Key Terms
Definition
A partnership that has BOTH general partners AND limited partners.
Key issue at dissolution
How to value the withdrawing partner's share.
BUY/SELL AGREEMENT
Provision in articles of partnership that sets terms for valuing and paying a withdrawing partner's share
PARTNERSHIP
Unincorporated association of two or more co-owners operating a business for profit
GENERAL PARTNER
Each owner in a partnership
GENERAL PARTNERSHIP
All partners participate fully in management; share equally in profits and losses regardless of differing contributions
ARTICLES OF PARTNERSHIP
Written agreement that sets forth how a general partnership will be run; optional
FLOW-THROUGH TAX ENTITY
Business does not pay tax on profits; income passes to owners who pay personal income tax
JOINT AND SEVERAL LIABILITY
Creditors can sue all partners together or any single partner for the full amount
FIDUCIARY DUTY
Obligation to act in the best interest of the partnership; includes good faith, fair dealing, no competition, no self- d
LIMITED PARTNERSHIP
Partnership with both general partners (unlimited liability, full management) and limited partners (limited liability, n
LLP (LIMITED LIABILITY PARTNERSHIP)
Partnership structure with flow- through taxation and limited liability for all partners; designed for professionals