Acct Final Ch 12

limited partnership

A _______ has two classes of partners, general and limited. At least one partner must be a general partner, who assumes management duties and unlimited liability for the debts of the partnership. The ______ partners have no personal liability beyond the amounts they invest in the partnership. _____ partners have no active role except as specified in the partnership agreement.

general partnership

A partnership in which all partners have mutual agency and unlimited liability

voluntary association

A partnership is a ____________ between partners. Joining a partnership increases the risk to one's personal financial position.

Taxation

A partnership is not subject to taxes on its income.

Partnership Agreement

Forming a partnership requires that two or more legally competent people agree to be partners. Their agreement becomes a partnership contract ; also called articles of partnership., also called articles of copartnership.

limited liability corporation LLC

In _______ individual owners have limited liability, but the corporation typically has a limited life defined in the agreement.

Co-Ownership of Property

Partnership assets are owned jointly by all partners. Any investment by a partner becomes the joint property of all partners. Partners have a claim on partnership assets based on their capital account and the partnership contract.

limited partnership

Some individuals who want to invest in a partnership are unwilling to accept the risk of unlimited liability. Their needs can be met with a ______________________

Limited Life

The ____of a partnership is ____. Death, bankruptcy, or any event taking away the ability of a partner to enter into or fulfill a contract ends a partnership. Any one of the partners can also terminate a partnership at will.

limited liability partnership LLP

_________ protects innocent partners from malpractice or negligence claims brought against an offending partner. In most states, individual partners are personally liable for the debts of the partnership.

partnership

____is an unincorporated association of two or more people to pursue a business for profit as co-owners. Many businesses are organized as partnerships.

is a voluntary association, partners have to make a Partnership Agreement, has a Limited Life, not subject to Taxation, Mutual Agency, Unlimited Liability, Co-Ownership of Property

characteristics of a partnership

Unlimited Liability

implies that each partner can be called on to pay a partnership's debts. When a partnership cannot pay its debts, creditors usually can apply their claims to partners' personal assets. If a partner does not have enough assets to meet his or her share of the partnership debt, the creditors can apply their claims to the assets of the other partners.

Mutual Agency

implies that each partner is a fully authorized agent of the partnership. As its agent, a partner can commit or bind the partnership to any contract within the scope of the partnership business.