Question 1

To form a limited liability company, articles of organization must be filed with the federal Small Business Administration.

Accepted Answer

A) True 
 B)False

Question 2

Outreach Security & Rescue, LLC, is a limited liability company. Unless the members have agreed otherwise, participants in the firm's management will be considered to include

Accepted Answer

A)   all members.
B)   no member.
C)   one member.
D)   one non-member manager.E) B) and D)
F) All of the above

Question 3

Bethany and Claiborne want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in

Accepted Answer

A)  all states.
B)  no state.
C)  less than twenty states.
D)  only Wyoming and Florida.E) C) and D)
F) None of the above

Question 4

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

Accepted Answer

A)   an alter ego, 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 C)

Question 5

Valu Food Markets is an incorporated cooperative. Like other incorporated cooperatives, Valu Food distributes profits to its owners on the basis of

Accepted Answer

A)   the amount of capital they contribute.
B)   the degree to which they participate in management.
C)   their transactions with the cooperative.
D)   the requirements of the state in which it was incorporated.E) B) and C)
F) None of the above

Question 6

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is

Accepted Answer

A)   a business trust.
B)   a joint stock company.
C)   a joint venture.
D)   a syndicate.E) None of the above
F) B) and D)

Question 7

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) A) and B)
F) All of the above

Question 8

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

Accepted Answer

A)   in the United States.
B)   in which its members are citizens.
C)   in which it does business.
D)   in which it is sued.E) B) and D)
F) C) and D)

Question 9

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is

Accepted Answer

A)   dissociation.
B)   dissolution.
C)   a violation of the law.
D)   wrongful but not a violation of the law.E) All of the above
F) B) and C)

Question 10

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

Accepted Answer

A)   act as a creditor, but cannot otherwise invest or participate.
B)   become a member.
C)   not become a member, but can participate in its operations.
D)   not become a member or otherwise participate in its operations.E) B) and D)
F) A) and B)

Question 11

Generally, if a member dissociates form a limited liability company (LLC), the other members cannot continue to carry on the LLC's business.

Accepted Answer

A) True 
 B)False

Question 12

Lebron, Michael, Nolan, and O'Neill combine 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) A) and D)
F) None of the above

Question 13

A cooperative cannot be incorporated.

Accepted Answer

A) True 
 B)False

Question 14

Lightspeed Corporation and Mindful, Inc., two game creators, wish to combine their capabilities to make and market Nanoworld, a special limited-edition online 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) B) and C)
F) A) and C)

Question 15

If a dispute arises and the applicable limited liability company statute does not cover the issue, a court will most likely dismiss the case.

Accepted Answer

A) True 
 B)False

Question 16

Members of a limited liability company (LLC) can stipulate in their operating agreement how managers will be chosen or removed.

Accepted Answer

A) True 
 B)False

Question 17

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to

Accepted Answer

A)   capital contributions.
B)   participation in management.
C)   the number of members.
D)   members' seniority.E) C) and D)
F) B) and D)

Question 18

Limited liability companies cannot enter into contracts or hold title to property.

Accepted Answer

A) True 
 B)False

Question 19

Unless otherwise agreed, joint venturers share profits and losses equally.

Accepted Answer

A) True 
 B)False

Question 20

Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to

Accepted Answer

A)   avoid personal liability for the acts of the cooperative.
B)   obtain an exemption from state laws governing corporations.
C)   pay no taxes on their business income.
D)   pool their resources to gain an advantage in the marketplace.E) B) and C)
F) B) and D)

Exam 28: Limited Liability Companies and Special Business Forms

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Valu Food Markets is an incorporated cooperative. Like other incorporated cooperatives, Valu Food distributes profits to its owners on the basis of

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 every state

Correct AnswerverifiedShow Answer

To form a limited liability company, articles of organization must be filed with the federal Small Business Administration.

Correct AnswerverifiedShow Answer

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is

Correct AnswerverifiedShow Answer

If a dispute arises and the applicable limited liability company statute does not cover the issue, a court will most likely dismiss the case.

Correct AnswerverifiedShow Answer

Unless otherwise agreed, joint venturers share profits and losses equally.

Correct AnswerverifiedShow Answer

Bethany and Claiborne want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Outreach Security & Rescue, LLC, is a limited liability company. Unless the members have agreed otherwise, participants in the firm's management will be considered to include

Correct AnswerverifiedShow Answer

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is

Correct AnswerverifiedShow Answer

Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to

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

A cooperative cannot be incorporated.

Correct AnswerverifiedShow Answer

Members of a limited liability company (LLC) can stipulate in their operating agreement how managers will be chosen or removed.

Correct AnswerverifiedShow Answer

Generally, if a member dissociates form a limited liability company (LLC), the other members cannot continue to carry on the LLC's business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Limited liability companies cannot enter into contracts or hold title to property.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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