Question 1

A nonmanager member of a(n)________ LLC is treated equally to a shareholder in a corporation.

Accepted Answer

The answer of A nonmanager member of a(n)________ LLC is...

Question 2

Which of the following is true of a franchise?

Accepted Answer

A) The franchisor and franchisee are established as separate legal entities. 
B) A franchisee does not need a license to use the franchisor's trademark. 
C) The franchisee does not have access to the franchisor's knowledge. 
D) A franchise is considered a joint venture.

Question 3

A company operating its business as a(n)________ cannot have more than 100 shareholders.

Accepted Answer

The answer of A company operating its business as a(n)________...

Question 4

A limited liability partnership has no general partner.

Accepted Answer

A) True 
 B)False

Question 5

A(n)________ refers to a document that evidences a member's ownership interest in an LLC.

Accepted Answer

A) certificate of interest 
B) distributional interest 
C) operating agreement 
D) agreement of conversion

Question 6

The party who grants a license is known as the ________.

Accepted Answer

A) licensee 
B) licensor 
C) grantee 
D) grantor

Question 7

The party to whom a license is granted is known as the ________.

Accepted Answer

A) licensee 
B) licensor 
C) grantee 
D) grantor

Question 8

Which of the following methods is used to appoint a manager of a manager-managed LLC?

Accepted Answer

A) appointment by the secretary of state 
B) majority vote of the members 
C) unanimous vote of members 
D) unanimous vote of shareholders

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In a(n)________ LLC,each member has equal rights in the management of the business of the LLC,regardless of the size of his or her capital contribution.

Accepted Answer

The answer of In a(n)________ LLC,each member has equal rights...

Question 11

A ________ is a person who intentionally or unintentionally causes injury or death to another person.

Accepted Answer

A) protagonist 
B) supplanter 
C) reversionist 
D) tortfeasor

Question 12

An LLC organized in the United States is considered a domestic LLC throughout the United States.

Accepted Answer

A) True 
 B)False

Question 13

A person who intentionally or unintentionally (negligently)causes injury or death to another person is called a(n)________.

Accepted Answer

The answer of A person who intentionally or unintentionally (negligently)causes...

Question 14

In states where an LLC may be organized by only one member,________ can obtain the benefit of the limited liability shield of an LLC.

Accepted Answer

A) corporations 
B) sole proprietors 
C) LLPs 
D) general partnerships

Question 15

Which of the following is true of LLC taxation?

Accepted Answer

A) An LLC is taxed as a corporation in all general cases. 
B) Income or losses of an LLC do not flow through to the members' individual income tax returns. 
C) Members of an LLC are subject to double taxation. 
D) An LLC is not taxed at the entity level.

Question 16

Limited liability companies are created by federal law.

Accepted Answer

A) True 
 B)False

Question 17

An LLC is taxed at the entity level.

Accepted Answer

A) True 
 B)False

Question 18

In an area franchise,the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor.The area franchisee is called a(n)________.

Accepted Answer

The answer of In an area franchise,the franchisor authorizes the...

Question 19

A limited liability company cannot be abbreviated as LC.

Accepted Answer

A) True 
 B)False

Question 20

Unless otherwise stated,the franchisor is liable for the torts of its franchisee.

Accepted Answer

A) True 
 B)False

Exam 15: Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

A nonmanager member of a(n)________ LLC is treated equally to a shareholder in a corporation.

Which of the following is true of a franchise?

A company operating its business as a(n)________ cannot have more than 100 shareholders.

A limited liability partnership has no general partner.

A(n) ________ refers to a document that evidences a member's ownership interest in an LLC.

The party who grants a license is known as the ________.

The party to whom a license is granted is known as the ________.

Which of the following methods is used to appoint a manager of a manager-managed LLC?

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

In a(n)________ LLC,each member has equal rights in the management of the business of the LLC,regardless of the size of his or her capital contribution.

A ________ is a person who intentionally or unintentionally causes injury or death to another person.

An LLC organized in the United States is considered a domestic LLC throughout the United States.

A person who intentionally or unintentionally (negligently)causes injury or death to another person is called a(n)________.

In states where an LLC may be organized by only one member,________ can obtain the benefit of the limited liability shield of an LLC.

Which of the following is true of LLC taxation?

Limited liability companies are created by federal law.

An LLC is taxed at the entity level.

In an area franchise,the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor.The area franchisee is called a(n)________.

A limited liability company cannot be abbreviated as LC.

Unless otherwise stated,the franchisor is liable for the torts of its franchisee.