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Exam 28: Limited Liability Companies and Special Business Forms

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Question 1

True/False

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Typically, the articles of organization of a limited liability company (LLC) include information on how the LLC will be managed.

A) True
B) False

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Question 2

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Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management

A) only to the extent that she assumes liability for the venture's debts.
B) only to the extent of her investment in the venture.
C) to any extent.
D) to no extent.

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

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Question 3

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GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by

In a limited liability company, the management may consist of members or nonmembers, but not both.

Normally, a member who dissociates from a limited liability company (LLC) has the right to force the LLC to dissolve.

Joint venturers do not have the authority as agents to enter into contracts for the business that will bind the joint venture.

Like the shareholders of a corporation, the owners of a limited liability company enjoy limited liability.

Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.

Most limited liability company statutes provide that if the members have not specified how the profits will be divided, they will be divided in proportion to the members' capital investment.

The alter-ego theory can be applied to a corporation but not to a limited liability company.

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

StartUp Investors, 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

In most states, a limited liability company can have only a limited number of members.

IT 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

The members of a joint venture have less implied and apparent authority than the partners in a partnership.

A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

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

Generally, a dissociated member of a limited liability company (LLC) has the right to buy his or her interest in the LLC from the other members.

For federal income tax purposes, one-member limited liability companies are not taxed.

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