Question Details

Which of the following is true of a limited liability company 


1) Mary and George are a husband and wife who reside in a community property state. For 30 years, George has been the sole provider while Mary cared for the children and home. George dies, leaving a will that leaves his estate to their three children, now adults. How is the ownership of the house affected? 
A.  Mary owns half interest in the house, and the adult children own the other half.
B.  Mary owns the entire house, as the community survivor.
C.  Mary and the adult children become tenant in the entirety.
D.  Mary and the adult children each own a quarter interest in the house.
2) Which is true of a limited partnership? 
A.  The liability of all owners is unlimited.
B.  The liability of all owners is limited to the amount of their contribution to the business.
C.  At least one of the partners must be a general partner with unlimited personal liability.
D.  A partnership is limited to doing business in the state of incorporation.
3) Which of the following is true when a general partnership is converted to an LLC? 
A.  The conversion can be made retroactive for up to two years.
B.  The property must be sold to a third party who then immediately sells it to the LLC.
C.  The profit and loss sharing terms must remain the same as they were in the partnership.
D.  The members will retain unlimited personal liability for obligations incurred while the business was a partnership.
4) Which of the following is true of a limited liability company ? 
A.  Limited liability companies have limited duration.
B.  Limited liability companies are managed by members or managers.
C.  Documents do not have to be filed with the state to create one.
D.  Limited liability companies are automatically taxed like corporations.
5) If a creditor is owed money by an insolvent corporation, its best bet to collect is to try to 
A.  persuade a court that the corporation is inadequately capitalized, in hopes the court will lift the corporate veil
B.  persuade a court that the corporation has hidden assets against which the creditor may levy
C.  force the corporation to raise its prices to increase income
D.  force the corporation to refinance its debts



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