The Duty of Finest Loyalty and Reasonable Decisions: the Business Judgment Rule in Unincorporated Business Organizations?
Elizabeth S. Miller and Thomas E. Rutledge
The business judgment rule, a cornerstone of the jurisprudence of the duty of care in the corporate context, holds a less defined role in the contractually driven realm of unincorporated business organizations such as the partnership, limited partnership, and limited liability company. This uncertainty has in recent years been exacerbated by rapid developments in statutory schemes. This article examines (1) the business judgment rule as applied in the corporate context, (2) the recent developments in the laws of unincorporated business organizations, and (3) the interplay of the business judgment rule and the often contractually defined (but at default fiduciary) models of the various unincorporated business organizations.