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Exam 28: Limited Liability Companies and Special Business Forms

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Question 21

Multiple Choice

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Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to

A) business trusts.
B) cooperatives.
C) corporations.
D) partnerships.

E) A) and B)
F) A) and C)

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Question 22

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Dreem Land Corporation and Earthbound Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and Earthbound. This form of a business organization is​

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

E) B) and C)
F) A) and C)

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Question 23

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A limited liability company that has two or more members can be taxed as a corporation.

The members of a limited liability company have unlimited liability for any loss or injury caused by the wrongful acts or omissions of the firm.

Lauren, Marcella, and Norell form a syndicate to buy a professional soccer franchise. This syndicate could be set up as

Jeri and Knute are members of Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours’s liability, as members, Jeri and Knute are shielded from

Medical Professionals Supply Source is an unincorporated cooperative. Unincorporated cooperatives are often treated like

Arnie is a member of Bowling & Billiards, LLC. Arnie can participate in the firm's management

Limited liability companies (LLCs) are governed by federal LLC statutes.

Bee Hive Honey, LLC’s members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is

Business Media, a partnership, publishes periodicals, including Cycle Review. DangerZoners, also a partnership, publishes Extreem Sportz. Business Media and DangerZoners agree to pool their resources in a one-time deal to print and market a book, Future Runs. In contracting with Geo Cache, Inc., for supplies to print the book, Business Media commits fraud. In contracting with HostArticles Agency for materials to use in Extreem Sportz, DangerZoners commits fraud. Geo Cache and Host Articles file suits against Business Media and DangerZoners. What type of business organization has Business Media and DangerZoners formed? To whom, if anyone, is Business Media liable? To whom, if anyone, is DangerZoners liable?

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?

When a limited liability company is dissolved, any member, including those who wrongfully dissociated, may participate in the winding up process.

Limited liability companies are entities apart from their owners.

Most courts apply the same principles to joint ventures as they apply to partnerships.

Limited liability company operating agreements can provide whether formal members' meetings will be held.

A joint stock company is usually treated like a partnership.

In many states, an operating agreement is required for a limited liability company to exist.

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

A limited liability company is a citizen of every state, regardless of the citizenship of its members.