[Software Dispute] Cole, Kyra, and Morton Are Partners in a Startup

question 51

Multiple Choice

[Software Dispute] Cole, Kyra, and Morton are partners in a startup company that designs software for the biotechnology industry. Their partnership agreement contained a provision that the partnership would be dissolved when Morton retires, or if any partner commits any act that violates the trust of the other partners. The partnership agreement also provided that all intellectual property related to the business of the partnership, including any patents, be owned by the partnership. Cole decides to open another company, ColeCompany, that would design gaming software. He sets up the company secretively, transfers a patent owned by the partnership to ColeCompany, and does not tell his partners until he is ready to do business at ColeCompany. When Kyra and Morton find out that Cole went behind their backs and opened another business, they tell Cole they can no longer trust him and are dissolving the partnership because of his actions. Cole, who is the software designer for the partnership, tells them if they want to dissolve the partnership, then he will also design software for the biotech industry at ColeCompany.
-Can Cole design software for the biotech industry at ColeCompany while the partnership is winding-up?

• A) No, during the winding-up phase, a partner cannot engage in a business that competes with the partnership.
• B) No, a partner may never engage in a business that competes with the partnership.
• C) Yes, during the winding-up phase, a partner can engage in a business that competes with the partnership as long as he discloses all the information about the partnership assets.
• D) Yes, during the winding-up phase, a partner can engage in a business that competes with the partnership.
• E) Yes, during the winding-up phase, a partner can engage in a business that competes with the partnership as long as he still fulfills his fiduciary duty to the partnership and discloses all the information about the partnership assets.

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Definitions:

Product-Line Pricing

Setting prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item.

Discount Pricing

A marketing strategy where products or services are offered at a reduced price to stimulate demand or attract customers.

Bundle Pricing

A pricing strategy where multiple products or services are packaged together and sold at a single price.

BOGOs

An acronym for "Buy One, Get One" sales promotions, where a customer gets a second item for free or at a reduced price after purchasing one at regular price.