Question 1

Typically, the articles of organization of a limited liability company (LLC) include information on how the LLC will be managed.

Accepted Answer

A) True 
 B)False

Question 2

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to

Accepted Answer

A)   ​the extent that he assumes liability for the firm's debts.
B)   ​the extent of his investment in the firm.
C)   ​any extent.
D)   ​no extent.E) B) and D)
F) None of the above

Question 3

Home Healthcare, LLC's owners are Inez and Jan. For purposes of entering into contracts, Home Healthcare is

Accepted Answer

A)   ​an aggregate of its owners.
B)   ​a non-entity
C)   ​a legal entity apart from its owners.
D)   ​a non-participating third party.E) A) and C)
F) A) and B)

Question 4

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

Accepted Answer

A)   ​in proportion to the total number of members.
B)   ​to the extent of her investment in the firm.
C)   ​in proportion to her profit derived from the firm.
D)   ​to the full extent.E) B) and D)
F) None of the above

Question 5

Western Rodeo LLC is a limited liability company (LLC) . Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of

Accepted Answer

A)   ​all states in the United States.
B)   ​every state of which its members are citizens.
C)   ​any state in which it does business.
D)   ​no state-an LLC is not a "citizen."E) B) and D)
F) None of the above

Question 6

ost states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.​

Accepted Answer

A) True 
 B)False

Question 7

Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.

Accepted Answer

A) True 
 B)False

Question 8

Lightning Corporation and Mind, Inc., two game creators, wish to combine their capabilities to make and market Nano, a special limited-edition game. The appropriate legal entity for this project is most likely

Accepted Answer

A)   ​a business trust.
B)   ​a joint stock company.
C)   ​a joint venture.
D)   ​a syndicate.E) A) and B)
F) C) and D)

Question 9

In most states, a limited liability company can have only a limited number of members.

Accepted Answer

A) True 
 B)False

Question 10

A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

Accepted Answer

A) True 
 B)False

Question 11

Leon, Michael, Nolan, and O'Neill join together to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

Accepted Answer

A)   ​a business trust.
B)   ​a joint stock company.
C)   ​a joint venture.
D)   ​a syndicate.E) C) and D)
F) A) and C)

Question 12

Lauren, Maria, and Nina form a syndicate to buy a professional soccer franchise. This syndicate could be set up as

Accepted Answer

A)   ​a joint venture.
B)   ​a corporation.
C)   ​a sole proprietorship.
D)   ​a limited liability company.E) C) and D)
F) B) and D)

Question 13

Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have ​

Accepted Answer

A)   ​a corporate veil, but no minimum number of participants.
B)   ​at least one member.
C)   ​at least two members.
D)   ​at least one non-member manager.E) None of the above
F) A) and D)

Question 14

In most states, a limited liability company must have at least two members.

Accepted Answer

A) True 
 B)False

Question 15

The members of a limited liability company have unlimited liability for any loss or injury caused by the wrongful acts or omissions of the firm.

Accepted Answer

A) True 
 B)False

Question 16

Start-Ups, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Accepted Answer

A)   ​distributed according to members' proportionate ownership in the firm.
B)   ​divided equally among the members.
C)   ​forfeited to the state.
D)   ​reinvested in the business until the dispute is resolved.E) B) and C)
F) A) and D)

Question 17

Under most limited liability company statutes, if the members do not specify how profits will be split, they are divided in proportion to the members' capital investment.

Accepted Answer

A) True 
 B)False

Question 18

As the trustee of a business trust, Travis is required to

Accepted Answer

A)   ​distribute the trust's profits.
B)   ​assume responsibility for the trust's debts.
C)   ​draft a written trust agreement.
D)   ​none of the choices.E) B) and C)
F) None of the above

Question 19

When a limited liability company is dissolved, any member, including those who wrongfully dissociated, may participate in the winding up process.

Accepted Answer

A) True 
 B)False

Question 20

Oil Reserves, Inc., and Petro Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil Reserves files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Accepted Answer

A)   ​sole proprietorships.
B)   ​limited liability companies.
C)   ​corporations.
D)   ​partnerships.E) B) and C)
F) B) and D)

Exam 38: Limited Liability Companies and Special Business Forms

When a limited liability company is dissolved, any member, including those who wrongfully dissociated, may participate in the winding up process.

Correct AnswerverifiedShow Answer

ost states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.​

Correct AnswerverifiedShow Answer

Under most limited liability company statutes, if the members do not specify how profits will be split, they are divided in proportion to the members' capital investment.

Correct AnswerverifiedShow Answer

Start-Ups, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Correct AnswerverifiedShow Answer

As the trustee of a business trust, Travis is required to

Correct AnswerverifiedShow Answer

Lauren, Maria, and Nina form a syndicate to buy a professional soccer franchise. This syndicate could be set up as

Correct AnswerverifiedShow Answer

Home Healthcare, LLC's owners are Inez and Jan. For purposes of entering into contracts, Home Healthcare is

Correct AnswerverifiedShow Answer

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

Correct AnswerverifiedShow Answer

Leon, Michael, Nolan, and O'Neill join together to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

Correct AnswerverifiedShow Answer

In most states, a limited liability company must have at least two members.

Correct AnswerverifiedShow Answer

A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

Correct AnswerverifiedShow Answer

Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.

Correct AnswerverifiedShow Answer

Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have ​

Correct AnswerverifiedShow Answer

Typically, the articles of organization of a limited liability company (LLC) include information on how the LLC will be managed.

Correct AnswerverifiedShow Answer

Lightning Corporation and Mind, Inc., two game creators, wish to combine their capabilities to make and market Nano, a special limited-edition game. The appropriate legal entity for this project is most likely

Correct AnswerverifiedShow Answer

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to

Correct AnswerverifiedShow Answer

In most states, a limited liability company can have only a limited number of members.

Correct AnswerverifiedShow Answer

Oil Reserves, Inc., and Petro Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil Reserves files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Correct AnswerverifiedShow Answer

Western Rodeo LLC is a limited liability company (LLC) . Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of

Correct AnswerverifiedShow Answer

The members of a limited liability company have unlimited liability for any loss or injury caused by the wrongful acts or omissions of the firm.

Correct AnswerverifiedShow Answer

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ost states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.

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Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have

Correct Answer
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