alphabetical order); (2) a copy of the certificate of limited partnership and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed; (3) copies of the limited partnership's federal, state and local income tax returns and reports, if any, for the three most recent years; (4) copies of any then effective written partnership agreements and of any financial statements of the limited partnership for the three most recent years; and (5) unless contained in a written partnership agreement, a writing setting out: (i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each partner and which each partner has agreed to contribute; (ii) the times at which or events on the happening of which any additional contributions agreed to be made by each partner are to be made; (iii) any right of a partner to receive, or of a general partner to make, distributions to a partner which include a return of all or any part of the partner's contribution; and (iv) any events upon the happening of which the limited partnership is to be dissolved and its affairs wound up. Id. § 105(a), 6A U.L.A. 88.
220. Id. § 305(2), 6A U.L.A. 167.
221. Compare id. §§ 105(a), 305(1), 6A U.L.A. 88, 167 (access only to "partnership records required to be maintained by section 105"), with REVISED UNIF. P'SHIP ACT § 403(b) (amended 1997), 6 U.L.A. 78 (Supp. 2000) (access to "books and records" without limitation).
222. Compare REVISED UNIF. LTD. P'SHIP ACT § 305(2), 6A U.L.A. 167 ("upon reasonable demand . . . true and full information"), with REVISED UNIF. P'SHIP ACT § 403(c)(1), 6 U.L.A. 56 (specification of information required to be furnished "without demand").
223. Compare REVISED UNIF. LTD. P'SHIP ACT art. 3, 6A U.L.A. 137-69 (no fiduciary duties in article 3 limited partners), with id. art. 4, 6A U.L.A. 170-202 (fiduciary duties for general partners through section 403). The courts have in some cases imposed limited fiduciary duties on limited partners. See CALLISON, supra note 2, § 21.16 (discussing limited partner fiduciary duties).
224. REVISED UNIF. LTD. P'SHIP ACT (Proposed Revision Draft Mar. 2000), http://www.law.upenn.edu/bll/ulc/ulc_frame.htm.
225. The prefatory note to Re-RULPA states: Re-RULPA is a "stand alone" act, "de-linked" from the general partnership act. To be able to stand alone, Re-RULPA incorporates many provisions from RUPA and some from ULLCA. . . . . . . Re-RULPA therefore targets two types of enterprises that seem largely beyond the scope of LLPs and LLCs: (i) sophisticated, manager-entrenched commercial deals whose participants commit for the long term, and (ii) estate planning arrangements (family limited partnerships). Re-RULPA accordingly assumes that, more often than not, people utilizing the act will want: • strong centralized management, strongly entrenched, and • passive investors with little right to exit the entity. Re-RULPA' s rules, and particularly its default rules, have been designed to reflect these assumptions. Id. at prefatory note.
226. "Required records" are given narrow definition in Re-RULPA section 111(a), and consist of core documents such as a list of the partners' names and addresses, a copy of partnership's organizational documents, copies of tax returns and financial statements, and copies of any record of partner consents and votes. Id. § 111(a). Re-RULPA can therefore be contrasted with the RUPA and the ULLCA, neither of which mandate that the entity keep specified records.
227. Id. § 407(a)(2).
228. Id. § 407(b)(1).
229. Id. § 407(b)(2). The burden of proving that the information requested is unreasonable or improper likely rests with the limited partnership or the general partner from whom information is requested.
230. Id. § 408.
231. Id. § 305(a).
232. UNIF. LTD. LIAB. CO. ACT § 408(a), 6A U.L.A. 462-63 (1995).
233. REVISED UNIF. LTD. P'SHIP ACT § 305(b) (Proposed Revision Draft Mar. 2000).
234. Id.
235. Id. § 305(g). In the event of a dispute, "the limited partnership has the burden of proving reasonableness." Id.
236. Id. § 110(b)(3).
237. Id. § 305(c) cmt.
238. Id. § 306(a).
239. Id. § 306(b) (two versions).
240. Id. § 306(c). Re-RULPA section 306(c) also states that "the [good-faith and fair-dealing] obligation stated in this subsection displaces any obligation of good faith and fair dealing at common law or otherwise." Id. The drafters' comments indicate the drafters' intent that the obligation should be used only to protect agreed-upon arrangements from conduct that is manifestly beyond what a reasonable person could have contemplated when the contractual arrangements were made. Id. § 306(c) cmt. Thus, section 306(c) appears to contemplate limiting the good-faith obligation beyond the RUPA version of the same language, and may limit good faith to something approaching the UCC "honesty in fact" standard. Compare id. § 306(c), with U.C.C. §§ 1-201(19), 2-103(b) (2000). This further deviation from an already limited RUPA standard should be reconsidered.
241. Such critiques are possible and will be made. See, e.g., Ribstein, supra note 3, at 981-86.