Chapter 15 Flashcards
Uniform Limited Liability Company Act (ULLCA)
A model act that provides comprehensive and uniform laws for the formation operation, and dissolution of LLCs.
Limited Liability Company (LLC)
An unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships, and corporations.
Articles of Organization
The formal documents that must be filed at the secretary of state’s office of the state of organization of an LLC to form the LLC.
Operating Agreement
An agreement entered into by members that governs the affairs and business of an LLC and the relations among members, managers, and the LLC.
Certificate of Interest
A document that evidences a member’s ownership interest in an LLC.
Member
An owner of an LLC.
Limited Liability of Members of an LLC
The liability of LLC members for the LLC’s debts, obligations, and liabilities only to the extent of their capital contributions.
Tortfeasor
A person who intentionally or unintentionally (negligently) causes injury or death to another person.
Member-managed LLC
An LLC that has not designated in its articles of organization that it is a manager-managed LLC and that is managed by its member.
Manager-managed LLC
An LLC that has designated in its articles of organization that it is a manager-managed LLC and whose nonmanger members give their management rights over to designated managers.
Member-managed LLC Authority to Bind
All members have agency authority to bind the LLC to contracts.
Manager-managed LLC Authority to Bind
The managers have authority to bind the LLC to contracts; the nonmanger members cannot bind the LLC to contracts.
Duty to Loyalty
A duty owed by a member of a member-managed LLC and a manger of a manager-managed LLC to be honest in his or her dealings with the LLC and to not act adversely to the interest of the LLC.
Wrongful Disassociation
Dissolution that occurs when a member withdraws from (1) a term LLC prior to the expiration of the term or (2) an at-will LLC when the operating agreement eliminates a member’s power to withdraw.
Limited Liability Partnership (LLP)
A special form of partnership in which all partners are limited partners, and there are no general partners.
Articles of Partnership
The formal documents that must be filed at the secretary of state’s office of the state of organization of an LLP in order to form the LLP.
Franchise
An arrangement that is established when one party (the franchisor) licenses another party (the franchisee) to use the franchisor’s trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services.
Distributorship Franchise
The franchisor manufactures a product and licenses a retail dealer to distribute the product to the public.
Processing Plant Franchise
The franchisor provides a secret formula or the like to the franchisee. The franchisee then manufactures the product at its own location and distributes it to retail dealers.
Chain-Style Franchise
The franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory. The product is made or the service is provided by the franchisee.
Area Franchise
The franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. This area franchisee is called subfranchisor.
Franchise Agreement
An agreement that a franchisor and franchisee enter into that sets forth the terms and conditions of a franchise.
License
A business arrangement that occurs when the owner of intellectual property (the licensor) contracts to permit another party (the licensee) to use the intellectual property.
Joint Venture
An arrangement in which two or more business entities combine their resources to pursue a single project or transaction.
Joint Venture Corporation
A corporation owned by two or more joint venturers that is created to operate a joint venture.
Strategic Alliance
An arrangement between two or more companies in which they agree to ally themselves to accomplish a designated objective.
