Question 1

A limited liability company can be taxed as a partnership.

Accepted Answer

A) True 
 B)False  True

Question 2

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

Accepted Answer

A) no law. 
B) the federal Uniform LLC Law. 
C) the principles of partnership law. 
D) the state corporation statute. 
A) no law. 
B) the federal Uniform LLC Law. 
C) the principles of partnership law. 
D) the state corporation statute. C

Question 3

CPA Accounting,LLC,is a limited liability company.If the law in CPA's state is like the law in most states,unless the members have agreed otherwise,participants in the firm's management will be considered to include

Accepted Answer

A) all members. 
B) no member. 
C) one member. 
D) two members,including at least one general partner. 
A) all members. 
B) no member. 
C) one member. 
D) two members,including at least one general partner. A

Question 4

Fact Pattern 23-2 
Luann and Mace are partners in Networx, a computer peripherals firm.
-Refer to Fact Pattern 23-2.Mace dissociates from Networx.Luann signs a contract with Physik Drives,a wholesale component supplier,apparently on Networx's behalf.Physik does not know of Mace's dissociation.The contract is binding on

Accepted Answer

A) Luann,Mace,and Networx. 
B) Luann only. 
C) Networx only. 
D) Physik only. 
A) Luann,Mace,and Networx. 
B) Luann only. 
C) Networx only. 
D) Physik only.

Question 5

Location! Realty LLC is a limited liability company (LLC).Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Accepted Answer

A) all states. 
B) every state in which its members are citizens. 
C) no state. 
D) only the state in which it was formed. 
A) all states. 
B) every state in which its members are citizens. 
C) no state. 
D) only the state in which it was formed.

Question 6

QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as

Accepted Answer

A) a corporation. 
B) a natural person. 
C) a partnership. 
D) a sole proprietorship. 
A) a corporation. 
B) a natural person. 
C) a partnership. 
D) a sole proprietorship.

Question 7

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Accepted Answer

A) True 
 B)False

Question 8

A partner owes to the partnership and the other partners a duty of loyalty.

Accepted Answer

A) True 
 B)False

Question 9

Jody owns KuppaJoe Kiosks,a sole proprietorship.Jody's liability is

Accepted Answer

A) limited by state statute and varies from state to state. 
B) limited to the extent of her capital expenditures. 
C) limited to the extent of her original investment. 
D) unlimited. 
A) limited by state statute and varies from state to state. 
B) limited to the extent of her capital expenditures. 
C) limited to the extent of her original investment. 
D) unlimited.

Question 10

A limited liability company must be managed by non-member managers.

Accepted Answer

A) True 
 B)False

Question 11

In raising capital,a sole proprietor is limited to his or her personal funds-a personal loan is not possible.

Accepted Answer

A) True 
 B)False

Question 12

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Accepted Answer

A) True 
 B)False

Question 13

Kelly,the owner of Llama Farms,a sole proprietorship,wants to obtain additional business capital but to maintain control.This can best be accomplished by

Accepted Answer

A) borrowing funds. 
B) bringing in partners. 
C) issuing stock. 
D) selling the business. 
A) borrowing funds. 
B) bringing in partners. 
C) issuing stock. 
D) selling the business.

Question 14

Greta is a member of Hovercraft LLC.As a member,Greta is

Accepted Answer

A) a manager or officer,but not an owner. 
B) an investor,but not a manager,officer,or owner. 
C) an owner. 
D) a participant,but not an investor,manager,officer,or owner. 
A) a manager or officer,but not an owner. 
B) an investor,but not a manager,officer,or owner. 
C) an owner. 
D) a participant,but not an investor,manager,officer,or owner.

Question 15

Felipe is a member of Great States Transport LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is

Accepted Answer

A) dissociation. 
B) dissolution. 
C) winding up. 
D) wrongful. 
A) dissociation. 
B) dissolution. 
C) winding up. 
D) wrongful.

Question 16

For federal income tax purposes,one-member limited liability companies are automatically taxed as sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 17

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property,which fall under the Statute of Frauds.Their partnership agreement is legally binding

Accepted Answer

A) only if a copy of the agreement is filed in the appropriate state office. 
B) only if the agreement is reduced to writing. 
C) only if an information return is filed with the Internal Revenue Service. 
D) without more. 
A) only if a copy of the agreement is filed in the appropriate state office. 
B) only if the agreement is reduced to writing. 
C) only if an information return is filed with the Internal Revenue Service. 
D) without more.

Question 18

An association cannot be a partnership without an express agreement.

Accepted Answer

A) True 
 B)False

Question 19

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Accepted Answer

A) True 
 B)False

Question 20

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Accepted Answer

A) capital contributions. 
B) participation in management. 
C) the number of members. 
D) transactions with the firm. 
A) capital contributions. 
B) participation in management. 
C) the number of members. 
D) transactions with the firm.

Exam 23: Sole Proprietorships, partnerships, Limited Liability Co

A limited liability company can be taxed as a partnership.

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

CPA Accounting,LLC,is a limited liability company.If the law in CPA's state is like the law in most states,unless the members have agreed otherwise,participants in the firm's management will be considered to include

Location! Realty LLC is a limited liability company (LLC).Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

A partner owes to the partnership and the other partners a duty of loyalty.

Jody owns KuppaJoe Kiosks,a sole proprietorship.Jody's liability is

A limited liability company must be managed by non-member managers.

In raising capital,a sole proprietor is limited to his or her personal funds-a personal loan is not possible.

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Kelly,the owner of Llama Farms,a sole proprietorship,wants to obtain additional business capital but to maintain control.This can best be accomplished by

Greta is a member of Hovercraft LLC.As a member,Greta is

Felipe is a member of Great States Transport LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is

For federal income tax purposes,one-member limited liability companies are automatically taxed as sole proprietorships.

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property,which fall under the Statute of Frauds.Their partnership agreement is legally binding

An association cannot be a partnership without an express agreement.

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

The Legal and Constitutional Environment of Business

Traditional and Online Dispute Resolution

Ethics and Business Decision Making

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Classification

Agreement in Traditional and E-Contracts

Consideration,capacity,and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach and Remedies

The Formation of Sales and Lease Contracts

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

Negotiability,transferability,and Liability

Checks and Banking in the Digital Age

Security Interests in Personal Property

Creditors Rights and Bankruptcy

Mortgages Foreclosures After the Recession

Agency Relationships

Management Perspective: Independent-Contractor Negligence

Employment, immigration, and Labor Law

Corporate Formation, financing, and Termination

Corporate Directors, officers, Shareholders

Investor Protection, insider Trading, Corp Gov

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance, wills, and Trusts

Liability of Accountants Other Professionals

International Law in a Global Economy

Adapting the Law to the Online Environment: The Supreme Court Upholds a Law That Prohibits Pandering Virtual Child Pornography

Adapting the Law to the Online Environment: Should the Law Continue to Allow Business Process Patents

Management Perspective: E-Mailed Credit-Card Receipts

Case Study With Dissenting Opinion: Prestridge V Bank of Jena

Adapting the Law to the Online Environment: The Thorny Issue of Taxing Internet Sales

Adapting the Law to the Online Environment: The Debt That Never Goes Awayits Discharged in Bankruptcy but Still on the Debtors Credit Report

Adapting the Law to the Online Environment: Economic Recession Fuels the Amazon Tax Debate

Case Study With Dissenting Opinion: Kovarik V Kovarik

Unit Case Study With Dissenting Opinion: Dole Food Co V Patrickson

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