Legal Bus Ch17

Front 1

For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.

Back 1

true

Front 2

A limited liability company cannot be taxed as a corporation

Back 2

false

Front 3

A limited liability company offers the limited liability of a corporation

Back 3

true

Front 4

State law governs the operation of a limited liability company

Back 4

true

Front 5

State law governs the formation of limited liability companies

Back 5

true

Front 6

A limited liability company is a legal entity apart from its owners.

Back 6

true

Front 7

A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States.

Back 7

false

Front 8

The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status

Back 8

false

Front 9

Most states require a limited liability company to have at least two members.

Back 9

false

Front 10

For overt hypothyroidism, what is effective in addition to levothyroixine?

Back 10

Liothyronine

Front 11

A limited liability company is a citizen of every state of which its members are citizens.

Back 11

true

Front 12

The death of a general partner can terminate a limited partnership.

Back 12

true

Front 13

For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.

Back 13

true

Front 14

For federal jurisdictional purposes, a limited liability company is treated like a corporation.

Back 14

false

Front 15

A limited liability company must have an operating agreement

Back 15

false

Front 16

An operating agreement is required to form a limited liability company

Back 16

false

Front 17

Most limited liability company statutes provide that unless the members agree otherwise, all profits are divided equally.

Back 17

true

Front 18

Most limited liability company statutes have strict provisions regu¬lating members’ meetings.

Back 18

false

Front 19

In a limited liability company, members must participate in the manage-ment of the company

Back 19

false

Front 20

In a limited liability company, members do not have to participate in its manage¬ment.

Back 20

true

Front 21

In a limited liability company, members cannot participate in its management.

Back 21

false

Front 22

The dissociation of a mem¬ber of a limited liability company in violation of the operating agreement is legally wrongful.

Back 22

true

Front 23

In a limited liability partnership, a partner can be exempt from personal liability for partnership obligations

Back 23

true

Front 24

State law governs the formation of a limited liability partnership

Back 24

true

Front 25

With a few exceptions, all of the rules that govern partnerships apply to limited liability partnerships

Back 25

true

Front 26

In a family limited liability partnership, only persons related to each other may be partners.

Back 26

false

Front 27

A limited liability partnership can be formed in virtually any state.

Back 27

true

Front 28

In a family limited liability partnership, only persons related to each other can be limited partners.

Back 28

false

Front 29

In a limited partnership, the liability of a general partner is unlimited.

Back 29

true

Front 30

The maximum amount of money at risk by a limited partner is the amount of his or her investment in the limited partnership.

Back 30

true

Front 31

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.

Back 31

true

Front 32

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

Back 32

false

Front 33

Only a limited partnership’s limited partners have a fiduciary obligation to the other partners.

Back 33

false

Front 34

A limited partner who participates in the management of the partner¬ship may be personally liable to the firm’s creditors.

Back 34

true

Front 35

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.

Back 35

false

Front 36

The death of a limited partner dissolves a limited partnership

Back 36

false

Front 37

A general partner has the power to dissociate from a limited partnership regardless of what the partnership agreement specifies.

Back 37

false

Front 38

In winding up a limited partnership, non-partner creditors are paid be¬fore the partners receive their capital contributions

Back 38

true

Front 39

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.

Back 39

true

Front 40

In a limited liability limited partnership, the liability of a general part¬ner is the same as the liability of a limited partner.

Back 40

true

Front 41

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

Back 41

a partnership

Front 42

Bookkeepers, LLC, is a limited liability company. Unless indi¬cated otherwise on Bookkeepers’s federal tax form, the firm will be taxed as

Back 42

a partnership

Front 43

Denny and Erv want to form a limited liability company (LLC) to manage their Web business, Filmz Online. LLC statutes have been adopted in

Back 43

all states

Front 44

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

Back 44

A corporation

Front 45

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

Back 45

a legal entity apart from the owners

Front 46

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

Back 46

a shareholder of a corporation.

Front 47

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

Back 47

an owner

Front 48

High Pointe LLC’s members include Irvin. For purposes of holding title to property, High Pointe is

Back 48

a legal entity apart from the owners

Front 49

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

Back 49

one member

Front 50

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

Back 50

become a member

Front 51

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

Back 51

every state in which its members are citizens

Front 52

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

Back 52

articles of organization

Front 53

Vijay is a member of Watchit, LLC, a limited liability company. Vijay is li-able for Watchit’s debts

Back 53

to the extent of his capital contribution

Front 54

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

Back 54

partnership law

Front 55

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

Back 55

the applicable state LLC statute.

Front 56

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

Back 56

New Jersey and New York.

Front 57

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

Back 57

flexibility

Front 58

Kris is a member of Laboratory Services, LLC, a limited liability company. Kris can participate in the firm’s management

Back 58

to any extent

Front 59

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

Back 59

all members

Front 60

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

Back 60

optional

Front 61

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

Back 61

capital contributions

Front 62

Gallop Western Ranch is a family limited liability partnership (FLLP). In an FLLP, all of the partners must be

Back 62

natural persons or persons acting as fiduciaries for natural persons

Front 63

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

Back 63

dissociation.

Front 64

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

Back 64

according to the agreement

Front 65

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

Back 65

any partnership obligation.

Front 66

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

Back 66

total access

Front 67

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

Back 67

Jack and Kyra

Front 68

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

Back 68

nothing with respect to Eastside’s existence

Front 69

Refer to Fact Pattern 17-1B. Brad’s dissociation from the firm results in

Back 69

the termination of Eastside’s legal existence.

Front 70

Refer to Fact Pattern 17-1B. Eastside is dissolved and its assets are collected, liquidated, and distributed. This results in

Back 70

the termination of Eastside’s legal existence.

Front 71

Maury, Neil, and Ogden want to form a limited partnership to manage their Picture This photo studio. Their firm must have

Back 71

at least one general partner and one limited partner.

Front 72

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

Back 72

a certificate of limited partnership is filed

Front 73

Lucy is a limited partner in Metro Contractors, a limited partnership, which cannot pay its debts. Lucy is personally liable for the debts

Back 73

to the extent of her capital contribution

Front 74

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

Back 74

participate in the firm’s management

Front 75

Venture Capital, LP, is a limited partnership. A Venture limited partner loses his or her limited liability if he or she

Back 75

acts as the firm’s manager

Front 76

Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a lim¬ited partner¬ship. Connie dies. The partnership can

Back 76

continue only if Drew and Ellen consent

Front 77

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

Back 77

Graves first.

Front 78

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

Back 78

to the extent of his capital contribution

Front 79

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

Back 79

either partner’s unpaid distribution of partnership assets.

Front 80

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

Back 80

Joy only