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Exam 18: Small Businesses and Limited Liability Companies

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Question 1

Multiple Choice

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Carl starts up, and assumes the financial risk of, DataWorks, a new Web marketing enterprise. Carl and DataWorks must meet legal requirements relating to​

A) ​business name and state tax registration.
B) ​occupational licensing.
C) ​intellectual property laws.
D) ​all of the choices.

E) All of the above
F) None of the above

Correct Answer

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D

Question 2

True/False

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

A) True
B) False

Correct Answer

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True

Question 3

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

Craig, Donna, and Eve do business as Fast-Track Career Consultants. Eve's relationship to Fast-Track ends, but the firm continues to do business. This is​

Olivia is a partner in Pacific Traders. In the majority of states, with respect to any partnership obligations that Olivia does not participate in, know about, or ratify, she would be liable for​

Nina, the owner of Organic Farm, a sole proprietorship, wants to obtain additional capital to operate. This can be accomplished by​

Luke and Maya form Northeast Air Express, a partnership. The essential elements of this partnership do not include​

Bette is one of three partners in Clean & Clear, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to​

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

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

Chet is a partner in Diligent Accounting Service. Chet can inspect Diligent's books and records​

Fact Pattern 18-1 Bryn, Cornell, and Duke are partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 18-1. Bryn, Cornell, and Duke decide to admit Giselle as a new partner in Equity Lending. Giselle's liability for partnership debts incurred before her admission is​

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

In choosing a form of business organization for a new enterprise, important factors include tax considerations.​

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

Any suit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship.​

Selections, a partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions​

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​

Any business-except a sole proprietorship-must comply with business registration and licensing requirements.​

Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.​