Chapter Three Vocab

Front 1

General partnership

Back 1

Voluntary association of two or more persons who agree to carry on a business together for profit

Front 2

Unlimited personal liability

Back 2

Liability for business debt, which extends beyond what is invested in a business to an individual's personal assets

Front 3

UPA

Back 3

Uniform Partnership Act, model for partnership legislation in about two-fifths of the states

Front 4

RUPA

Back 4

Revised Uniform Partnership Act, model for partnership legislation in about three-fifths of the states

Front 5

General partnership

Back 5

A voluntary association of two or more persons to carry on a business for profit

Front 6

Capital account

Back 6

An account stating the money or value of any property contributed by a partner

Front 7

Tenancy in partnership

Back 7

Property co-owned by partners

Front 8

Interest in partnership

Back 8

A partner's right to profits

Front 9

Joint and several liability

Back 9

Principle that each partner and the partnership is liable for all debts and wrongful acts

Front 10

Charging order

Back 10

Court order requiring payment of partner's distributions to judgment creditor rather than to partner

Front 11

Marshaling of assets or exhaustion rule

Back 11

Partnership theory requiring creditors to first exhaust partnership assets before pursuing partners' individual assets

Front 12

Partnership agreement

Back 12

An agreement by two or more persons to do business together as a partnership; may be written or oral

Front 13

Fictitious business name statement

Back 13

Statement filed with public official to indicate names of owners of a business

Front 14

Foreign partnership

Back 14

A partnership doing business in a state other than the one in which it was formed

Front 15

Service of process

Back 15

Providing litigation notices (summons and complaint)

Front 16

General agency

Back 16

The authority of a partner to act for and bind the partnership and other partners

Front 17

Statement of Authority

Back 17

Document filed with secretary of state providing notice of partners who are authorized to act for partnership

Front 18

Statement of Denial

Back 18

Document filed with secretary of state denying information in Statement of Authority or providing notice of withdrawal from partnership

Front 19

Draw

Back 19

An advance payment, usually made against anticipated profits

Front 20

Recitals

Back 20

Introductory clauses in agreements setting forth basis for agreement

Front 21

Partnership for a term

Back 21

A partnership with a definite term of duration

Front 22

Partnership at will

Back 22

A partnership with no specific term of duration

Front 23

Non-compete clause

Back 23

Clauses in agreement restricting signatory form competing with another during and after parties' relationship terminates

Front 24

Tax year

Back 24

Annual accounting period for keeping records and reporting income and expenses

Front 25

Cash method of accounting

Back 25

Listing expenses and income in business records only when they are paid or received

Front 26

Accrual method of accounting

Back 26

Listing expenses and income in business records when they are incurred or billed rather than when they are actually paid or received

Front 27

GAAP

Back 27

Generally accepted accounting principles

Front 28

Dissolution

Back 28

Change in the relation of partners caused when a partner leaves the business; generally, a termination of a partnership

Front 29

Winding up

Back 29

Wrapping up business affairs, terminating business, satisfying obligations, selling assets, and collecting debts

Front 30

Key person policies

Back 30

Insurance policies on the life of key individuals in a business

Front 31

Dissociation

Back 31

A withdrawal of a partner from a partnership; does not necessarily cause a dissolution or termination or partnership

Front 32

Wrongful dissociation

Back 32

A dissociation caused by a breach of partnership agreement

Front 33

Statement of Dissociation

Back 33

Document filed with state to identify dissociating partner and filed to limit period for which partnership will be liable for dissociating partner's acts

Front 34

Statement of Dissolution

Back 34

A formal statement filed with state to notify others of partnership dissolution

Front 35

Check the box

Back 35

Method by which businesses elect how they wish to be taxed, namely, whether as partnerships or corporations