Ch 19 Vocab Crc Bus Law

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Entrepreneur

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One who initiates and assumes the financial risk of a new business enterprise and undertakes to provide or control its management.

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Sole Proprietorship

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The simplest form of business organization, in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business.

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Partnership

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An agreement by two or more persons to carry on, as co-workers, a business for profit.

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Articles of Partnership

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A written agreement that sets forth each partner’s rights and obligations with respect to the partnership.

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Joint and Several Liability

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In partnership law, a doctrine under which a plaintiff may sue, and collect a judgment from, all of the partners together (jointly) or one or more of the partners separately (severally, or individually).

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Limited Liability Partnership (LLP)

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A hybrid form of business organization that is used mainly by professionals who normally do business in a partnership. An LLP is a pass-through entity for tax purposes, but as a partner’s personal liability for the malpractice of other partners limited.

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Limited Partnership (LP)

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A partnership consisting of one or more general partners and one or more limited partners.

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General Partner

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In a limited partnership, a partner who assumes responsibility for the management of the partnership and has full liability for all partnership debts.

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Limited Partner

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In a limited partnership, a partner who contributes capital to the partnership but has no right to participate in its management and no liability for partnership debts beyond the amount of her or his investment.

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Certificate of Limited Partnership

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The document that must be filed with a designated state official to form a limited partnership.

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Corporation

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A legal entity formed in compliance with statutory requirements that is distinct from its shareholder-owners.

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Limited Liability Company (LLC)

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A hybrid form of business enterprise that offers the limited liability of a corporation and the tax advantages of a partnership.

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Articles of Organization

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The document filed with a designated state official by which a limited liability company is formed.

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Member

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A person who has an ownership interest in a limited liability company.

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Operating Agreement

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An agreement in which the member of a limited liability company set forth the details of how the business will be managed and operated.

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Dissociation

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The severance of the relationship between an individual and a business firm when the individual ceases to be associated with the carrying of the firm’s business.

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Joint Venture

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A joint undertaking for specific commercial enterprise by two or more persons or business entities. A joint venture is treaded like a partnership for federal income tax purposes.

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Syndicate

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A group of individuals or firms that join together to finance a project. A syndicate is also called an investment group.

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Joint Stock Company

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A hybrid form of business organization that combines characteristics of a corporation and a partnership. Usually, a joint stock company is regarded as a partnership for tax and other legal purposes.

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Business Trust

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A form of business organization, created by a written trust agreement, that resembles a corporation. Legal ownership and management of the trust’s property stay with the trustees, and the profits are distributed to the beneficiaries, who have limited liability.

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Cooperative

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An association, which may or may not be incorporated, that is organized to provide an economic service to its members. Unincorporated, that is organized to provide an economic service to its members. Unincorporated cooperatives are often treated like partnerships for tax and other legal purposes.

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Franchise

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One receiving a license to use another’s (the franchisor’s) trademark, trade name, or copyright in the sale of goods and services.

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Franchisor

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One licensing another (the franchisee) to use the owner’s trademark, trade name, or copyright in the selling of goods or services.