Question 1

Custom Auto, LLC, is a limited liability company. Its members include Dennis and Emma. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as

Accepted Answer

A)   ​a person.
B)   ​a corporation.
C)   ​a sole proprietorship.
D)   ​a partnership.E) None of the above
F) A) and D)

Question 2

As the trustee of a business trust, Travis is required to

Accepted Answer

A)   ​distribute the trust's profits.
B)   ​assume responsibility for the trust's debts.
C)   ​draft a written trust agreement.
D)   ​none of the choices.E) B) and C)
F) None of the above

Question 3

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to

Accepted Answer

A)   ​the extent that he assumes liability for the firm's debts.
B)   ​the extent of his investment in the firm.
C)   ​any extent.
D)   ​no extent.E) A) and B)
F) None of the above

Question 4

Like the shareholders of a corporation, the owners of a limited liability company are liable for the obligations of the firm to the full limit.

Accepted Answer

A) True 
 B)False

Question 5

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.E) A) and B)
F) B) and D)

Question 6

Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its property is 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.E) B) and D)
F) A) and B)

Question 7

A limited liability company can be taxed as a corporation.

Accepted Answer

A) True 
 B)False

Question 8

Beth and Carol want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in​

Accepted Answer

A)   ​all states.
B)   ​no state.
C)   ​less than one-fifth of the states.
D)   ​about half of the states.E) A) and D)
F) A) and C)

Question 9

Data Analytics, LLC, is a limited liability company. Unless the articles of organization specify otherwise, it will most likely be assumed that the firm is

Accepted Answer

A)   ​member-managed.
B)   ​manager-managed.
C)   ​an aggregate of member and non-member managers.
D)   ​run by an outside professional management group.E) A) and C)
F) B) and C)

Question 10

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.E) All of the above
F) A) and C)

Question 11

Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have​

Accepted Answer

A)   ​a corporate veil, but no minimum number of participants.
B)   ​at least one member.
C)   ​at least two members.
D)   ​at least one non-member manager.E) A) and B)
F) A) and C)

Question 12

ost states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Phone Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

Accepted Answer

A)   ​the applicable state LLC statute.
B)   ​the Uniform Limited Liability Company Act.
C)   ​the principles of partnership law.
D)   ​the federal LLC statutes.E) A) and B)
F) None of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Oil Reserves, Inc., and Petro Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil Reserves files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Accepted Answer

A)   ​sole proprietorships.
B)   ​limited liability companies.
C)   ​corporations.
D)   ​partnerships.E) All of the above
F) B) and C)

Question 17

A cooperative cannot be incorporated.

Accepted Answer

A) True 
 B)False

Question 18

In most states, a limited liability company must have at least two members.

Accepted Answer

A) True 
 B)False

Question 19

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint venture is usually formed for

Accepted Answer

A)   ​an implied duration of not more than six months.
B)   ​a single transaction or project.
C)   ​a stated duration of not more than one year.
D)   a perpetual existence.E) A) and B)
F) C) and D)

Question 20

Limited liability companies cannot enter into contracts or hold title to property.

Accepted Answer

A) True 
 B)False

Exam 4: Limited Liability Companies and Special Business Forms

In most states, a limited liability company must have at least two members.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint venture is usually formed for

Correct AnswerverifiedShow Answer

Oil Reserves, Inc., and Petro Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil Reserves files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Correct AnswerverifiedShow Answer

Beth and Carol want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Custom Auto, LLC, is a limited liability company. Its members include Dennis and Emma. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as

Correct AnswerverifiedShow Answer

A limited liability company can be taxed as a corporation.

Correct AnswerverifiedShow Answer

Phone Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

Correct AnswerverifiedShow Answer

A cooperative cannot be incorporated.

Correct AnswerverifiedShow Answer

Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have​

Correct AnswerverifiedShow Answer

Limited liability companies cannot enter into contracts or hold title to property.

Correct AnswerverifiedShow Answer

As the trustee of a business trust, Travis is required to

Correct AnswerverifiedShow Answer

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Like the shareholders of a corporation, the owners of a limited liability company are liable for the obligations of the firm to the full limit.

Correct AnswerverifiedShow Answer

Data Analytics, LLC, is a limited liability company. Unless the articles of organization specify otherwise, it will most likely be assumed that the firm is

Correct AnswerverifiedShow Answer

ost states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.

Correct AnswerverifiedShow Answer

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Beth and Carol want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in

Correct Answer
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Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have

Correct Answer
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Correct Answer
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Correct Answer
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