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80 Cards in this Set

  • Front
  • Back
For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.
true
A limited liability company cannot be taxed as a corporation
false
A limited liability company offers the limited liability of a corporation
true
State law governs the operation of a limited liability company
true
State law governs the formation of limited liability companies
true
A limited liability company is a legal entity apart from its owners.
true
A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States.
false
The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status
false
Most states require a limited liability company to have at least two members.
false
For overt hypothyroidism, what is effective in addition to levothyroixine?
Liothyronine
A limited liability company is a citizen of every state of which its members are citizens.
true
The death of a general partner can terminate a limited partnership.
true
For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.
true
For federal jurisdictional purposes, a limited liability company is treated like a corporation.
false
A limited liability company must have an operating agreement
false
An operating agreement is required to form a limited liability company
false
Most limited liability company statutes provide that unless the members agree otherwise, all profits are divided equally.
true
Most limited liability company statutes have strict provisions regu¬lating members’ meetings.
false
In a limited liability company, members must participate in the manage-ment of the company
false
In a limited liability company, members do not have to participate in its manage¬ment.
true
In a limited liability company, members cannot participate in its management.
false
The dissociation of a mem¬ber of a limited liability company in violation of the operating agreement is legally wrongful.
true
In a limited liability partnership, a partner can be exempt from personal liability for partnership obligations
true
State law governs the formation of a limited liability partnership
true
With a few exceptions, all of the rules that govern partnerships apply to limited liability partnerships
true
In a family limited liability partnership, only persons related to each other may be partners.
false
A limited liability partnership can be formed in virtually any state.
true
In a family limited liability partnership, only persons related to each other can be limited partners.
false
In a limited partnership, the liability of a general partner is unlimited.
true
The maximum amount of money at risk by a limited partner is the amount of his or her investment in the limited partnership.
true
In a limited partnership, the liability of a limited partner is limited to the amount of capital he or she has invested in the partnership.
true
In a limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership
false
Only a limited partnership’s limited partners have a fiduciary obligation to the other partners.
false
A limited partner who participates in the management of the partner¬ship may be personally liable to the firm’s creditors.
true
A limited partner who gives a general partner ad¬vice on matters relating to the management of the partnership cannot be liable as a general partner.
false
The death of a limited partner dissolves a limited partnership
false
A general partner has the power to dissociate from a limited partnership regardless of what the partnership agreement specifies.
false
In winding up a limited partnership, non-partner creditors are paid be¬fore the partners receive their capital contributions
true
In a limited liability limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership.
true
In a limited liability limited partnership, the liability of a general part¬ner is the same as the liability of a limited partner.
true
QuikBooks LLC is a limited liability company. Like any other LLC, unless QuikBooks chooses otherwise, the firm will be taxed as
a partnership
Bookkeepers, LLC, is a limited liability company. Unless indi¬cated otherwise on Bookkeepers’s federal tax form, the firm will be taxed as
a partnership
Denny and Erv want to form a limited liability company (LLC) to manage their Web business, Filmz Online. LLC statutes have been adopted in
all states
Energy Resources, LLC, is a limited liability company. Rather than dis-tribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as
A corporation
Bee Hive Honey, LLC’s members include Chad. For purposes of suing and being sued, Bee Hive Honey is
a legal entity apart from the owners
Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay’s liability for Garden Groves’s obligations resembles the liability of
a shareholder of a corporation.
Greta is a member of Hovercraft LLC. As a member, Greta is
an owner
High Pointe LLC’s members include Irvin. For purposes of holding title to property, High Pointe is
a legal entity apart from the owners
Bluto is considering forms of business organization for Consult Me!, his Web site consult¬ing firm. Most states require that a limited liability com-pany have at least
one member
China Bank is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to an LLC in the United States, China Bank can
become a member
Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of
every state in which its members are citizens
Dan is considering forms of business organization for his financial advisory firm. Like most states, Dan’s state requires that to form a limited liabil¬ity company, he must file with a central state agency
articles of organization
Vijay is a member of Watchit, LLC, a limited liability company. Vijay is li-able for Watchit’s debts
to the extent of his capital contribution
Serious Gamers, LLC, is a limited liability company. Among the mem¬bers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of
partnership law
B2B, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is gov¬erned by
the applicable state LLC statute.
