Partnership Definitions
General Partnership
All the partners have control over the firm
General partner
Someone who has full personal liability for debts of the firm
Termination
When the winding-up process is completed and the partnership ceases to exist
If a partner becomes insane, the partnership is dissolved. (True or False)
True
Trading Partnership
Buys and sells goods and services commercially
A partner who may be known to the public but takes no active part in management
Winding-up period
Termination or ending of the partnership; all partnership business is concluded
Can a partnership agreement be structured so as to continue the partnership business even if the partnership is dissolved? (yes or no)
Yes
Non-trading Partnership
Provides professional and noncommerical assistance, such as legal, medical, or accounting advice
Secret partner
Joint Venture
Occurs when two or more persons or firms combine their resources and skills to do a specific project
If you form a partnership to prepare income taxes for businesses over the next five years, does the agreement have to be in writing? (Yes or No)
Yes
Special Partnership
Some or all members of a partnership undertake a unique endeavor in the same area of business as the general partnership
Dormant Partner
A partner who is neither known to the public as a partner nor active in management.
What does IRS Stand for?
Under the UPA, a partnership can take title to property in its own name. (True or False)
False! This occurs under the revised UPA (RUPA).
How are they defined?
Classified according to their purpose and according to the extent of the liability of the partners
Nominal Partners
People who hold themselves out to be as partners, or let others do so, but are not truly partners. Ex: parents sometimes become nominal partners to assist children who have taken over the family business
Uniform Limited Partnership Act
Which of the following is known to the public but does not participate in management? a) silent partner b) dormant partner c) secret partner d) none of the above
A) Silent partner