Question 1

Commerce & Trade Corporation and Distance Shipping & Transport, Inc., form a business trust. eCharge Auto Company and Fleet Electric Corporation form a joint stock company. Green AgriCorp and Harvest Farms, Inc., form an incorporated cooperative. What features do these combinations of business organization have in common?

Accepted Answer

The answer of Commerce & Trade Corporation and Distance Shipping...

Question 2

Unlike a sole proprietorship or a partnership, a limited liability company cannot be held liable for a loss caused by the wrongful acts of its members.

Accepted Answer

A) True 
 B)False

Question 3

Like a sole proprietorship or a partnership, the members of a limited liability company have unlimited liability for the firm's debts.

Accepted Answer

A) True 
 B)False

Question 4

Rocket Corporation and Star Inc. wish to combine their capabilities to launch a single flight to the moon. 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.

Question 5

A syndicate may be organized as a corporation or a partnership, or in some situations as no recognizable form of business organization.

Accepted Answer

A) True 
 B)False

Question 6

An operating agreement is required for a limited liability company to exist, and it must be in writing.

Accepted Answer

A) True 
 B)False

Question 7

Leon, Michael, Nolan, and O'Neill join together 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.

Question 8

Start-Up LLC is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Accepted Answer

A)  distributed according to members' proportionate ownership in the firm. 
B)  divided equally among the members. 
C)  forfeited to the state. 
D)  reinvested in the business until the dispute is resolved.

Question 9

Like partners, unless otherwise agreed, joint venturers have an equal voice in controlling a venture-related project.

Accepted Answer

A) True 
 B)False

Question 10

A limited liability company is a citizen only of the state in which it was formed.

Accepted Answer

A) True 
 B)False

Question 11

Data Analytics LLC is a limited liability company. Unless the firm's articles of organization specify otherwise, it will most likely be assumed that the firm is

Accepted Answer

A)  member-managed. 
B)  manager-managed. 
C)  an aggregate of member and non-member managers. 
D)  run by an outside professional management group.

Question 12

Orly's Adventure Travel and Paquito's Wild River Tours form a joint venture. Orly can participate in the venture's management to

Accepted Answer

A)  the extent that she assumes liability for the venture's debts. 
B)  the extent of her investment in the venture. 
C)  any extent. 
D)  no extent.

Question 13

If a member of a limited liability company dissociates from the firm in violation of the operating agreement, the member can be held liable for any loss to the business resulting from the withdrawal.

Accepted Answer

A) True 
 B)False

Question 14

In a state in which the managers of a limited liability company owe fiduciary duties to the firm and its members, those members can sue the managers for breaching a fiduciary duty.

Accepted Answer

A) True 
 B)False

Question 15

Like other limited liability companies, for federal jurisdictional purposes, Rodeo Productions LLC is most likely a citizen of

Accepted Answer

A)  all states in the United States. 
B)  every state of which its members are citizens. 
C)  any state in which it does business. 
D)  no state-an LLC is not a "citizen."

Question 16

When a limited liability company is dissolved, the members may preserve the assets for a reasonable time to optimize their return during the winding up process.

Accepted Answer

A) True 
 B)False

Question 17

Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation

Accepted Answer

A)  the member's duty of care continues with respect to prior events. 
B)  the member's duty of loyalty continues until the firm dissolves. 
C)  the member does not lose the right to participate in management. 
D)  the member does not lose the right to act as an agent for the firm.

Question 18

If the members of a limited liability company want to reinvest profits in the business, they may opt for the firm to be taxed as a corporation.

Accepted Answer

A) True 
 B)False

Question 19

When the promoter of a limited liability company enters into a preformation contract on the firm's behalf, the company must adopt the contract to enforce it.

Accepted Answer

A) True 
 B)False

Question 20

Because title to the property of a limited liability company must be held in the name of one or more of its members, disputes over its ownership is avoided.

Accepted Answer

A) True 
 B)False

Exam 32: Limited Liability Companies and Special Business Forms

Unlike a sole proprietorship or a partnership, a limited liability company cannot be held liable for a loss caused by the wrongful acts of its members.

Like a sole proprietorship or a partnership, the members of a limited liability company have unlimited liability for the firm's debts.

Rocket Corporation and Star Inc. wish to combine their capabilities to launch a single flight to the moon. The appropriate legal entity for this project is most likely

A syndicate may be organized as a corporation or a partnership, or in some situations as no recognizable form of business organization.

An operating agreement is required for a limited liability company to exist, and it must be in writing.

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

Start-Up LLC is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Like partners, unless otherwise agreed, joint venturers have an equal voice in controlling a venture-related project.

A limited liability company is a citizen only of the state in which it was formed.

Data Analytics LLC is a limited liability company. Unless the firm's articles of organization specify otherwise, it will most likely be assumed that the firm is

Orly's Adventure Travel and Paquito's Wild River Tours form a joint venture. Orly can participate in the venture's management to

If a member of a limited liability company dissociates from the firm in violation of the operating agreement, the member can be held liable for any loss to the business resulting from the withdrawal.

In a state in which the managers of a limited liability company owe fiduciary duties to the firm and its members, those members can sue the managers for breaching a fiduciary duty.

Like other limited liability companies, for federal jurisdictional purposes, Rodeo Productions LLC is most likely a citizen of

When a limited liability company is dissolved, the members may preserve the assets for a reasonable time to optimize their return during the winding up process.

Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation

If the members of a limited liability company want to reinvest profits in the business, they may opt for the firm to be taxed as a corporation.

When the promoter of a limited liability company enters into a preformation contract on the firm's behalf, the company must adopt the contract to enforce it.

Because title to the property of a limited liability company must be held in the name of one or more of its members, disputes over its ownership is avoided.