Question 1

Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency

Accepted Answer

A)   articles of certification.
B)   articles of formation.
C)   articles of organization.
D)   no specific documents. C

Question 2

Farm2Fork, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as

Accepted Answer

A)   a corporation.
B)   a partnership.
C)   a sole proprietorship.
D)   a business trust. A

Question 3

Location! Realty LLC is a limited liability company. 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. B

Question 4

Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Jumpstart is formed in a state that imposes fiduciary duties on LLC managers. Kirby owes these duties to

Accepted Answer

A)   Jumpstart's members.
B)   Jumpstart's suppliers.
C)   Jumpstart's customers.
D)   none of the choices.

Question 5

A joint stock company is a hybrid of a partnership and a corporation.

Accepted Answer

A) True 
 B)False

Question 6

A cooperative must be incorporated.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A syndicate may exist in the form of a partnership but not a corporation.

Accepted Answer

A) True 
 B)False

Question 9

A limited liability company can sue or be sued, enter into contracts, and hold title to property.

Accepted Answer

A) True 
 B)False

Question 10

A joint venture resembles a partnership but is taxed like a corporation.

Accepted Answer

A) True 
 B)False

Question 11

Foreign investors are not allowed to become limited liability company members.

Accepted Answer

A) True 
 B)False

Question 12

A limited liability company can be taxed as a partnership.

Accepted Answer

A) True 
 B)False

Question 13

If there is no limited liability company (LLC) agreement covering a topic under dispute, the state LLC statute will govern the outcome.

Accepted Answer

A) True 
 B)False

Question 14

Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management

Accepted Answer

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

Question 15

Coco is considering forms of business organization for her concessions business-Coco's Cupcakes. Most states require that a limited liability company have at least

Accepted Answer

A)   no minimum number of members.
B)   at least one member.
C)   at least two members.
D)   at least three members, including at least one general partner.

Question 16

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

Accepted Answer

A)   distributed according to the members' proportionate shares of ownership in the firm.
B)   divided equally among the members.
C)   forfeited to the state.
D)   reinvested in the business until the dispute is resolved.

Question 17

Chocolate Sundry LLC's members and managers are Devlin, Effie, and Flavia. After Devlin's relationship to the firm ends, Effie and Flavia agree to discontinue the business. This is

Accepted Answer

A)   illegal.
B)   optional.
C)   required.
D)   wrongful.

Question 18

Homer's Remodeling, LLC, is a limited liability company. Among the members, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of

Accepted Answer

A)   corporate law.
B)   partnership law.
C)   sole proprietorship law.
D)   joint venture law.

Question 19

National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by

Accepted Answer

A)   partnership certificates.
B)   shares of stock.
C)   title documents.
D)   trust certificates.

Question 20

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

Accepted Answer

A)   an aggregate of Chad and the other members.
B)   a natural person in the members' "family."
C)   a legal entity apart from the owners.
D)   a non-participating third party.

Exam 28: Limited Liability Companies Special Business Forms

Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency

Farm2Fork, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as

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

Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Jumpstart is formed in a state that imposes fiduciary duties on LLC managers. Kirby owes these duties to

A joint stock company is a hybrid of a partnership and a corporation.

A cooperative must be incorporated.

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

A syndicate may exist in the form of a partnership but not a corporation.

A limited liability company can sue or be sued, enter into contracts, and hold title to property.

A joint venture resembles a partnership but is taxed like a corporation.

Foreign investors are not allowed to become limited liability company members.

A limited liability company can be taxed as a partnership.

If there is no limited liability company (LLC) agreement covering a topic under dispute, the state LLC statute will govern the outcome.

Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management

Coco is considering forms of business organization for her concessions business-Coco's Cupcakes. Most states require that a limited liability company have at least

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

Chocolate Sundry LLC's members and managers are Devlin, Effie, and Flavia. After Devlin's relationship to the firm ends, Effie and Flavia agree to discontinue the business. This is

Homer's Remodeling, LLC, is a limited liability company. Among the members, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of

National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by

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