Which of the following statements is true of a limited liability company LLC )? Quizlet?

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Terms in this set (17)

The vast majority of limited liability companies (LLCs) elect to be taxed as:
a. partnerships.
b. regulatory bodies.
c. nonprofits.
d. sole proprietorships.

a

An advantage of a general partnership is that the:
a. owners of the business have limited liability.
b. firm remains unaffected when an owner withdraws from the partnership.
c. business is taxed as the personal income of its owners.
d. potential for disagreements is rare.

c

In the context of a limited partnership, which of the following statements is true of general partners?
a. They are free of personal liabilities for any of the company's debts.
b. They have the right to participate fully in managing their partnership.
c. They can safeguard their personal wealth by not participating in the company's management.
d. They do not contribute financially to the company.

b

_____ are organizations that pool contributions from investors, clients, or depositors and use these funds to buy stocks and other securities.
a. Institutional investors
b. Angel investors
c. Business format franchises
d. Trading wealth funds

a

The _____ considers a C corporation to be a separate legal entity and taxes its earnings accordingly.
a. National Income Committee
b. Revenue Cycle Management
c. Central Board of Direct Taxes
d. Internal Revenue Service

d

In the context of corporations, _____ is a corporate restructuring in which one firm buys another.
a. equitization
b. an acquisition
c. ramification
d. a divestiture

b

Which of the following statements is true of limited liability companies (LLCs)?
a. They fall under the category of corporations.
b. Banks, insurance companies, and nonprofit organizations are the most common forms of LLCs.
c. There is no separate tax on the earnings of the companies if they choose to be treated as a partnership.
d. Transfer of ownership laws are uniform for LLCs in all states.

c

Which of the following is a disadvantage of a limited liability company (LLC)?
a. Double taxation of earnings
b. Restrictions on sale
c. Complexity of formation
d. Extensive paperwork requirements

c

From the franchisee's perspective, which of the following is an advantage offered by franchising?
a. Flexibility in management
b. Unlimited opportunities for growth
c. Easy access to funding
d. Low cost of formation

c

Which of the following is an advantage of sole proprietorships?
a. Limited workload and reduced responsibilities
b. Ease of formation
c. Permanence of the venture
d. Maximized ability to attract talented employees

b

Which of the following statements best describes a C corporation?
a. It is a form of business ownership in which the firm is considered by law merely as an extension of its owner.
b. It is a form of corporation that avoids double taxation by having its income taxed as a partnership.
c. It is a form of business ownership in which two or more members act as co-owners and have unlimited liability.
d. It is a legal business entity that offers limited liability to all of its owners, who are called stockholders.

d

In the context of corporations, the _____ and other corporate officers manage the company on a daily basis.
a. stockholders
b. board of directors
c. chief executive officer
d. profit-making investors

c

A key advantage of a C corporation is:
a. its ability to avoid double taxation.
b. minimal paperwork.
c. its ability to raise large amounts of financial capital.
d. the ease with which it can be formed and operated.

c

A key advantage of a C corporation is:
a. its ability to avoid double taxation.
b. minimal paperwork.
c. its ability to raise large amounts of financial capital.
d. the ease with which it can be formed and operated.

c

In the context of corporate restructuring, which of the following is a common objective of a conglomerate merger?
a. Improving efficiency by eliminating duplication of facilities and personnel
b. Increasing size and reducing competition within an industry
c. Reducing risk by making a firm less vulnerable to adverse conditions in any single market
d. Providing tighter integration of production and increased control over the supply of crucial inputs

c

In the context of formation, which of the following is a similarity between limited liability companies (LLCs) and corporations?
a. Similar to the bylaws of a corporation, organizers of most LLCs draft an operating agreement.
b. Like corporations, LLCs are not required to file a certificate of formation.
c. Similar to corporations, LLCs do not have to pay filing fees in the state where the business is organized.
d. Like in corporations, owners of most LLCs are called stockholders.

a

Unlike corporations, limited liability companies (LLCs):
a. cannot include owners who are foreign investors.
b. are subject to less paperwork.
c. are required to hold regular board meetings.
d. have more reporting requirements.

b

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Which of the following statements is true of a limited liability company LLC )?

Which of the following best describes a Limited Liability Company LLC )?

Which of the following is a characteristic of limited liability companies LLCs )? Quizlet?

Which of the following is an advantage of limited liability companies LLCs?