Full Semester 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 partnership’s 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 Partner
Partner who assumes unlimited liability for the debts of the partnership; responsible for partner management.
Limited Partner
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 not personally liable for malpractice or negligence unless that partner is responsible for providing the service that resulted in the claim.
S Corporations
Corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes and therefore is subject to income taxes.
C Corporations
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.
Corporation
Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
Organization Expenses
Costs such as legal fees and promoter fees to bring an entity into existence.
Proxy
Legal document giving a stockholder’s agent the power to exercise the stockholder’s voting rights.