ch42

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

. ​Management of an LLC is vested in its: a. ​members b. ​partners c. ​shareholders d. ​managers

a

The owners of a limited liability company are known as: ______. a. ​members. b. ​partners. c. ​contributors. d. ​electors.

a

The partners who manage the limited partnership and are personally liable for the firm debts are called the __________ partners. a. ​general b. active c. ​licensed​ d. ​unreserved

a

​A limited liability company may be classified as a partnership for tax purposes if: a. ​such an election is made by "checking the box" for partnership tax treatment on the appropriate Internal Revenue Service form. b. ​such an election is made in the operating agreement. c. ​such an election is made in the articles of incorporation. d. ​a majority of its members petition the Internal Revenue Service for partnership tax treatment.

a

A limited liability company: ______. a. ​is the same type of business entity as a "Subchapter S" corporation. b. ​has no restriction on the number of owners. c. ​is taxed in a manner similar to that of a corporation. d. ​has unlimited life regardless of what happens with any individual member.

b

All of the following statements concerning LLC's are incorrect except: ______. a. ​Federal income tax is due on its income as an entity. b. ​Income flows through to the members based on their proportionate interests in the company. c. ​No filing is necessary to form a limited liability company. d. ​All members enjoy unlimited liability.

b

Which form of business entity was created primarily to professionals from malpractice liability generated by other owners in the firm? a. ​the limited partnership b. ​the limited liability partnership c. ​the limited liability company d. ​the general partnership

b

​The spread of LLC's resulted from: a. ​a United States Supreme Court decision. b. ​an Internal Revenue Service ruling. c. ​a Wyoming Supreme Court decision. d. ​a Securities and Exchange Commission ruling.

b

. ​In every state, LLP partners remain ______ liable for their own negligence with ______ liability for the wrongful acts of those whom they directly supervise and control. a. ​personally, partial b. fully, partial c. ​fully, unlimited​ d. ​contributorily, unlimited

c

All of the following statements regarding LP's are not true, except: _______. a. ​The words limited partnership or simply LP must appear in the firm's name. b. ​General partners cannot avoid personal liability by incorporating. c. ​Limited partners can lose their liability limitation if they participate in the control of the business. d. If sued, limited partners can lose more than their capital investment.

c

The dissolution and winding up of a limited partnership is governed by the same principles applicable to a: __________. a. ​"subchapter S" corporation. b. ​limited liability company. c. ​general partnership. d. ​limited liability partnership.

c

​Each limited partner in a limited partnership has all of the following rights and benefits, except: a. ​A share of the profits. b. ​The right to sue the general partner to protect the limited partners' interest. c. ​The right to manage the limited partnership. d. ​The right to vote on dissolution of the limited partnership.

c

A court can disregard the LLC entity to hold one or more members personally liable in any of the following situations, except: _______. a. ​when members fail to follow formalities. b. ​when members commingle company and personal funds. c. ​when members ignore the articles of organization. d. ​ when members vote to make substantive changes to the operating agreement.

d

A creditor's right against a member's interest in an LLC is limited to a(n) _______ order, and the creditor with such an order has only the rights of an assignee of an interest in an LLC. a. ​dissolution b. ​compliance c. ​assignment d. ​charging

d

A limited partnership can be formed by one (1) or more __________ partners and one (1) or more __________ partners. a. ​unreserved; reserved b. ​active; silent c. ​licensed; unlicensed d. ​general; limited

d

Under the RULPA, a limited partner may contribute: ______.​ a. ​cash only. b. property only. c. ​​services only. d. ​cash, property, and services.

d

Under the RULPA, a limited partner probably will not lose his limited liability in any of the following circumstances unless: ______. a. ​the limited partner becomes a contractor for, or an agent or employee of, the limited partnership or of a general partner. b. ​the limited partner consults with and advises a general partner regarding the partnership business. c. ​the limited partner votes on partnership matters, such as dissolving and winding up the limited partnership or removing a general partner. d. ​the partners fail to file a limited partnership certificate.

d

When no LP certificate is filed, what is the result? a. ​Only limited partners are fully liable. b. ​Only general partners are fully liable. c. ​Limited partners retain their limited liability. d. ​Both general and limited partners are fully liable.

d

​Like a general partnership, LLC's are dissolved by all of the following situations except: _______. a. ​by the consent of the members. b. ​upon the death of a member. c. ​upon the expulsion of a member. d. ​when a derivative suit is filed.

d

​Members of a limited liability company share profits: a. ​according to their status (general or limited) in the firm. b. ​in proportion to their contribution of services. c. ​in proportion to their capital contribution. d. ​according to the terms of the operating agreement.

d


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