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Keywords

fiduciary duty, limited partnership, limited liability company, delaware

Abstract

In corporations, like most other business associations, fiduciary duties exist to deter management from abusing their power over the owners’ property. In Delaware limited partnerships and limited liability companies, this protection can be waived in the operating agreement. This Note explores the effects of retaining or waiving fiduciary duties and how this plays out in the interpretation of operating agreements. It argues that default fiduciary duties exist for limited liability companies and limited partnerships, including those that are member managed, and it proposes a combination of disclosure and signature requirements from each limited partner or member in order for waiver of fiduciary duties to be effective.

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