Question 41

In a manager-managed firm, the members of an LLC must

Group of answer choices

refrain from participating in the firms operations.

vote on every decision that the manager makes.

elect to apply the principles of partnership law to their firm.

expressly adopt the corporate form of business organization.

Question 42

Grape Vineyards LLC, the members of which include Howie and Ilya, can hold title to property because as a limited liability company the firm is

Group of answer choices

the sum of its members.

a non-entity

a legal person.

a holding company.

Question 43

A limited liability company that wants to distribute profits to its members could avoid double taxation by electing to be taxed as

Group of answer choices

a person.

a corporation.

a sole proprietorship.

a partnership.

Question 44

Bert is considering forms of business organization for Ernie Center, a medical clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

Group of answer choices

their own wrongful acts.

any partnership obligation.

their own and other partners wrongful acts.

none of the choices.

Question 45

Diane and Mark want to form a limited partnership to do tax accounting. In most states, a limited partnership will be created when Diane and Mark

Group of answer choices

file a certificate of limited partnership.

execute a partnership agreement.

accept their first client.

make their capital contributions.

Question 46

Mitchelli LP is a limited partnership that invests in real estate. Its limited partners include more than 150 sophisticated investors and investment professionals, including Ruby. Ruby loses his limited liability if she

Group of answer choices

participates extensively in the firms management.

does not participate in the firms management.

invests in a project that the firm has declined.

votes to sell or dissolve the firm.

Question 47

Ashok and Galen do business as GA Pool Manufacturers. In acting on the firms behalf, Ashok makes an honest mistake in underestimating the cost of a project. In this situation, to her firm, Ashok is

Group of answer choices

liable for a breach of the duty of care.

liable for a breach of the duty of accounting.

liable for a breach of the duty of loyalty.

not liable for a breach of any duty.

Question 48

The biggest risk of starting a sole proprietorship is

Group of answer choices

that the owner's personal assets are at risk if there is a lawsuit or loss.

sole proprietorships never make very much money.

the owner might want to expand and conversion to a partnership is difficult and expensive.

the commitment to be a sole proprietorship is permanent.

Question 49

To be enforceable, a partnership agreement must be

Group of answer choices

filed in the appropriate state office.

in writing.

signed by a witness.

on file in the main office.

Question 50

Ron operates a pizza shop in Laramie, Wyoming. Ron hires Susan to wait tables and prepare orders at an hourly wage of $15.00, plus tips. Ron and Susan are

Group of answer choices

not partners, because Susan does not have an ownership interest or management rights in the pizza place.

not partners, because the pay includes an hourly wage.

not partners, because the pay includes tips.

partners in a partnership.