Question 1

Which of the following is true of capital contribution to an LLC?

Accepted Answer

A) Capital contribution can only be in the form of money or tangible property. 
B) Promissory notes are not considered capital contribution. 
C) A member's obligation to contribute capital is excused by the member's disability or other inability to perform. 
D) A member's obligation to contribute capital is not excused by the member's death. 
A) Capital contribution can only be in the form of money or tangible property. 
B) Promissory notes are not considered capital contribution. 
C) A member's obligation to contribute capital is excused by the member's disability or other inability to perform. 
D) A member's obligation to contribute capital is not excused by the member's death.

Question 2

An LLC is not liable for injury caused by the LLC member while acting within the ordinary course of business of the LLC.

Accepted Answer

A) True 
 B)False

Question 3

Partners of LLPs are personally liable for the LLPs' debts, and obligations, and liabilities.

Accepted Answer

A) True 
 B)False

Question 4

A(n)________ refers to an agreement entered into among members that governs the affairs and business of the LLC and the relations among members, managers, and the LLC.

Accepted Answer

A) certificate of interest 
B) articles of organization 
C) operating agreement 
D) agreement of conversion 
A) certificate of interest 
B) articles of organization 
C) operating agreement 
D) agreement of conversion

Question 5

An LLC can be organized in only one state.

Accepted Answer

A) True 
 B)False

Question 6

An LLC is a ________ in the state in which it is organized.

Accepted Answer

A) sole proprietorship 
B) domestic LLC 
C) term LLC 
D) general partnership 
A) sole proprietorship 
B) domestic LLC 
C) term LLC 
D) general partnership

Question 7

The disassociation of a member from a term LLC before the expiration of the specified term is wrongful.

Accepted Answer

A) True 
 B)False

Question 8

An operating agreement can be amended orally.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of liabilities of LLCs?

Accepted Answer

A) Members of the LLC are liable to the extent of their capital contribution. 
B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC. 
C) LLCs are not liable for any loss or injury caused by their employees. 
D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary course of business. 
A) Members of the LLC are liable to the extent of their capital contribution. 
B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC. 
C) LLCs are not liable for any loss or injury caused by their employees. 
D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary course of business.

Question 10

In a manager-managed LLC, amending the articles of organization cannot be delegated to the managers.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of an LLC formation?

Accepted Answer

A) Doctors and lawyers cannot operate practices as LLCs. 
B) An LLC has to be organized in every state that it operates. 
C) "LC" cannot be used to denote an LLC. 
D) An LLC is a creation of federal law. 
A) Doctors and lawyers cannot operate practices as LLCs. 
B) An LLC has to be organized in every state that it operates. 
C) "LC" cannot be used to denote an LLC. 
D) An LLC is a creation of federal law.

Question 12

An LLC is a(n)________.

Accepted Answer

A) unincorporated business entity 
B) incorporated business entity 
C) cooperative entity 
D) proprietorship 
A) unincorporated business entity 
B) incorporated business entity 
C) cooperative entity 
D) proprietorship

Question 13

An at-will LLC refers to an LLC that has no specified term of duration.

Accepted Answer

A) True 
 B)False

Question 14

________ is a duty owed by a member of an LLC to not act adversely to the interests of the LLC.

Accepted Answer

A) Duty of discharge 
B) Duty of restitution 
C) Duty of loyalty 
D) Duty of resolution 
A) Duty of discharge 
B) Duty of restitution 
C) Duty of loyalty 
D) Duty of resolution

Question 15

The Uniform Limited Liability Company Act is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.

Accepted Answer

A) True 
 B)False

Question 16

The income or losses of an LLC "flow through" to the members' individual income tax returns which avoids double taxation.

Accepted Answer

A) True 
 B)False

Question 17

What is a distributional interest? Explain the terms of its transfer.

Accepted Answer

A member's ownership interest in an LLC

Question 18

A(n)________ LLC has a specified term of duration.

Accepted Answer

A) short-form 
B) general 
C) term 
D) at-will 
A) short-form 
B) general 
C) term 
D) at-will

Question 19

Profits and losses from an LLC do not have to be distributed in the same proportion.

Accepted Answer

A) True 
 B)False

Question 20

Distributional interest refers to a member's ownership interest in an LLC.

Accepted Answer

A) True 
 B)False

Exam 39: Limited Liability Companies and Limited Liability Partnerships

Which of the following is true of capital contribution to an LLC?

An LLC is not liable for injury caused by the LLC member while acting within the ordinary course of business of the LLC.

Partners of LLPs are personally liable for the LLPs' debts, and obligations, and liabilities.

A(n)________ refers to an agreement entered into among members that governs the affairs and business of the LLC and the relations among members, managers, and the LLC.

An LLC can be organized in only one state.

An LLC is a ________ in the state in which it is organized.

The disassociation of a member from a term LLC before the expiration of the specified term is wrongful.

An operating agreement can be amended orally.

Which of the following is true of liabilities of LLCs?

In a manager-managed LLC, amending the articles of organization cannot be delegated to the managers.

Which of the following is true of an LLC formation?

An LLC is a(n)________.

An at-will LLC refers to an LLC that has no specified term of duration.

________ is a duty owed by a member of an LLC to not act adversely to the interests of the LLC.

The Uniform Limited Liability Company Act is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.

The income or losses of an LLC "flow through" to the members' individual income tax returns which avoids double taxation.

What is a distributional interest? Explain the terms of its transfer.

A(n)________ LLC has a specified term of duration.

Profits and losses from an LLC do not have to be distributed in the same proportion.

Distributional interest refers to a member's ownership interest in an LLC.

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial,Alternative,and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

E-Commerce and Digital Law

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banks, E-Money, and Financial Reform

Credit,Mortgages,and Debtor's Rights

Secured Transactions and E-Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Franchises and Special Forms of Businesses

Investor Protection, E-Securities, and Wall Street Reform

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants' Duties and Liability

Wills Trusts and Estates

Family Law

International and World Trade Law

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