Formation
As a creature of state legislative bodies, a __________ is much more complex to create and operate than other forms of businesses.
What is a corporation?
The IRS considers this business organization a separate taxable entity which files its own tax returns.
What is a Corporation?
Jeff files articles of incorporation to start BluSly Inc. What will be the next step?
An organizational meeting.
The owners of an LLC.
Who are members?
After dissolution, the process of settling accounts and liquidating assets.
What is winding up?
The formal application for a corporate charter is called the __________.
When it comes to tax liability, unless it chooses to be taxed as a corporation, limited liability companies are taxed as _____________.
What is a partnership?
The _______________ is responsible for setting the goals of the business of a corporation.
What is the Board of Directors.
Burt has gone to a commercial bank to negotiate a loan for the LLC in which he is a member. He tells the bank that he is authorized to act on behalf o and bind the LLC. What is the best way for the bank to verify whether Burt does in fact have the authority he claims?
Check the LLC's articles of organization.
Even if the parties have no intent to form or operate as a partnership, their conduct may result in the law recognizing them as partners. True or False.
The business organization that has a limit on the number of owners.
What is a Sub S Corporation?
The legal principle that makes two or more people, usually partners, liable for an entire debt as individuals or in any proportional combination.
What is Joint and Several Liability?
Space X filed its articles of incorporation in Delaware, but is principal place of business is in Texas. In which state is Space X a domestic corporation?
What is Delaware?
For purposes of continuity and dissolution upon the transfer of a member's interest in an LLC, the LLC is like this type of business organization.
What is a partnership?
This happens when a partner of a general partnership dies.
What is dissolution?
What is a privately held (or closely held) corporation?
This is said to occur when a corporation pays taxes on its profits, and shareholders pay taxes on dividends they receive from the corporation.
What is double taxation?
Kathy is the president of a corporation. She has just made the news by being discovered with a male prostitute while at a conference. Mike, a shareholder, may successfully present a proposal at the next shareholder meeting calling for a shareholder vote to have her removed from office. True or False.
False.
Carlos is a member of an LLC along with three others. After one year, despite their best efforts, the business closes and the bank that extended them a loan sues for repayment. The bank may sue the members as well as the LLC.
False
If a partnership does not want to abide by the default rules under the Uniform Partnership Act, the partners can __________________.
What is enter into a written partnership agreement?
In these business organizations, only individuals may be owners.
What is a sole proprietorship and a Sub S corporation?
Zach, Khalid, and Ira form a partnership. Zach's capital contribution to the firm is $5,000, while Khalid and Ira contribute $10,000 each. The parties do not make any express agreement concerning how profits are to be divided. During the first year of the partnership, the business makes a profit of $30,000. Given this scenario, what will be Zach's share of the profit?
What is 10,000?
Natural Corporation often fails to file the annual reports required by law. They also have failed to conduct annual shareholders meeting and their bylaws have been out of date and not followed for about four years. What could be the result of this malfeasance?
A court could pierce the corporate veil.
For purposes of federal jurisdiction, a limited liability company is considered a citizen of ____________.
What is every state in which its members reside?
Cleveland and Archie operate an antique store, owned as a partnership between the two. Cleveland disappeared. A few days later, Archie learned that Cleveland embezzled $90,000 of the government grant money that was given in pandemic relief for their store during Covid-19. Is archie responsible for the $90,000?
Yes.