Chapter 38: LLC's & Business forms

Question 1

Articles of organization

Answer 1

must be filed to form an LLC

Question 2

Whats in the articles of organization

Answer 2

1. name of business
2. business address
3. name of agent/members
4. how LLC will be managed

Question 3

Advantages of LLC

Answer 3

1. Can be taxed as partnership or corporation
2. Limited liability

Question 4

Management options for LLC

Answer 4

1. Manager managed
2. Member managed

Question 5

LLC v LP similarities

Answer 5

1. Organizers are given flexibility to define rights of partners and structuring
2. Not subject to federal income tax

Question 6

LLC v LP differences

Answer 6

1. LP has general and limited partners.
2. LLC can have unlimited members

Question 7

General v Limited partner

Answer 7

General: unlimited personal liability for LP debts
Limited: No personal liability. Can only invest in business, cannot be active in it.

Question 8

LLC v LLP

Answer 8

1. Same liability protections as LLC
2. LLP must be managed by a partner
3. LLP may be limited to accountants, attorneys, etc.

Question 9

Joint venture

Answer 9

Combination of two business entities for a single project or related series of projects. Sometimes two parties just set up a new entity for the transaction.

Question 10

Syndicate

Answer 10

Temporary alliance of businesses that join together to manage/finance a large transaction that would be impossible by themselves.

Question 11

Joint stock companies

Answer 11

Combines corporation and partnership. Taxed as partnership.

Question 12

Joint stock companies characteristics of corporation

Answer 12

1. Ownership is in shares
2. managed by directors/officers
3. perpetual existence

Question 13

Joint stock companies characteristics of partnership

Answer 13

1. formed by agreement
2. property held in names of owners, have personal liability

Question 14

Cooperatives

Answer 14

An association, may or may not be incorporated, provide economic services to its members