Cross 9e TBB Ch18

2210 Words Jun 13th, 2015 9 Pages
Chapter 18

Limited Liability Business Forms

N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.

N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.

true/false questions

1. A limited liability company is a citizen of every state of which their members are citizens.

ANSWER: T PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal

2. Members of limited liability companies are shielded from personal liability in many situations.

answer: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

3. The alter-ego theory can be applied to a corporation, but not
…show more content…
b. at least one member.
c. at least two members.
d. at least three members, including one general partner.

ANSWER: B PAGES: Section 1 TYPE: N BUSPROG: Reflective AICPA: BB-Legal

2. Bee Hive Honey, LLC’s members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is

a. an aggregate of Chad, Dolores, and the other members.
b. a natural person in the members’ “family.”
c. a legal entity apart from the owners.
d. a non-participating third party.

ANSWER: C PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal

3. Otto is considering forms of business organization for Pro Tree Service, his landscaping firm. Like most states, Otto’s state requires that to form a limited liabil­ity 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.

ANSWER: C PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal

4. Custom Auto Body & Detailing, LLC, is a limited liability company. Unless indi­cated otherwise on the Custom Auto’s federal tax form, the firm will be taxed as

a. a cooperative.
b. a corporation.
c. a joint venture.
d. a partnership.

ANSWER: D PAGES: Section 1 TYPE: = BUSPROG: Reflective AICPA: BB-Legal

5. Business Enterprise Company agrees to sell a commercial office building and parking garage to City Investments, Inc., which assigns the rights to the realty to Downtown Properties, LLC.

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