Chapter 12 Flashcards
Partner who assumes unlimited liability for the debts of the partnership; responsible for partnership management.
General partner
Partnership in which all partners have mutual agency and unlimited liability for partnership debts.
General partnership
Partnership in which a partner is not personally liable for malpractice or negligence unless that partner is responsible for providing the service that resulted in the claim.
Limited liability partnership (LLP)
Partners who have no personal liability for partnership debts beyond the amounts they invested in the partnership.
Limited partners
Partnership that has two classes of partners, limited partners and general partners.
Limited partnership
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 partnership’s business.
Mutual agency
Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Partnership
Agreement among partners that sets terms under which the affairs of the partnership are conducted; also called articles of partnership.
Partnership contract
Dissolution of a partnership by (1) selling noncash assets and allocating any gain or loss according to partners’ income-and-loss ratio, (2) paying liabilities, and (3) distributing any remaining cash according to partners’ capital balances.
Partnership liquidation
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; also called statement of partners’ capital.
Statement of partners’ equity
Legal relationship among general partners that makes each of them responsible for partnership debts if the other partners are unable to pay their shares.
Unlimited liability
