Chapter 26/27 Flashcards Preview

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Flashcards in Chapter 26/27 Deck (24):

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



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

sole proprietorship


any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods or services



one receiving a license to use another's trademark, trade name, or copyright in the sale of goods and services



one licensing another to use the owner's trademark, trade name, or copyright in the selling of goods or services



an agreement by two or more persons to carry on, as co-owners a business for profit



market value of the good reputation of any company, partnership, or other business entity



a business entity that has no tax liability. the entity's income is passed through to the owners, and they pay taxes on the income

pass-through entity


a tax return submitted by a partnership that only reports the business's income and losses. The partnership itself does not pay taxes on the income, but each partner's share of the profit is taxed as individual income to that partner

information return


a written agreement that sets forth each partner's rights and obligations with respect to the partnership

articles of partnership


partnership liability imposed by a court on persons who have held themselves out to be partners, even though they were not, and others have detrimentally relied on their representations

partnership by estoppel


the act or agreement of a debtor permitting a judgment to be entered against him or her by a creditor, for an agreed sum, without the institution of legal proceedings

confession of judgment


in partnership law, an order granted by a court to a judgment creditor that entitles the creditor to attach a partner's interest in the partnership

changing order


in partnership law, the partners shared liability for partnership obligations and debts. A third party must sue all of the partners as a group, but each partner can be held liable for the full amount

joint liability


in partnership law, a doctrine under which a plaintiff may sue and collect a judgment from, all of the partners together or one or more of the partners separately. A partner can be held liable even if she or he did not participate in, ratify, or know about the conduct that gave rise to the lawsuit

joint and several liability


the severance of the relationship between a partner and a partnership when the partner ceases to be associated with the carrying on of the partnership business



amount payable to a partner on his or her dissociation from a partnership, based on the amount distributable to that partner if the firm were wound up on that date, and offset by any damages for wrongful dissociation

buyout price


the formal disbanding of a partnership or corporation. it can take place by (1) acts of the partners or, in a corporation, acts of the shareholders and board of directors; (2_ the subsequent illegality of the firm's business; (3) the expiration of a time period stated in a partnership agreement or a certificate of incorporation; or (4)judicial decree



the second of two stages in termination of a partnership or corporation, in which the firm's assets are collected, liquidated, and distributed, and liabilities are discharged

winding up


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 a partner's personal liability for the malpractice of other partners is limited

limited liability partnership


a partnership consisting of one or more general partners (who manage the business and are personally liable for debts of the partnership) and one or more limited partners

limited partnership


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

general partner


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

limited partner


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

certificate of limited partnership