Basic Principles
Liability extending beyond business assets to personal assets.
What is personal liability?
The person for whom an agent acts.
What is a principal?
Business owned and operated by one person.
What is a sole proprietorship?
A formal statement filed with the state to notify the public of the entity's dissolution.
What is a statement of dissolution?
An agreement, written or oral, that sets forth the terms of a partnership.
What is a partnership agreement.
Principle that each partner and the partnership are liable for all debts and wrongful acts.
What is joint and several liability?
An agency agreement, written or oral.
What is express agency?
Business owned and operated by two or more persons.
What is a general partnership?
The process of wrapping up business affairs, terminating business, satisfying obligations, selling assets and collecting debts.
What is winding up?
Document filed with Secretary of State providing notice of partners who are authorized to act for the partnership.
What is a statement of authority?
The tax status in which all income is passed through to individuals or partners.
What is pass through tax status?
An agency relationship in which there is no express agreement, but the parties' words, conduct or prior dealings show the existence of their agents relationship.
What is implied agency?
Business created under a state statute in which some partners have limited liability.
What is a limited partnership?
A dissociation caused by the breach of a partnership agreement.
What is a wrongful dissociation?
The document filed with the state that creates a partnership where some partners have general liability and some have limited liability.
What is a limited partnership certificate?
The tax status in which income is taxed at the corporate entity level and the individual level.
What is double taxation?
An agency arising from acts that lead others to believe an agency relationship exists.
What is agency by estoppel?
Business entity providing limited liability for its partners from debts and torts in most states.
What is a limited liability partnership?
Dissolution of an entity by the court.
What is judicial dissolution?
If you form a limited liability partnership, this type of state will give all partners protection from personal liability, whether arising in tort or contract.
What is a full shield state?
A name that must be registered with state or local officials because it does not disclose the surname of the business owner.
What is a fictitious name?
Duty to act loyally and in good faith.
What are fiduciary duties?
A type of partnership formed to carry out a single enterprise, rather than an ongoing business. It has limited scope, shared risks and profits and is common among the healthcare and tech industries.
What is a joint venture?
Events relating to a general partner that cause dissolution.
What are events of withdrawal?
An account stating the money or value of property contributed by each partner and tracking each partner's contributions and distributions.
What is a capital account?