Cross 9e TBB Ch18

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 a limited liability company.

answer: F PAGES: Section 1 TYPE: + BUSPROG: Analytic AICPA: BB-Legal

4. Limited liability companies are entities apart from their owners.

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

5. A limited liability company can be taxed as a partnership.

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

6. The law governing limited liability companies is uniform.

ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

7. A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

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

8. For federal income tax purposes, one-member limited liability companies are not taxed.

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

9. Most states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC was formed.

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

10. Limited liability company operating agreements typically contain provisions relating to management.

ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: