ch 37 - Chapter 37 Limited Liability Companies and Special...

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Sheet1 Page 1 Chapter 37 Limited Liability Companies and Special Business Forms TRUE/FALSE QUESTIONS A1. For federal income tax purposes, a limited liability company can choose to be taxed like a corporation. ANSWER: T PAGE: 759 TYPE: = NAT: AACSB Analytic AICPA Legal B1. A limited liability company cannot be taxed as a corporation. ANSWER: F PAGE: 759 TYPE: N NAT: AACSB Analytic AICPA Legal A2. A limited liability company offers the limited liability of a corporation. ANSWER: T PAGE: 759 TYPE: = NAT: AACSB Analytic AICPA Legal B2. A limited liability company is operated in compliance with state law. ANSWER: T PAGE: 759 TYPE: = NAT: AACSB Analytic AICPA Legal A3. A limited liability company must be formed in compliance with federal law. ANSWER: F PAGE: 760 TYPE: = NAT: AACSB Analytic AICPA Legal TEST BANK A¡ªUNIT EIGHT: BUSINESS ORGANIZATIONS B3. A limited liability company is a legal entity apart from its owners. ANSWER: T PAGE: 760 TYPE: = NAT: AACSB Analytic AICPA Legal
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Sheet1 Page 2 A4. A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States. ANSWER: F PAGE: 760 TYPE: N NAT: AACSB Analytic AICPA Legal B4. The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status. ANSWER: F PAGE: 760 TYPE: N NAT: AACSB Analytic AICPA Legal A5. Most states do not permit one-member limited liability companies. ANSWER: F PAGE: 761 TYPE: = NAT: AACSB Analytic AICPA Legal B5. Forming a limited liability company requires filing articles of organization in a state office. ANSWER: T PAGE: 761 TYPE: = NAT: AACSB Analytic AICPA Legal A6. A limited liability company must have an operating agreement. ANSWER: F PAGE: 762 TYPE: = NAT: AACSB Analytic AICPA Legal B6. For federal jurisdictional purposes, a limited liability company is treated like a corporation. ANSWER: F PAGE: 761 TYPE: = NAT: AACSB Analytic AICPA Legal A7. Most limited liability company (LLC) statutes provide that unless the members agree otherwise, all profits of the LLC will b e ANSWER: T PAGE: 762
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Sheet1 Page 3 TYPE: = NAT: AACSB Analytic AICPA Legal B7. An operating agreement for a limited liability company need not be in writing. ANSWER: T PAGE: 762 TYPE: = NAT: AACSB Analytic AICPA Legal A8. In a limited liability company, members must participate in the management of the company. ANSWER: F PAGE: 764 TYPE: = NAT: AACSB Analytic AICPA Legal B8. Most limited liability company statutes have strict provisions regu- lating members¡¯ meetings. ANSWER: F PAGE: 764 TYPE: = NAT: AACSB Analytic AICPA Legal A9. In a limited liability company, members cannot participate in its management. ANSWER: F
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ch 37 - Chapter 37 Limited Liability Companies and Special...

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