35: Limited Partnerships and Special Partnerships Flashcards
limited partnership (LP)
a type of partnership that has two types of partners: (1) general partners and (2) limited partners
general partner / ordinary partner / partner
partners of general and limited partnerships who invest capital, manage the business, and are personally liable for the partnership’s debts
limited partner
a partner in a limited partnership who invests capital but does not participate in management and is not personally liable for partnership debts beyond his or her capital contributions
uniform limited partnership act (ULPA)
a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of limited partnerships
revised uniform limited partnership act (RULPA)
a revision of the ULPA that provides a modern, comprehensive law for the formation, operation, and dissolution of limited partnerships
certificate of limited partnership
a document that two or more persons must sign and file w/ the secretary of state of the state organization to form a limited partnership
limited partnership agreement / articles of limited partnership
a document that sets forth the rights and duties of general and limited partners
certificate of authority
a formal document that must be issued by the secretary of state before a foreign corporation, foreign limited liability company (LLC), foreign limited partnership, foreign limited liability partnership (LLP), or foreign limited liability limited partnership (LLLP) may conduct business in that state
flow-through taxation
a tax rule that provides that the income and losses of a sole proprietorship, limited partnership, limited liability company or partnership, LLLP, and S corporation are reported on the owner’s personal income tax return
information return
a document that is filed by general and limited partnerships w/ the government disclosing how much income was earned or the amount of losses incurred by the partnership
liability of a limited partnership
a rule that states that a limited partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a general partner acting in the ordinary course of activities of the limited partnership or with authority of the partnership
unlimited personal liability
a situation in which a person is personally liable for the debts and obligations of certain business entities, such as sole proprietors of sole proprietorships, and general partners of general and limited partnerships
joint and several liability
a form of liability of general partners whereby a plaintiff may sue all of the partners (jointly) or some or one of the partners (individually) to recover payment of a judgment against a partnership that has not been satisfied in whole or in part from partnership assets
limited liability of limited partners
the liability of limited partners of a limited partnership is limited to their capital contributions to the limited partnership
master limited partnership (MLP) / publicly traded partnership (PTP)
a limited partnership that is listed on a stock exchange and has units that are publicly traded
unit / limited partnership unit
an ownership interest in a master limited partnership that is traded on an organized securities exchange
unitholder
a limited partner who owns an ownership unit of a master limited partnership
right to participate in management
a situation in which, unless otherwise agreed, each general partner of a general or limited partnership, each partner of a limited liability partnership, and each nonmanager member of a limited liability company has a right to participate in the management of the business and has an equal vote on entity matters
duty of loyalty
a duty that a partner owes to not act adversely to the interests of the limited liability partnership
duty to account / duty of accountability
a duty owed to account to the partnership of any property, profit, benefit derived from the use of partnership property, including the appropriation of partnership property
duty of limited care
a fiduciary duty imposed on general partners of a general partnership and limited partnership whereby a general partner owes a duty not to engage in the following conduct that would injure the partnership or other partners: (1) a known violation of law, (2) intentional conduct, (3) reckless conduct, or (4) grossly negligent conduct. a partner who commits an ordinarily negligent act is not liable to the partnership or other partners
family limited partnership (FLP)
a limited partnership that is formed to own family business or investments
dissociation
the change in the relation of partners caused by any general partner ceasing to be associated in the carrying on of partnership business that does not cause dissolution of a general or limited partnership
dissolution
the process of ending a limited liability company’s existence or a corporation’s existence
continuation agreement
an agreement among the surviving or remaining general or limited partners to continue a business after the disassociation of a partner or member or the dissolution of the partnership or company
wrongful dissociation
a situation in which a general partner dissociates from a general or limited partnership, LLP, LLC without having the right to do so at the time
winding up
the process of liquidating the assets of corporations, general and limited partnerships, LLCs, LLPs, special partnerships or other business, and distributing the proceeds to satisfy claims against the business
limited liability limited partnership (LLLP)
a special type of limited partnership that has both general partners and limited partners where both the general and limited partners have limited liability and are not personally liable for the debts of the LLLP
