Chapter 12 Flashcards
Partnership
Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership Contract or Articles of Partnership
Agreement among partners that sets terms under which the affairs of the partnership are conducted.
Mutual Agency
Legal relationship among partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the scope of the partnerships business.
Unlimited Liability
Legal relationship among general partners that makes each of them responsible for partnership debts if the other partners are unable to pay their shares.
Limited Partnership
Partnership that has two classes of partners, limited partners and general partners.
General Partners
Partner who assumes unlimited liability for the debts of the partnership; responsible for partner management.
Limited Partners
Partners who have no personal liability for partnership debts beyond the amounts they invested in the partnership
Limited Liability Partnership
Partnership in which a partner is no personally liable for malpractice or negligence unless that partner is responsible for providing the service that resulted in the claim.
S Corporation
Corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes.
C Corporation
Corporation that does not qualify nor elect to be treated as a proprietorship or partnership for income tax purposes and therefore is subject to income taxes.
Limited Liability Company
Organization form that combines select features of a corporation and a limited partnership; provides limited liability to it’s members (owners), is free of business tax, and allows members to actively participate in management.
Statement of Partner’s Equity
Financial Statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners withdrawals, and the partners ending capital balances.
