Exam 30: Limited Liability Company and Limited Liability Partnership

Bart,Dale and Bill form a limited liability company.They each own a one-third interest in the company,and agree to divide profits and losses on that basis.The operating agreement was silent regarding the transfer of an interest,and it did not address the status of a transferee.Bart sells his interest to Milly for $10,000.The company earns $99,000 in profits.and Milly informs Dale and Bill that she is their new member.They say "no way," and that she can forget about a share of the profits.Who is right under the Uniform Limited Liability Company Act,and why?

A limited liability company is a(n)________ LLC in the state in which it is organized.

Limited liability companies are creatures of federal law.

A limited liability company can be organized:

An operating agreement for a limited liability company regulates the affairs of the company and the conduct of its business,but not relations among the members,managers,and company.

Limited liability company ________ regulate the formation,operation,and dissolution of LLCs.

In conformity with state law,five accountants formed a limited liability partnership.The partnership is dissolved at a time when partnership debts exceed assets.Which of the following is true?

The ULLCA is not law unless a state adopts it as its LLC statute.

Why,when choosing a name for a new limited liability company,must organizers include the words "limited liability company," "limited company," or an appropriate abbreviation?

In terms of fiduciary duty,a non-manager member of a manager-managed limited liability company is treated equally to a shareholder in a corporation.

In a "member-managed" limited liability company,management power and the number of votes allowed each member are determined by each member's capital contribution.

At the expiration of the term of a "term" limited liability company,the limited liability company can only be continued if all the members vote unanimously for its continuation.

Under the ULLCA,the articles of organization of a limited liability company need not set forth whether the limited liability company is to be a manager-managed LLC

Does it seem fair that owners of a limited liability company are not personally liable for debts of the company,even though they benefit from profit made by the company?

A member's distributional interest in a limited liability company is personal property and may be transferred in whole or in part.

Which of the following is true regarding membership sharing of limited liability company profits and losses?

The general rule is that owners of a limited liability company are not personally liable to third parties for the debts,obligations,and liabilities of a limited liability company beyond their capital contribution.

Ten persons formed the Magic City Company,LLC for a term of twenty years,with no designation as to whether the corporation is "member-managed" or "manager-managed." Shortly before the expiration of this period,the members held a vote on whether to continue the business for an additional five years.The vote was eight votes in favor and two against continuing.As a result:

A transferee of a distributional interest in a limited liability company becomes a member of the LLC if it is so provided in the operating agreement or if all the other members of the LLC consent.

Melinda,Brett,and Phil are the members of a "manager-managed" limited liability company.Melinda and Brett each contributed $1,000 in capital.Phil contributed $10,000 in capital.All of the members agreed to hire Betty to manage the company.Three months after she starts,however,Melinda and Brett have become dissatisfied with her.Phil wants her to stay.Which of the following is true?