DIY Legal Forms

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Transactions Between Partners & Partnership

1. Authorization. Any entity in which any of the General Partners owns an interest may contract and otherwise deal with the partnership (Partnership) provided:

a. The ownership interest of such General Partner (interested General Partner) is disclosed to the other General Partners (Disinterested General Partners);

b. Disinterested General Partners provide prior written consent for the transaction in question; and

[Optional Clause]

c. The payments to be made to, and terms of the transaction with, such entity are not more disadvantageous to Partnership as would exist if it were dealing with an independent third party.

2. Failure to Comply. Failure to comply with the conditions stipulated in Paragraph 1 will obligate Interested General Partner, at the option of Disinterested General Partners, to remit to Partnership all profits that the entity in question derived from the transaction with Partnership.