Ch 17 - Limited Liability Business Forms

These flashcards cover key vocabulary terms related to limited liability business forms, including definitions and relevant concepts.

Limited Partnership (LP)

A business structure consisting of at least one general partner who manages the partnership and has full liability, and at least one limited partner who has limited liability and does not participate in management.

General Partner

The partner in a limited partnership who manages the partnership and has full liability for its obligations.

Limited Partner

A partner in a limited partnership who does not participate in management and has limited liability.

Dissociation

The process by which a partner ceases to be associated with a partnership.

Dissolution

The legal process of dissolving a partnership, which can occur by mutual agreement, withdrawal, death, bankruptcy, or court order.

Limited Liability Partnership (LLP)

A partnership that limits partners' personal liability for the debts of the partnership and requires filing formation documents with the state.

Family Limited Liability Partnership (FLLP)

A limited liability partnership where all partners are related to each other and must be natural persons.

Limited Liability Company (LLC)

A legal business entity that provides limited liability to its owners (members) and is formed by filing articles of organization.

Members (of an LLC)

Owners of a limited liability company who have limited liability and are typically not personally liable beyond their investment.

Piercing the Corporate Veil

A legal concept where the limited liability of members of an LLC can be disregarded, making them personally liable for debts under certain circumstances.

Taxation Options for LLCs

LLCs can be taxed as 'pass through' entities (like sole proprietorships or partnerships) or as corporations, affecting how profits are taxed.

Operating Agreement

A document that outlines the management structure, profit distribution, transfer of membership interests, and other operational rules of an LLC.

Fiduciary Duties (in LLCs)

Duties of care and loyalty owed by members to the LLC, similar to those in partnerships.

Wrongful Dissociation

When a member of an LLC dissociates in a manner that breaches the operating agreement or is contrary to the partnership's terms.

Winding Up Process

The process of liquidating assets, paying debts, and distributing remaining assets after dissolution of a partnership or LLC.