The partnership form requires duties among partners that include loyalty and good faith to the partnership.

• A. True
• B. False
• C. Not applicable
• D. Partially true

Answer: (A)

Partnerships operate on fiduciary duties, so partners must act with loyalty and good faith toward the partnership and each other. This means putting the partnership’s interests first, avoiding conflicts of interest, disclosing material information, not exploiting partnership opportunities for personal gain, and acting honestly in all dealings. These obligations are fundamental to the relationship and are typically present whether or not they’re detailed in a written agreement; the agreement can tailor terms but cannot remove the core duties. That’s why this statement is true.