Chapter 38 LLC's & JV's

Bee Hive Honey, LLC's members include Charlie and Donna. For purposes of suing and being sued, Bee Hive Honey is

A legal entity apart from it's members

Home Healthcare, LLC's owners are Inez and Jan. For purposes of entering into contracts, Home Healthcare is

A legal entity apart from its owners

Jeremy is considering forms of business organizations, including the limited liability company (LLC), for his concessions business—Kettle Popt-Korn. Most states require that an LLC have

At least one member

Michel is a citizen of France. With respect to a limited liability company in the United States, Michel can

Become a member

Rollo is a member of Smooth Operators LLC, a limousine service. Rollo's relationship to Smooth Operators ends, but the firm continues to do business. This is

Dissociation

Start-Ups, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Divided equally among the members.

Western Rodeo LLC is a limited liability company (LLC). Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of

Every state of which its members are citizens.

Courts can never "pierce the corporate veil" of a limited liability company to expose shareholders to personal liability

False

Every limited liability company is a citizen of every state.

False

For federal income tax purposes, one-member limited liability companies are never taxed as corporations.

False

Foreign investors cannot participate in a limited liability company.

False

Generally, a dissociated member of a limited liability company (LLC) has the right to buy his or her interest in the LLC from the other members.

False

Generally, if a member dissociates from a limited liability company (LLC), the other members cannot continue to carry on the LLC's business.

False

If a dispute arises and the applicable limited liability company statute does not cover the issue, a court will most likely dismiss the case.

False

In a limited liability company, the management may consist of members or nonmembers, but not both.

False

In many states, an operating agreement is required for a limited liability company to exist.

False

In most states, a limited liability company can have only a limited number of members.

False

In most states, a limited liability company must have at least two members.

False

Like the shareholders of a corporation, the owners of a limited liability company are liable for the obligations of the firm to the full limit.

False

Limited liability companies (LLCs) are governed by federal LLC statutes.

False

Limited liability companies cannot enter into contracts or hold title to property.

False

Most states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC currently does business.

False

Normally, a member who dissociates from a limited liability company (LLC) has the right to force the LLC to dissolve.

False

The members of a limited liability company have unlimited liability for any loss or injury caused by the wrongful acts or omissions of the firm.

False

To form a limited liability company, articles of organization must be filed with the federal Small Business Administration.

False

Under most limited liability company statutes, if the members do not specify how profits will be split, they are divided in proportion to the members' capital investment.

False

When a limited liability company is dissolved, any member, including those who wrongfully dissociated, may participate in the winding up process.

False

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, decisions are made according to

Majority vote

Data Analytics, LLC, is a limited liability company. Unless the articles of organization specify otherwise, it will most likely be assumed that the firm is

Member-Managed

Jeri and Knute are members of Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours's liabilities, as members, Jeri and Knute are shielded from

Personal liability

A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members in the course of business.

True

A limited liability company can be taxed as a corporation.

True

Limited liability companies are entities apart from their owners.

True

Limited liability company operating agreements can provide whether formal members' meetings will be held.

True

Members of a limited liability company (LLC) can stipulate in their operating agreement how managers will be chosen or removed.

True

Members of a limited liability company can stipulate in their operating agreement provisions relating to dissolution.

True

The courts have tended to regard a limited liability company as a citizen of every state of which its members are citizens.

True

Typically, the articles of organization of a limited liability company (LLC) include information on how the LLC will be managed.

True

Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership.

True

Custom Auto, LLC, is a limited liability company. Its members include Dennis and Emma. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as

a partnership

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to

any extent

Beth and Carol want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in

less than one-fifth of the states.

Phone Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

the applicable state LLC statute.

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

to the extent of her investment in the firm.