Exam 39: Limited Liability Companies and Limited Liability Partnerships

Members may draft an agreement whereby the profits of an LLC are not to be shared equally.

Accountants,lawyers,and doctors are among the professionals allowed to create a limited liability partnership.

Which of the following is true about selection of a name under which to operate an LLC?

Which of the following is true about operating agreements for LLCs?

An LLC may own and transfer personal property.

Which of the following is not true about limited liability companies under the Uniform Limited Liability Company Act?

Maria is one of six members of a limited liability company.This is a manager-managed LLC,with two of the members named as managers.Maria and Vanessa,one of the managers,executed a personal guarantee (both their names on one guarantee)for a bank loan to the LLC.Although the LLC was successful for a couple of years,its debts now greatly exceed its assets and the members are considering liquidation.Discuss Maria's liability.

Thelma and Louise form an LLC for the purpose of operating road trip tours of the American southwest.In the articles of organization,they state,"the term of this limited liability company shall last until our travel company has operated 20 successful tours,at which point the term of this company shall end." Thelma and Louise have formed:

Which of the following is a reason to form a limited liability company rather than an S corporation?

After disassociating from an LLC,a member retains apparent authority to bind the LLC:

Where a disassociating member of an LLC is entitled to payment for her interest,she is entitled to fair market value even if the operating agreement provides otherwise.

Members who are not managers of a manager-managed LLC still have rights to manage the LLC regardless of the operating agreement.

Mary was an architect and was one of four members who joined an LLC that was going to develop a large new residential subdivision over the next several years.Mary agreed that as part of her contribution of capital she would contribute $100,000 and would provide 300 hours of time working on the architectural design of homes to be built by the LLC.Unfortunately,as Mary was out enjoying a walk one day,a driver in a sport utility vehicle was talking on a cell phone and struck Mary,killing her.When she was killed,Mary had paid $60,000 of her cash contribution and had already provided 240 hours of the design services.In these circumstances:

If a member disassociates him or herself from an at-will LLC,the LLC must only purchase the disassociating member's distributional interest on the expiration of the specified term of the LLC.

When choosing the form of business organization that a business will use,what additional factors should be considered if the business will be doing substantial business with entities in other nations?

Lynda is a member of a manager-managed LLC but is not a manager.However,Lynda has considerable expertise in the business of the LLC.Lynda assisted the managers for the first couple of years of the LLC's existence without any difficulties.During the third year,Lynda began to challenge some of the decisions made by the managers who had begun to shut Lynda out of most decisions.Lynda demands that as a member of the LLC she be allowed to participate in its management and that she be compensated for the services she is providing.In this case:

The authority for the formation of LLCs comes from:

Dan,Fran,and Stan want to establish and operate a mountain bike sales and rental shop.Dan and Fran will be actively involved in the management of the business,but Stan is investing most of the money.The three of them do not want to form a corporation,but want to use a form of business,if possible,that will give limited liability to each of them.Which of the following is true?

Which of the following is not required to be set forth in an LLC's articles of organization?

Non-manager members in a manager-managed LLC can bind the LLC to contracts.