What can a partnership agreement specify regarding the management of the partnership?

The correct answer is that a partnership agreement can specify a different arrangement than default state rules. This is significant because partnerships are largely governed by state partnership laws, but these default regulations can be expressly modified through the partnership agreement.

For instance, while default rules might grant equal management rights to all partners, a partnership agreement can specifically allocate different powers and responsibilities among partners, allowing for a tailored management structure that suits the needs of the partners involved. This flexibility is essential for partners to define how they wish to operate the business, addressing issues such as profit sharing, decision-making authority, and roles within the partnership.

The other options do not capture the full extent of what a partnership agreement can control. While it is true that a partnership might provide for equal rights or specify management duties, those elements may still be subject to default state law in some cases. Exemptions from liability cannot typically be specified in a partnership agreement due to the inherent nature of partnership liabilities and the need to protect third-party interests. This reinforces the importance of having the ability to create specific terms in the partnership agreement that may deviate from general legal provisions.