Business Law - Chapter 38

Most state LLC statutes and the ULLCA provide that unless the articles of organization specify otherwise, an LLC is assumed to be ___ -managed.

member

LLC members have two options for managing the firm: it can be either a "____" LLC or a "____" LLC.

member-managed, manager-managed

The owners of an LLC are called ___.

members

The members of an LLC can decide how to operate the various aspects of the business by forming an __.

operating agreement

A joint venture is taxed like a ___.

partnership

An LLC that has only one member cannot be taxed as a ___.

partnership

If a dispute arises and the state's LLC statute does not cover the issue, courts sometimes apply the principles of ___ law.

partnership

Unless an LLC indicates that it wishes to be taxed as a corporation, the IRS automatically taxes it as a ___

partnership

Cooperatives that are not incorporated are often treated like ___.

partnerships

A joint stock company can have a ___ existence.

perpetual

Persons who are forming a corporation may enter into contracts during the process of incorporation but before the corporation becomes a legal entity. These contracts are referred to as ____ contracts.

preincorporation

Once the corporation is formed and adopts the ___, it can enforce the contract terms.

preincorporation contracts

An LLC will be bound by the ___ of its members during the winding up process.

reasonable acts

___ are formed to control the market and thereby enable members to sell their goods at higher prices.

seller marketing co-ops

In a joint stock company, property usually is held in the names of the owners, who are called ___, and they have ___ liability.

shareholders, personal

LLCs are governed by ___ statutes.

state

In a ___, or investment group, several individuals or firms join together to finance a particular project, such as the construction of a shopping center or the purchase of a professional basketball franchise.

syndicate

Members of incorporated cooperatives have ___ liability.

limited

A ___ is a hybrid that combines the limited liability aspects of a corporation and the tax advantages of a partnership.

limited liability company

For national trademark protection, the business must be the first to register the trademark with the U.S. ___.

Patent and Trademark Office

Even if the trademark is not registered the __ symbol can be used.

TM

ULLCA stands for __.

Uniform Limited Liability Company Act

In a joint stock company, shareholders are not considered to be ___ of each other, as they would be in a true partnership.

agents

A joint stock company is formed by ___, not statute.

agreement

Sometimes, when a corporation is deemed to be merely an "____" of the shareholder-owner, a court will pierce the corporate veil and hold the shareholder-owner responsible.

alter-ego

A court may apply the ___ when a shareholder commingles personal and corporate funds or fails to observe required corporate formalities.

alter-ego theory

To form an LLC, ___ must be filed with a central state agency.

articles of organization

In a business trust the profits are distributed to the __.

beneficiaries

A ___ is created by a written trust agreement that sets forth the interests of the beneficiaries and the obligations and powers of the trustees.

business trust

Trade secrets are protected under the ___ law.

common

___ are formed to obtain lower prices through quantity discounts.

consumer purchasing co-ops

A ___ is an association that is organized to provide an economic service to its members.

cooperative

A syndicate may be organized as either a ___ or a ___.

corporation, partnership

For federal income tax purposes, one-member LLCs are automatically taxed as sole proprietorships unless they indicate that they wish to be taxed as ___.

corporations

___ is a cooperative activity in which people network and pool funds and other resources via the Internet to assist a cause or invest in a venture.

crowdfunding

Regardless of whether a member's dissociation was wrongful or rightful, normally the dissociated member has no right to force the LLC to ___.

dissolve

In states that have adopted the ULLCA, the LLC must purchase the interest of a dissociated partner at ___ within ___ days after the dissociation.

fair value, 120

The symbol (R) may be use if the trademark is ___ registered.

federally

Under the ULLCA, managers in a manager-managed LLC owe ___ duties to the LLC and its members.

fiduciary

Joint venturers owe each other the same ___ duties, including the duty of ___, that partners owe each other.

fiduciary, loyalty

An LLC formed in one state but doing business in another state it is referred to in the second state as a ___.

foreign LLC

The members of a joint venture have less __ and ___ authority than the partners in a partnership.

implied, apparent

The members of a cooperative have ___ for the cooperative's acts.

joint liability

A ____ company is a true hybrid of a partnership and a corporation.

joint stock company

In a ___, two or more persons or business entities combine their efforts or their property for a single transaction or project or a related series of transactions or projects.

joint venture

Another similarity between corporations and LLCs is that LLCs are ___ apart from their owners.

legal entitites

If a member's dissociation violates the LLC's operating agreement, it is considered ___, and the dissociated member can be held liable for damages caused by the dissociation.

legally wrongful

Ownership of a joint stock company is represented by ____.

transferable shares of stock

In a business trust legal ownership and management of the trust's property stay with one or more of the __.

trustees

An LLC that has ___ or more members can choose to be taxed as either a partnership or a corporation.

two

The main disadvantage of the LLC is that state LLC statutes are not ___.

uniform

___, often organized into major firms, seek out promising enterprises and fund them in exchange for equity stakes.

venture capitalists