Question 1

With regard to an LLLP, a _____ is conclusive proof that a limited partnership exists.

Accepted Answer

A)   Domicile Certificate
B)   Certificate of Authority
C)   Certificate of Incorporation
D)   Certificate of Existence

Question 2

Jason believes that he is a limited partner in Yorktown Yankees Limited Partnership. Jason discovers that no limited partnership certificate has been filed with the secretary of state. What should he do?

Accepted Answer

A)   Withdraw from the limited partnership by obtaining a refund of his capital contribution.
B)   Cause a proper certificate of limited partnership to be filed with the secretary of state.
C)   File with the secretary of state a limited partner certificate declaring his limited partner status.
D)   Nothing. His status is not affected by the failure to file a limited partnership certificate.

Question 3

Each partner in a limited partnership owns a transferable interest in the partnership. This is deemed as personal property.

Accepted Answer

A) True 
 B)False

Question 4

An LLC member has no individual liability on LLC contracts, unless he/she also signs LLC contracts in his/her personal capacity.

Accepted Answer

A) True 
 B)False

Question 5

A dissociating member will be liable to the LLC for damages caused by the dissociation due to:

Accepted Answer

A)   the member being a debtor in a bankruptcy.
B)   the member's death due to a motor vehicle accident.
C)   a guardian being appointed over affairs of an Alzheimer-inflicted member.
D)   the member withdrawing from the LLC after its term has expired.

Question 6

How are limited liability companies (LLCs)  taxed?

Accepted Answer

A)   They are always taxed the same as general partnerships.
B)   They are always taxed the same as corporations.
C)   They are taxed either as partnerships or as corporations, at the option of the LLC.
D)   They are taxed either as partnerships or sole proprietorships, at the option of the LLC.

Question 7

A partner's transfer of his/her transferable interest has no effect on his/her status as a partner, absent a contrary agreement.

Accepted Answer

A) True 
 B)False

Question 8

Losses of the business allocated to a limited partner in a limited partnership or an LLLP offset his income from any other sources.

Accepted Answer

A) True 
 B)False  False

Question 9

The RULLCA allows for automatic dissolution of an LLC when:

Accepted Answer

A)   a member of the LLC dies.
B)   a majority of the members dissociate.
C)   a member of the LLC goes bankrupt.
D)   it becomes unlawful for the LLC business to continue. D

Question 10

Samantha is the general partner and Jack and Jared are the limited partners of Profiler Limited Partnership. Samantha has contributed capital of $30,000 to the partnership, Jack has contributed $150,000, and Jared has contributed $120,000. They have not agreed on how to share profits or losses. Profiler incurs a loss of $90,000 in its first year. What is Jack's share of the loss? If Jack has a total income of $225,000 from other sources and an income of $15,000 from other passive investments, how much of the loss may he deduct on his federal income tax return?

Accepted Answer

Jack's share of the loss is $45,000, but...

Question 11

In general, the ULPA does not grant partners much power to expel other partners from the partnership.

Accepted Answer

A) True 
 B)False

Question 12

Ordinarily, members of a limited liability company have limited right to manage the business of the LLC.

Accepted Answer

A) True 
 B)False

Question 13

A general partner in a limited partnership believes that an LLLP has been created wrongly. In such a case, which of the following will apply?

Accepted Answer

A)   He will be considered a limited partner of the limited partnership.
B)   He will lose his management powers over the limited partnership.
C)   He will have to share profits equally with all other partners.
D)   He will have unlimited liability for the obligations of the limited partnership.

Question 14

Terrance and Barbara created a limited partnership, but inadvertently misstated its name in the certificate of limited partnership. How will their liability be affected by this?

Accepted Answer

A)   The partners will have unlimited liability.
B)   Only general partners will have limited liability.
C)   Only general partners will have unlimited liability.
D)   The partner contributing more will be held for liability.

Question 15

Shawn was a manager and a limited partner in a Wall Street securities investment firm limited partnership. He was expelled from the limited partnership after his conviction in a securities fraud. Which of the following is true?

Accepted Answer

A)   Shawn will retain his right to receive profits.
B)   Shawn will retain his right to vote as a limited partner.
C)   Shawn will lose his limited liability status.
D)   Shawn will retain his managerial powers.

Question 16

Under the RULLCA, which of the following is true about a transferee in an LLC?

Accepted Answer

A)   A transferee has the right to hire managers in a manager-managed LLC.
B)   A transferee has limited rights to manage the ordinary business of the LLC.
C)   A transferee has only a limited right to information about the LLC's accounts.
D)   A transferee is a member of the LLC.

Question 17

The LLC is not ordinarily liable for the wrongful acts of:

Accepted Answer

A)   manager members in a member-managed LLC.
B)   nonmanager members in a manager-managed LLC.
C)   nonmanager members in a member-managed LLC.
D)   manager members in a manager-managed LLC.

Question 18

A dissociated limited partner:

Accepted Answer

A)   retains his right to receive profits.
B)   retains his right to vote as a limited partner.
C)   loses his limited liability status.
D)   retains his managerial powers.

