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Exam 17: Limited Liability Business Forms

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Question 1

Multiple Choice

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In most situations, with respect to a limited liability company's debts, the firm's members are shielded from

A) all personal liability.
B) no personal liability.
C) the loss of their capital investment in the firm.
D) liability for conduct that leads to a piercing of the "corporate veil."

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

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Question 2

Multiple Choice

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Jess, Kia, and Len form a partnership to design and test energy storage facilities and equipment. The liability of all partners is limited to the amount of their investments in the firm. This entity is most likely

A) a limited liability partnership.
B) a family limited liability partnership.
C) none of the choices.
D) a limited liability limited partnership.

E) None of the above
F) All of the above

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Question 3

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Mero, Nico, and Osaka want to form Pharma Sales LLC (limited liability company). What should they provide in their operating agreement? If they fail to include some important operating details, what determines these details?

Global Capital S.A. is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can

Among the states, the law governing limited liability companies is far from uniform because

Hera, her daughter Inez, and other members of their family wish to operate their family-owned farm as a business organization with pass-through tax status, limits to the personal liability of the participants, and the option to transfer real estate among those parties exempt from real estate taxes. The appropriate business organization for this enterprise is most likely

To form a limited liability company, articles of organization must be filed with an attorney's office.

Phone Apps LLC is forming as a limited liability company. To become a manager-managed firm, Phone Apps' members must

In some states, limited partners cannot withdraw from a limited partnership.

Like other limited liability companies, for federal jurisdictional purposes, Rodeo Productions LLC is most likely a citizen of

When the member of a limited liability company engages in fraud on the firm's behalf, the member is not likely to be held personally liable.

If a member of a limited liability company dissociates from the firm, the other members can continue the firm's business, and the dissociated member can continue to act as an agent for the firm.

Jana and Kwan are partners in Lawyers LLP, a limited liability partnership. Jana supervises the firm's associate Milo, who negligently fails to appear in court on behalf of Norm, a client. Liability to Norm rests only with

Maia, a limited partner in Nano Investors, consults with Odet, the firm's general partner, regarding partnership business. For this activity, Maia is

Start-Up 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

Fern and Grover wish to combine their professional accountancy practices into a single firm that combines the pass-through tax status and other advantages of a partnership with limits to the personal liability of the partners. The appropriate business organization for this enterprise is most likely

Because the basic formational structure is the same, it can be relatively easy to convert a general partnership into a limited liability partnership.

A limited liability company that operates in more than one state may not receive consistent treatment. This is because, according to the principle that in most states determines the law that applies to a foreign limited liability company, one state's courts must

Like a partner in a partnership, the member of a limited liability company has the power to dissociate from the firm at any time, but may not have the right.

Del and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Del and Efron