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

Global Capital S.A. is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can

Accepted Answer

A) become a member, but cannot otherwise participate. 
B) become a member. 
C) not become a member, but can participate. 
D) not become a member or participate.

Question 3

When the member of a limited liability company engages in fraud on the firm's behalf, the member is not likely to be held personally liable.

Accepted Answer

A) True 
 B)False

Question 4

The beneficiaries of a business trust are personally liable for the trust's debts and obligations.

Accepted Answer

A) True 
 B)False

Question 5

Phone Apps LLC is forming as a limited liability company. To become a manager-managed firm, Phone Apps' members must

Accepted Answer

A) refrain from participating in the firm's operations. 
B) designate a person or group of persons to manage the firm. 
C) elect to apply the principles of partnership law to their firm. 
D) expressly adopt the corporate form of business organization.

Question 6

The operating agreement of a limited liability company cannot provide for the calculation of a buyout price on a member's dissociation because the event has not yet occurred.

Accepted Answer

A) True 
 B)False

Question 7

In some states, to form a limited liability company, a business must have

Accepted Answer

A) a registered promoter. 
B) a designated founder. 
C) at least two members. 
D) a non-member manager.

Question 8

The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm's members.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

Greenway Corporation and Happy Trails Inc. combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

Accepted Answer

A) a business trust. 
B) a joint stock company. 
C) a joint venture. 
D) a syndicate.

Question 12

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 13

A business organizational form that limits its owners' liability allows the firm to lawfully

Accepted Answer

A) act recklessly. 
B) engage in misconduct. 
C) take risks. 
D) all of the choices.

Question 14

To gain an advantage in a business deal, Masonry LLC engages in fraud. Nicole, a member of Masonry, significantly contributes to the firm's misconduct. For any resulting damages, a court is most likely to hold Nicole

Accepted Answer

A) personally absolved. 
B) personally liable. 
C) liable but only to the extent of the member's investment in the firm. 
D) liable but only to the extent of any amount that the firm cannot pay.

Question 15

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 16

Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its assets are held in the names of the members and its shareholders have personal liability. This organization is

Accepted Answer

A) a business trust. 
B) a joint stock company. 
C) a joint venture. 
D) a syndicate.

Question 17

When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Licensed fishing outfits in Bayou City form a business organization to provide, without profit, an economic service to its members. This is

Accepted Answer

A) a business trust. 
B) a cooperative. 
C) a corporation. 
D) a joint stock company.

Question 20

In a joint stock company, the shareholders are considered to be agents of one another, as the partners are in a partnership.

Accepted Answer

A) True 
 B)False

Exam 36: Limited Liability Companies and Special Business Forms

Global Capital S.A. is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can

When the member of a limited liability company engages in fraud on the firm's behalf, the member is not likely to be held personally liable.

The beneficiaries of a business trust are personally liable for the trust's debts and obligations.

Phone Apps LLC is forming as a limited liability company. To become a manager-managed firm, Phone Apps' members must

The operating agreement of a limited liability company cannot provide for the calculation of a buyout price on a member's dissociation because the event has not yet occurred.

In some states, to form a limited liability company, a business must have

The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm's members.

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

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

Greenway Corporation and Happy Trails Inc. combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

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.

A business organizational form that limits its owners' liability allows the firm to lawfully

To gain an advantage in a business deal, Masonry LLC engages in fraud. Nicole, a member of Masonry, significantly contributes to the firm's misconduct. For any resulting damages, a court is most likely to hold Nicole

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.

Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its assets are held in the names of the members and its shareholders have personal liability. This organization is

When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation.

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

Licensed fishing outfits in Bayou City form a business organization to provide, without profit, an economic service to its members. This is

In a joint stock company, the shareholders are considered to be agents of one another, as the partners are in a partnership.