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LGLA2311-Chapter 3
Business Organizations for Paralegals
Answer | Question |
---|---|
Unlimited personal liability | liability for business debt, which extends beyond what is invested in a business to an individuals personal assets. |
UPA | Uniform Partnership Act, model for partnership legislation in about 1/4 of the states. |
RUPA | Revised Uniform Partnership Act, model for partnership legislation in about 3/4 of the states. |
Capital account | An account stating the money or value of any property contributed by a partner. |
Tenancy in partnership | Property co-owned by partners. |
Interest in partnership | A partner's right to profits. |
Joint & several liability | principle that each partners and the partnership are liable for all debts and wrongful acts. |
Charging order | court order requiring payment of partner's distributions to judgement creditor rather than to partner. |
Marshaling of assets or exhaustion rule | partnership theory requiring creditors to first exhaust partnership assets before pursuing partners individual assets. |
Partnership agreement | an agreement by two or more persons to do business together as a partnership; may be written or oral. |
Foreign partnership | a partnership doing business in a state other than the one in which it was formed. |
General agency | the authority of a partner to act for and bind the partnership and other partners. |
Statement of Authority | document filed with Secretary of State providing notice of partners who are authorized to act for partnership. |
Statement of Denial | document filed with Secretary of State denying information in Statement of Authority or providing notice of withdrawal from partnership. |
Draw | an advance payment, usually made against anticipated profits. |
Recitals | introductory clauses in agreements setting forth basis for agreement. |
Partnership for a term | a partnership with a definite term of duration. |
Partnership at will | a partnership with no specific term of duration. |
Non-compete clauses | clauses in agreement restricting signatory from competing with another during and after parties' relationship terminates. |
Tax year | annual accounting period for keeping records and reporting income and expenses. |
Cash method of accounting | Listing expenses and income in business records only when they are paid or received. |
Accrual method of accounting | listing expenses and income in business records when they are incurred or billed rather than when they are actually paid or received. |
GAPP | generally accepted accounting principles. |
Dissolution | change in the relation of partners, caused when a partner leaves the business; generally, a termination of a partnership. |
Winding up | wrapping up business affairs, terminating business, satisfying obligations, selling assets, and collecting debts. |
Key person policies | insurance policies on the life of key individuals in a business. |
Dissociation | a withdrawal of partner from a partnership; does not necessarily cause a dissolution or termination of partnership. |
Wrongful dissociation | a dissociation caused by a breach of partnership agreement. |
Statement of Dissociation | document filed with state to identify dissociation partner and filed to limit period for which partnership will be liable for dissociating partner's acts. |
Statement of Dissolution | a formal statement filed with state to notify others of partnership dissolution. |
Check the box | method by which businesses elect how they wish to be taxed, namely, whether as partnerships or corporations. |