Chapter 17
Order by
20 terms
Terms | Definitions |
|---|---|
 Articles of Partnership | A written agreement that sets forth each partner's rights and obligations with respect to the partnership. |
| Buyout Price | the 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. |
| Buy-Sell Agreement | In the context of partnerships, an express agreement made at the time of partnership formation for one of more of the partners to buy out the other or others should the situation warrant- and thus provide for the smooth dissolution of the partnership. |
| Charging Order | In partnership law, an order granted by a court to a judgment creditor to attach profits or assets of a partner on dissolution of the partnership. |
| Confession of Judgment | the act of a debtor in permitting a judgment to be entered against him or her by a creditor, for an agreed sum, without the institution of legal proceedings. |
| Dissociation | 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. |
| Dissolution | the formal disbanding of a partnership or a corporation. It can take place by (1) acts of the partners or, in a corporation, of the shareholders and board of directors; (2) the death of a partner; (3) the expiration of a time period stated in a partnership agreement or a certificate of incorporation; or (4) judicial decree. |
| Entrepreneur | one who initiates and assumes the financial risks of a new enterprise and who undertakes to provide or control its management. |
| Franchise | any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright, under specified conditions or limitations, in the selling of goods and services. |
| Franchisee | One receiving a license to use another's (the franchisor's) trademark, trade name, or copyright in the sale of goods and services. |
| Franchisor | One licensing another (the franchisee) to use his or her trademark, trade name, or copyright in the sale of goods or services. |
| Goodwill | In the business context, the valuable reputation of a business viewed as an intangible asset. |
| Information return | A tax return submitted by a partnership that only reports the income earned by the business. The partnership as an entity does not pay taxes on the income received by the partnership. A partner's profit from the partnership (whether distributed or not) is taxed as individual income to the individual partner. |
| Joint and Several Liability | A joint undertaking of a specific commercial enterprise by an association of persons. A joint venture is normally not a legal entity and is treated like a partnership for federal income tax purposes. |
| Joint Liability | Shared liability. In the partnership law, partners incur joint liability for partnership obligations and debts. For example, if a third party sues a partner on a partnership debt, the partner has the right to insist that the other partners be sued with him or her. |
| Partnership | An agreement by two or more persons to carry on, as co-owners, a business for profit. |
| Partnership by Estoppel | A judicially created partnership that may, at the court's discretion, be imposed for purposes of fairness. The court can prevent those who present themselves as partners (by who are not) from escaping liability if a third person relies on an alleged partnership in good faith and is harmed as a result. |
| Pass-Through Entity | Any entity that does not have its income taxed at the level of that entity; examples are partnerships, S corporations, and limited liability companies. |
| Sole Proprietorship | The simplest for of business, 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. |
| Winding up | The second of two stages involved in termination of a partnership or corporation. Once the firm is dissolved, it continues to exist legally until the process of winding up all business affairs (collecting and distributing the firm's assets) is complete. |
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