Exam 3 Practice Questions Essay

992 Words Mar 28th, 2015 4 Pages
Exam #3 Practice Questions (Answers at the end)

1. Which of the following is true of liabilities of LLCs?
A) Members of the LLC are liable to the extent of their capital contribution.
B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC.
C) LLCs are not liable for any loss or injury caused by their employees.
D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary

3. A(n) ________ refers to an agreement entered into among members that governs the affairs and business of the LLC and the relations among members, managers, and the LLC.
A) certificate of interest
B) articles of organization
C) operating agreement
D) agreement of conversion

3. Marshall is
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While she is doing so, a bank loans $1 million to the limited partnership, believing that Laura is a general partner. If the limited partnership defaults on the $1 million loan, which of the following holds well?
A) Laura is not personally liable as she is a limited partner on paper.
B) Laura is personally liable as the bank, in good faith, thought she is a general partner.
C) Laura has unlimited personal liability as a limited partner.
D) Laura's liability is restricted to the value of her capital investment in the partnership.

8. New general partners can be admitted only with the ________.
A) approval of at least two-thirds of the partners
B) specific consent of each partner
C) merger with another limited partnership
D) death of or transfer by a general partner

9. General partners have ________ for the debts and obligations of the partnership.
A) limited exemption
B) conditional exemption
C) limited organizational liability
D) unlimited personal liability

10. On the advice of her colleague, Stacey hires Harold, a lawyer and an independent contractor, to represent her in a court case. While driving to the courthouse to represent Stacey at trial, Harold negligently causes an automobile accident in which a bystander, Mildred, is severely injured. Who is liable to

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