Chapter 3 Flashcards
A limited liability company (LLC) combines the tax characteristics of:
a. a corporation with the liability of a partnership.
b. a corporation with the liability of shareholders.
c. a partnership with the liability of partners.
d. a partnership with the liability a corporation. (Answer is D)
The term used to designate a person who has an ownership interest in a LLC
Member(S)
The document filed with a designated state official by which a LLC is formed
Articles of Incorporation
A hybrid form of business enterprise that offers the limited liability of the corporation but the tax benefit of a partnership
LLC
The Uniform Limited Liability Company Act (ULLCA) has now been adopted by almost all of the states.
False
One of the great benefits of LLCs, and one that helps promote investment, is the fact that:
Foreign investors are allowed to become LLC members
In an LLC, a member is someone who:
has an ownership interest in an LLC & limited liability for LLC debts
When a group of members joint to form an LLC, the name of the organization must:
include the words “ limited liability company” or the letters LLC
LLCs are legal entitles apart from their owners and as such can sue or be sued, enter into contracts, and hold title to property.
True
Which of the following is NOT typically a part of the contents of an LLC’s articles of organization filed with the central state agency?
The hours of operation of the business
Marsden wants to start a new company with different partners to explore oil-drilling opportunities in several states. When discussing the LLC form, Marsden’s attorney mentions that one of the biggest disadvantages of the LLC form is that:
there is nor uniform law governing LLC’s in the U.S.
two options for management of an LLC.
- Member managed
2. Manager Managed
Xavier consults with his attorney about the management of his LLC. He has chosen the manager-managed LLC form of management in which:
the managers may be members, nonmembers, or a combination of both
Typically, managers in a manager-managed LLC owe fiduciary duties to the
LLC & its members
Generally, a dissociated member has no right to force the LLC to dissolve
True
Upon the dissolution of the LLC, which member may participate in the winding up process?
Any members who did not wrongfully dissociate.
Upon dissolution of an LLC, all assets must be sold immediately.
False
An organizartion created by 2 or more persons in contemplation of a limtited activity or a single transaction: simliar to a partnership in many respects
Joint Venture
An investment group that undertakes to finance a particular project; may be organized as a corporation or as a general of limitied partnership
Syndicate
A business form similiar to a corporation in some respects( transferable shares of stock, mgmt by directors and officers , perpetual existence) but otherwise resmebling a partnership
Joint stock company
A business form created by a written trust agreement that sets forth the interests of the beneficaries & the obligations and powers of the trustee(s)
Business trust
An association organized to provide an economic service, without profit, to its memebers. A cooperative can take the form of a corporation or a partnership
Co-Operative
A major difference between a joint venture and a partnership is that:
a joint venture is a one-time association, whereas a partnership is ongoing.
A joint venture is a true cross between a partnership and a corporation.
False
A joint stock company has many features of a corporation. Which of the following is NOT one of the ways in which a joint stock company is like a corporation?
Its shareholders have personal liability.
