Question 1

Nature's Power L.P. is a limited partnership dedicated to the research and development of renewable sources of energy. Nature's Power has $100,000 in declared but unpaid profits. Its creditors include Omni Credit Corporation for $5,000 and Pinto, one of Nature's Power's limited partners, also for $5,000. When Quint, one of Nature's Power's general partners, decides to retire, the other general partners vote to liquidate and dissolve the firm. The limited partners, who are not asked their opinions, want Nature's Power to continue in business and file a suit against the general partners to compel this result. Can the court order the firm to continue? If not, what is the priority of the distribution of its assets on dissolution?

Accepted Answer

A court cannot order a partnership to co...

Question 2

As the promoter of Glassworks LLC, Hans enters into a contract with Interstate Transport Company. Once formed, Glassworks can

Accepted Answer

A)   forego an adoption process and simply enforce the contract.
B)   adopt the contract through novation.
C)   obtain the benefits of the deal without obligation.
D)   pierce Interstate's "corporate veil" to hold Hans liable on the contract.E) None of the above
F) A) and C)

Question 3

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

Accepted Answer

A)   member-managed.
B)   manager-managed.
C)   an aggregate of member and non-member managers.
D)   run by an outside professional management group.E) A) and B)
F) A) and C)

Question 4

The major features of an LLP are that it limits the personal liability of the partners and

Accepted Answer

A)   it allows the partnership to continue as a pass-through tax entity.
B)   LLP statutes do not vary from state to state.
C)   it can only do business in the state in which it was formed.
D)   only a few states have enacted LLP statutes.E) A) and B)
F) None of the above

Question 5

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

Accepted Answer

A)   their own wrongful acts.
B)   any partnership obligation.
C)   their own and other partners' wrongful acts.
D)   none of the choices.E) B) and C)
F) None of the above

Question 6

If a member of a limited liability company dissociates from the firm in violation of the operating agreement, the member can be held liable for any loss to the business resulting from the withdrawal.

Accepted Answer

A) True 
 B)False

Question 7

When a limited liability company is dissolved, the members may preserve the assets for a reasonable time to optimize their return during the winding up process.

Accepted Answer

A) True 
 B)False

Question 8

A limited liability company is an aggregate of its members, not a separate legal entity.

Accepted Answer

A) True 
 B)False

Question 9

The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm's members.

Accepted Answer

A) True 
 B)False

Question 10

To open and operate Boo! City, a Halloween costume and paraphernalia shop, Dwayne and Erica form a business organization that combines the limited liability aspects of a corporation with the tax advantages of a partnership. Their form of business organization is

Accepted Answer

A)   a limited liability partnership.
B)   a limited partnership.
C)   a limited liability company.
D)   a limited liability limited partnership.E) A) and D)
F) A) and C)

Question 11

Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation

Accepted Answer

A)   the member's duty of care continues with respect to prior events.
B)   the member's duty of loyalty continues until the firm dissolves.
C)   the member does not lose the right to participate in management.
D)   the member does not lose the right to act as an agent for the firm.E) A) and B)
F) A) and C)

Question 12

With respect to taxes imposed on limited liability companies, most states

Accepted Answer

A)   follow the federal rules.
B)   exempt the firms from federal taxes.
C)   permit the firms to choose whether to follow the federal rules.
D)   offer a hybrid tax regime.E) B) and C)
F) A) and B)

Exam 17: Limited Liability Business Forms

If a member of a limited liability company dissociates from the firm in violation of the operating agreement, the member can be held liable for any loss to the business resulting from the withdrawal.

Correct Answer
verified

The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm's members.

Correct Answer
verified

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

Correct Answer
verified

With respect to taxes imposed on limited liability companies, most states

Correct Answer
verified

A limited liability company is an aggregate of its members, not a separate legal entity.

Correct Answer
verified

To open and operate Boo! City, a Halloween costume and paraphernalia shop, Dwayne and Erica form a business organization that combines the limited liability aspects of a corporation with the tax advantages of a partnership. Their form of business organization is

Correct Answer
verified

The major features of an LLP are that it limits the personal liability of the partners and

Correct Answer
verified

Correct Answer
verified
A court cannot order a partnership to co...
View Answer

Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation

Correct Answer
verified

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

Correct Answer
verified

As the promoter of Glassworks LLC, Hans enters into a contract with Interstate Transport Company. Once formed, Glassworks can

Correct Answer
verified

When a limited liability company is dissolved, the members may preserve the assets for a reasonable time to optimize their return during the winding up process.

Correct Answer
verified

Exam 17: Limited Liability Business Forms

If a member of a limited liability company dissociates from the firm in violation of the operating agreement, the member can be held liable for any loss to the business resulting from the withdrawal.

Correct AnswerverifiedShow Answer

The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm's members.

Correct AnswerverifiedShow Answer

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

Correct AnswerverifiedShow Answer

With respect to taxes imposed on limited liability companies, most states

Correct AnswerverifiedShow Answer

A limited liability company is an aggregate of its members, not a separate legal entity.

Correct AnswerverifiedShow Answer

To open and operate Boo! City, a Halloween costume and paraphernalia shop, Dwayne and Erica form a business organization that combines the limited liability aspects of a corporation with the tax advantages of a partnership. Their form of business organization is

Correct AnswerverifiedShow Answer

The major features of an LLP are that it limits the personal liability of the partners and

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA court cannot order a partnership to co...View AnswerShow Answer

Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As the promoter of Glassworks LLC, Hans enters into a contract with Interstate Transport Company. Once formed, Glassworks can

Correct AnswerverifiedShow Answer

When a limited liability company is dissolved, the members may preserve the assets for a reasonable time to optimize their return during the winding up process.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A court cannot order a partnership to co...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified