Bus Law Ch. 38 – Flashcards
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The law governing limited liability companies is uniform.
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False
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Members of limited liability companies are shielded from personal liability in many situations.
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True
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The alter-ego theory can be applied to a corporation, but not a limited liability company.
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False
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Limited liability companies are entities apart from their owners.
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True
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A limited liability company can be taxed as a partnership.
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True
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A limited liability company is a citizen of every state of which their members are citizens.
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True
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A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.
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True
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Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership.
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True
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For federal income tax purposes, one-member limited liability companies are not taxed.
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False
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Most states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC was formed.
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True
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A limited liability company must be managed by nonmembers.
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False
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Limited liability company operating agreements typically contain provisions relating to management.
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True
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If a limited liability company (LLC) agreement does not cover a topic, the state LLC statute will govern.
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True
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A member of a limited liability company (LLC) has the power and the right to dissociate from the LLC at any time.
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False
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Generally, a dissociated member of a limited liability company (LLC) has the right to buy his or her interest in the LLC from the other members.
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False
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If a member's dissociation from a limited liability company is rightful, normally the dissociated member has the right to force the LLC to dissolve.
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False
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Most courts apply the same principles to joint ventures as they apply to partnerships.
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True
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A joint stock company is generally treated as a partnership.
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True
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The law considers all new, single-owner businesses to be sole proprietorships unless the owner affirmatively adopts some other form.
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True
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Limited personal liability obviates the need to obtain for insurance for significant business liability risks.
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False
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Coco is considering forms of business organization for her concessions business—Coco's Cakes. Most states require that a limited liability company have
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At least one member
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Bee Hive Honey, LLC's members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is
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A legal entity apart from the owners
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Otto is considering forms of business organization for Pro Tree Service, his landscaping firm. Like most states, Otto's state requires that to form a limited liabil¬ity company, he must file with a central state agency
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Articles of organization
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Custom Auto Body & Detailing, LLC, is a limited liability company. Unless indi¬cated otherwise on the Custom Auto's federal tax form, the firm will be taxed as
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A partnership
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Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of
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Every state in which its members are citizens
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Business Enterprise Company agrees to sell a commercial office building and parking garage to City Investments, Inc., which assigns the rights to the realty to Downtown Properties, LLC. Downtown Properties does not yet exist, but once it is created and comes into existence, the contract on novation will most likely be
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Enforceable
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Qatar Global Investments is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can
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become a member
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Arnie is a member of Bowling & Billiards, LLC, a limited liability company. Arnie can participate in the firm's management
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to any extent
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StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the mem¬bers, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be
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divided equally among the members
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Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint ven¬ture is usually formed for
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A single transaction or project
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Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to
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Partnerships
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Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management
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To any extent
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Lauren, Marcella, and Norell form a syndicate to buy a professional soccer franchise. This syndicate could be set up as
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a corporation
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Transworld Import Company and USA Export, Inc., form a business organiza-tion to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This or¬ganization is
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A joint stock company
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As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is
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nothing
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Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is
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A business trust
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Gabriella is a beneficiary of a business trust. As a beneficiary, she is required to
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None of these choices
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As the trustee of a business trust, Bertoldi is required to
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distribute the trust's profits
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Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to
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pool their resources to gain an advantage in the marketplace
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Medical Professionals Supply Source is an unincorporated cooperative. Unincorporated cooperatives are often treated like
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partnerships
