CHAPTER 37

REVIEW QUESTIONS

 

 

 

1.†††† Nina is considering forms of business organization for her construction-equipment business. For purposes of owning property and being a party to litigation, forms that are legal entities separate from their owners include

a.†††† corporations and limited liability companies.

b.†††† corporations only.

c.†††† limited liability companies only.

d.†††† neither corporations nor limited liability companies.

 

 

2.†††† Dan is considering forms of business organization for his financial advisory firm. Like most states, Danís state requires that to form a limited liabil≠ity company, he must file with a central state agency

a.†††† articles of certification.

b.†††† articles of formation.

c.†††† articles of organization.

d.†††† no specific documents.

 

 

3.†††† Accounting Applications, LLC, is a limited liability company. Unless indi≠cated otherwise on Accountingís federal tax form, the firm will be taxed as

a.†††† a corporation.

b.†††† a partnership.

c.†††† a sole proprietorship.

d.†††† a syndicate.

 

 

4.†††† American Products, LLC, is a limited liability company. Rather than dis≠tribute its profits to its members, American wants to reinvest the profits in its business. For this reason, American may prefer to be taxed as

a.†††† a corporation.

b.†††† a partnership.

c.†††† a sole proprietorship.

d.†††† a syndicate.

 

 

5.†††† Computer Games, LLC, is a limited liability company. Among the mem≠bers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of

a.†††† corporate law.

b.†††† partnership law.

c.†††† sole proprietorship law.

d.†††† syndicate law.

 

 

6.†††† Kris is a member of Liberty Services, LLC, a limited liability company. Kris can participate in the firmís management

a.†††† only to the extent that she assumes liability for the firmís debts.

b.†††† only to the extent of her investment in the firm.

c.†††† to any extent.

d.†††† to no extent.

 

 

7.†††† Best Construction, Inc. and General Real Estate Corporation form a joint venture. A joint venture is usually formed for

††††††††††††††† a.†††† an implied duration of not more than six months

††††††††††††††† b.†††† a single activity or transaction

††††††††††††††† c.†††† a stated duration of not more than one year

††††††††††††††† d.†††† perpetual existence