blaw chapter 33 – Flashcards
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A limited liability company is operated in compliances with state law.
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true
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A limited company is a legal entity apart from its owners.
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true
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Federal law dictates the requirements for the formation of a limited liability company.
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false
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Forming a limited liability company requires filing articles of organization in a state office.
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true
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For federal jurisdictional purposes, a limited liability company can choose to be treated like a corporation.
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false
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The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status.
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false
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A limited liability company limits the personal liability of its members.
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true
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For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.
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true
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A limited liability company cannot be taxed as a partnership.
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false
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A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States.
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false
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An operating agreement for limited liability company need not be in writing.
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true
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A limited liability company is required to have an operating agreement.
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false
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Most limited liability company (LLC) statues provide that unless the members agree otherwise, all profits of the LLC will be divided equality.
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true
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In a limited liability company, members must participate in the management of the company.
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false
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In a limited liability company, members cannot participate in its management.
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false
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In a limited liability company, members do NOT have to participate in its management.
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true
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Most limited liability company statutes have strict provisions regulating members' meetings.
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false
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The dissociation of a member of a limited liability company in violation of the operating agreement is legally wrongful.
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true
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Unless otherwise agreed, the participants in a joint venture have an equal voice in controlling the enterprise.
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true
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Giving control of a joint venture to one of its participants does not affect the status of the relationship.
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true
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A joint venture is taxed like a partnership.
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false
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Unless otherwise agreed, the participants in a joint venture share its profits equally.
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true
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A joint venture does not terminate unless one of its participants dies.
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false
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The participants in a joint venture have more implied and apparent authority than the partners in a partnership.
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false
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A cooperative may take the form of a corporation.
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true
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A syndicate may exist in the form of a partnership but not a corporation.
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false
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A group of individuals getting together to finance a particular project may form a syndicate.
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true
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The owners of a joint stock company are personally liable for its obligations.
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true
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In some states, business trusts pay corporate taxes.
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true
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The owners of an incorporated cooperative are personally liable for its obligations.
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false
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A syndicate may be organized as a corporation but not as a partnership.
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false
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The beneficiaries of a business trust are personally liable for its obligations.
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false
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Like a corporation, the ownership of a joint stock company is represented by shares of stock.
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true
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The owners of an unincorporated cooperative have joint liability for its obligations.
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true
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A business trust is created by a written trust agreement.
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true
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Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of...
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(d) a shareholder of a corporation
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High Pointe LLC's members include Irvin. For purposes of holding title to property, High Pointe is...
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(c) a legal entity apart from the owners
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Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is...
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(c) a legal entity apart from the owners
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Greta is a member of Hovercraft LLC. As a member, Greta is...
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(c) an owner
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Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency...
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(c) articles of organization
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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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(b) every state in which its members are citizens
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Mit-E Mart LLC was formed in New Jersey. Mit-E Mart's members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of...
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(c) New Jersey and New York
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Jay is a member of Kappa, LLC, a limited liability company. Jay is liable for Kappa's debts...
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(b) to the extent of his capital contribution
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Energy Resources, LLC, is a limited liability company. Rather than dis-tribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as...
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(a) a corporation
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China Bank is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to an LLC in the United States, China Bank can...
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(b) become a member
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QuizBooks LLC is a limited liability company. Like any other LLC, unless QuizBooks chooses otherwise, the firm will be taxed as...
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(c) a partnership
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Serious Gamers, LLC, is a limited liability company. Among the mem¬bers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of...
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(b) partnership law
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CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed other-wise, participants in the firm's management will be considered to include...
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(a) all members
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Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management...
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(c) to any extent
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Waste Management Services, LLC, is a member-managed limited liability company. If the law in Waste's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to...
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(a) capital contributions
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Cookie Kiosk LLC's members and managers are Dwight, Emma, and Fawn. After Dwight's relationship to Cookie Kiosk ends, Emma and Fawn agree to discontinue the firm's business. This is most likely...
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(b) optional
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Flip is a member of Great States Trucking LLC. Flip's relationship to Great States ends, but the firm continues to do business. This is...
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(a) dissociation
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Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to build an office and retail complex. Their form of business organization is...
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(c) a joint venture
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Omega Corporation and Precision Coding, Inc., two software firms, wish to combine their research and development capabilities to make a special, limited edition computer game. The most appropriate legal entity for this project might be...
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(c) a joint venture
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Ray, Sully, and Toma form a syndicate to buy a professional football team. This syndicate could be set up as...
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(b) a corporation or a partnership
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Loni, Michel, and Nita are investors in Oceanic Exploration, a busi¬ness trust. A business trust is managed by its...
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(d) trustees
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Jen, Carlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to...
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(d) pool their resources to gain an advantage in the market
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Drew is a beneficiary of a business trust. As a beneficiary, Drew is required to...
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(d) neither distribute the profits nor manage the property
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As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is...
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(c) nothing
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Elmo is the owner and manager of a business trust. Under the terms of a business trust, Elmo is required to...
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(a) distribute the profits and manage the property
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Fab is the owner and manager of a business trust. Gilly is the benefici¬ary. Responsibility for the debts and obligations of the trust rest with...
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(b) Fab only
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Consumers in Delta City form a business organization to provide, without profit, an economic service to its members. This is...
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(b) a cooperative
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Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This business organization is...
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(b) a joint stock company
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Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or...
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(d) a syndicate
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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) a business trust
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National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by...
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(b) shares of stock
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Neverend Music Company and Monotonous Metronome Corporation form a joint stock company. A joint stock company can be formed for, at the most...
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(b) a perpetual existence
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Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other unincorporated cooperatives are generally treated like...
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(d) partnerships
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Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of...
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(c) their transactions with the cooperative
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Vela and other farmers in Washington County form a business organization to provide, without profit, an economic service to its members. This is...
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(b) a cooperative