Mit-E Mart LLC was formed in New Jersey. Mit-E Mart’s members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of
New Jersey and New York.
Lui is considering forms of business organization for a chain of Magic Trix novelty stores. One advantage of the limited liability company form, with respect to tax options, is its
flexibility
Kris is a member of Laboratory Services, LLC, a limited liability company. Kris can participate in the firm’s management
to any extent
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 other-wise, participants in the firm’s management will be considered to include
all members
Cookie Kiosk LLC’s members and managers are Dwight, Emma, and Fawn. After Dwight’s relationship to Cookie Kiosk ends, Emma and Fawn agree to discontinue the firm’s business. This is most likely
optional
Waste Management Services, LLC, is a member-managed limited liability company. If the law in Waste’s state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned accord¬ing to
capital contributions
Gallop Western Ranch is a family limited liability partnership (FLLP). In an FLLP, all of the partners must be
natural persons or persons acting as fiduciaries for natural persons
Flip is a member of Great States Trucking LLC. Flip’s relationship to Great States ends, but the firm continues to do business. This is
dissociation.
Biotech Investments, LP, is a limited partnership. The partners sign an agreement purporting to state how the firm’s profits and losses are to be di-vided. The profits and losses of the firm will be divided
according to the agreement
Daisy is considering forms of business organization for Daisy’s Designs, an ar¬chitectural firm. An advantage of a limited liability partnership is that partners can avoid personal liability for
any partnership obligation.
Don and Elaine are limited partners in Great Stores, a limited partner¬ship. In terms of the firm’s books, Don and Elaine are entitled to
total access
Jack and Kyra are partners in Law Firm, LLP, a limited liability partner-ship. Jack supervises Kyra, who negligently fails to appear in court on be¬half of Milo, a client. Liability to Milo rests with
Jack and Kyra
Fact Pattern 17-1B (Questions B14–B16 apply)
Brad is a general partner, and Carlos and Dora are limited partners, in Eastside Physicians, a medical clinic and limited partnership.

B14. Refer to Fact Pattern 17-1B. Carlos’s assignment of his interest in Eastside to Good Credit Corporation results in
nothing with respect to Eastside’s existence
Refer to Fact Pattern 17-1B. Brad’s dissociation from the firm results in
the termination of Eastside’s legal existence.
Refer to Fact Pattern 17-1B. Eastside is dissolved and its assets are collected, liquidated, and distributed. This results in
the termination of Eastside’s legal existence.
Maury, Neil, and Ogden want to form a limited partnership to manage their Picture This photo studio. Their firm must have
at least one general partner and one limited partner.
Fern and Gray want to form a limited partnership to manage two restau-rants: Café Latte and Delite Deli. In most states, a limited partnership will be created when
a certificate of limited partnership is filed
Lucy is a limited partner in Metro Contractors, a limited partnership, which cannot pay its debts. Lucy is personally liable for the debts
to the extent of her capital contribution
Rick and Sandy are limited partners in Terrific Profit Enterprises, a limited part¬ner¬ship. To avoid personal liability for partnership obligations, they must not
participate in the firm’s management
Venture Capital, LP, is a limited partnership. A Venture limited partner loses his or her limited liability if he or she
acts as the firm’s manager
Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a lim¬ited partner¬ship. Connie dies. The partnership can
continue only if Drew and Ellen consent
Energy Unlimited, LP, is a limited partnership to which its partners, in-cluding Fink, have contributed capital. Energy’s creditors include Graves Engineering, Inc. On Energy’s dissolution, its assets will be distributed to pay
Graves first.
Bruce is a general partner in Capitol Realty, LLLP, a limited liability lim-ited partnership, which cannot pay its debts. Bruce is personally li¬able for the debts
to the extent of his capital contribution
Stu is a limited partner and Tia is a general partner in S&T, a limited part-nership. Between Stu and Tia, on S&T’s dissolution its assets will first be distributed to pay
either partner’s unpaid distribution of partnership assets.
Hugh is a limited partner and Ida is a general partner in HI Volume, a limited partnership. Joy is one of HI Volume’s creditors. On HI Volume’s dissolution, the party whose rights have the first priority to the firm’s assets is
Joy only