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Exam 36: Limited Liability Companies and Special Business Forms

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Question 21

Multiple Choice

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Greenway Corporation and Happy Trails Inc. combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

A) a business trust.
B) a joint stock company.
C) a joint venture.
D) a syndicate.

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

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Question 22

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When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation.

A) True
B) False

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Question 23

Multiple Choice

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Licensed fishing outfits in Bayou City form a business organization to provide, without profit, an economic service to its members. This is

In a joint stock company, the shareholders are considered to be agents of one another, as the partners are in a partnership.

To gain an advantage in a business deal, Masonry LLC engages in fraud. Nicole, a member of Masonry, significantly contributes to the firm's misconduct. For any resulting damages, a court is most likely to hold Nicole

When the member of a limited liability company engages in fraud on the firm's behalf, the member is not likely to be held personally liable.

The beneficiaries of a business trust are personally liable for the trust's debts and obligations.

Commerce & Trade Corporation and Distance Shipping & Transport, Inc., form a business trust. eCharge Auto Company and Fleet Electric Corporation form a joint stock company. Green AgriCorp and Harvest Farms, Inc., form an incorporated cooperative. What features do these combinations of business organization have in common?

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.

Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its assets are held in the names of the members and its shareholders have personal liability. This organization is

A business organizational form that limits its owners' liability allows the firm to lawfully

Like a sole proprietorship or a partnership, the members of a limited liability company have unlimited liability for the firm's debts.

Phone Apps LLC is forming as a limited liability company. To become a manager-managed firm, Phone Apps' members must

In a state in which the managers of a limited liability company owe fiduciary duties to the firm and its members, those members can sue the managers for breaching a fiduciary duty.

The operating agreement of a limited liability company cannot provide for the calculation of a buyout price on a member's dissociation because the event has not yet occurred.

In some states, to form a limited liability company, a business must have

Start-Up 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

A syndicate may be organized as a corporation or a partnership, or in some situations as no recognizable form of business organization.

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.

Global Capital S.A. is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can