Question 19

The owners of an LLC are called:

Accepted Answer

A)   natural persons.
B)   members.
C)   partners.
D)   managers. B

Question 20

Amanda and Sally are close friends who form a limited partnership to open a salon. They refuse to put a buyout clause for withdrawing partners in the limited partnership agreement, assuming that their friendship and business will last forever. Amanda, as a general partner, contributes $100,000 and Sally, as a limited partner, contributes $125,000. Two years later, Sally accuses Amanda of falsifying the data and withdraws from the limited partnership. How much will Sally receive from the limited partnership?

Accepted Answer

A)   $125,000
B)   $10,000
C)   $100,000
D)   $0

Exam 40: Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

With regard to an LLLP, a _____ is conclusive proof that a limited partnership exists.

Correct Answer
verified

Jason believes that he is a limited partner in Yorktown Yankees Limited Partnership. Jason discovers that no limited partnership certificate has been filed with the secretary of state. What should he do?

Correct Answer
verified

Each partner in a limited partnership owns a transferable interest in the partnership. This is deemed as personal property.

Correct Answer
verified

An LLC member has no individual liability on LLC contracts, unless he/she also signs LLC contracts in his/her personal capacity.

Correct Answer
verified

A dissociating member will be liable to the LLC for damages caused by the dissociation due to:

Correct Answer
verified

How are limited liability companies (LLCs) taxed?

Correct Answer
verified

A partner's transfer of his/her transferable interest has no effect on his/her status as a partner, absent a contrary agreement.

Correct Answer
verified

Losses of the business allocated to a limited partner in a limited partnership or an LLLP offset his income from any other sources.

Correct Answer
verified
False

The RULLCA allows for automatic dissolution of an LLC when:

Correct Answer
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D

Correct Answer
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Jack's share of the loss is $45,000, but...
View Answer

In general, the ULPA does not grant partners much power to expel other partners from the partnership.

Correct Answer
verified

Ordinarily, members of a limited liability company have limited right to manage the business of the LLC.

Correct Answer
verified

A general partner in a limited partnership believes that an LLLP has been created wrongly. In such a case, which of the following will apply?

Correct Answer
verified

Terrance and Barbara created a limited partnership, but inadvertently misstated its name in the certificate of limited partnership. How will their liability be affected by this?

Correct Answer
verified

Shawn was a manager and a limited partner in a Wall Street securities investment firm limited partnership. He was expelled from the limited partnership after his conviction in a securities fraud. Which of the following is true?

Correct Answer
verified

Under the RULLCA, which of the following is true about a transferee in an LLC?

Correct Answer
verified

The LLC is not ordinarily liable for the wrongful acts of:

Correct Answer
verified

A dissociated limited partner:

Correct Answer
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The owners of an LLC are called:

Correct Answer
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B

Correct Answer
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Exam 40: Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

With regard to an LLLP, a _____ is conclusive proof that a limited partnership exists.

Correct AnswerverifiedShow Answer

Jason believes that he is a limited partner in Yorktown Yankees Limited Partnership. Jason discovers that no limited partnership certificate has been filed with the secretary of state. What should he do?

Correct AnswerverifiedShow Answer

Each partner in a limited partnership owns a transferable interest in the partnership. This is deemed as personal property.

Correct AnswerverifiedShow Answer

An LLC member has no individual liability on LLC contracts, unless he/she also signs LLC contracts in his/her personal capacity.

Correct AnswerverifiedShow Answer

A dissociating member will be liable to the LLC for damages caused by the dissociation due to:

Correct AnswerverifiedShow Answer

How are limited liability companies (LLCs) taxed?

Correct AnswerverifiedShow Answer

A partner's transfer of his/her transferable interest has no effect on his/her status as a partner, absent a contrary agreement.

Correct AnswerverifiedShow Answer

Losses of the business allocated to a limited partner in a limited partnership or an LLLP offset his income from any other sources.

Correct AnswerverifiedFalse

The RULLCA allows for automatic dissolution of an LLC when:

Correct AnswerverifiedD

Correct AnswerverifiedJack's share of the loss is $45,000, but...View AnswerShow Answer

In general, the ULPA does not grant partners much power to expel other partners from the partnership.

Correct AnswerverifiedShow Answer

Ordinarily, members of a limited liability company have limited right to manage the business of the LLC.

Correct AnswerverifiedShow Answer

A general partner in a limited partnership believes that an LLLP has been created wrongly. In such a case, which of the following will apply?

Correct AnswerverifiedShow Answer

Terrance and Barbara created a limited partnership, but inadvertently misstated its name in the certificate of limited partnership. How will their liability be affected by this?

Correct AnswerverifiedShow Answer

Shawn was a manager and a limited partner in a Wall Street securities investment firm limited partnership. He was expelled from the limited partnership after his conviction in a securities fraud. Which of the following is true?

Correct AnswerverifiedShow Answer

Under the RULLCA, which of the following is true about a transferee in an LLC?

Correct AnswerverifiedShow Answer

The LLC is not ordinarily liable for the wrongful acts of:

Correct AnswerverifiedShow Answer

A dissociated limited partner:

Correct AnswerverifiedShow Answer

The owners of an LLC are called:

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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D

Correct Answer
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Jack's share of the loss is $45,000, but...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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