Business Law – Business Form – Partnerships , LP , LLP , LLLP – Flashcards
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Partnership
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A business in which two or more persons combine their assets and skills. Not a legal entity. No additional taxation. 1. Share of profits and losses 2. Join ownership 3. Equal management rights
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Articles of Partnership
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Legal documents that set forth the basic agreement between partners
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Information return
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A tax return submitted by a partnership that only reports the income earned by the business. The partnership as an entity does not pay taxes on the income received by the partnership. A partner's profit from the partnership (whether distributed or not) is taxed as individual income to the individual partner.
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Partnership for a term
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A partnership created for a fixed duration
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Partnership at will
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A partnership with no fixed duration. Any of the partners may leave at any time, for any reason
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Partnership by estoppel
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A judicially created partnership that may, at the court's discretion, be imposed for purposes of fairness. The court can prevent those who present themselves as partners (but who are not) from escaping liability if a third person relies on an alleged partnership in good faith and is harmed as a result.
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Confession of judgment
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The act of a debtor in permitting a judgment to be entered against him or her by a creditor, for an agreed sum, without the institution of legal proceedings.
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Charging order
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In partnership law, an order granted by a court to a judgment creditor that entitles the creditor to attach profits or assets of a partner on dissolution of the partnership.
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Joint liability
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In the event of a lawsuit, all the partners must be sued together
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Joint and several liability
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Allows victim to collect total damages from one or from all joint tortfeasors
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Dissociation of a Partnership
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1. Events of dissociation: notice of desire to withdraw; partner's expulsion, death, or BK; agreed upon event; or appt of receiver for partnership
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Dissociation
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A destruction of a business form (partnership)
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Buyout price
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The amount payable to a partner on his or her dissociation from a partnership, based on the amount distributable to that partner if the firm were wound up on that date, and offset by any damages for wrongful dissociation.
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Wrongful dissociation
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In partnership for definite term or undertaking, dissociation before completion of the term is wrongful and gives rise to damages owed other partners A partner's dissociation may expose the dissociating partner to liability to the partnership and individual partners damaged by her dissociation
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Dissolution
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1. The closing down or dismissal of an assembly, partnership, or official body
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Winding up
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The second of two stages in the termination of a partnership or corporation. Once the firm is dissolved, it continues to exist legally until the process of winding up all business affairs (collecting and distributing the firm's assets) is complete.
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Buy-sell agreement
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A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
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Limited Liability Partnership
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All partners are limited partners and not responsible for the debts and other liabilities of other partners
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Family limited liability partnership
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a type of limited liability partnership owned by family members or fiduciaries of family members
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Limited partnership
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Organization made up of a GENERAL PARTNER, who manages a project, and limited partners, who invest money but have limited liability, are not involved in day-to-day management, and usually cannot lose more than their capital contribution.
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Certificate of limited partnership
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A document that two or more persons must execute and sign that makes a limited partnership legal and binding
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Limited Liability Limited Partnership
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A type of limited partnership permissible in some states in which the general partners have less than full liability for the actions of other general partners.
