LLC BASICS
This business type protects owners’ personal stuff if the business gets sued.
What is an LLC?
The paper filed with the state to start an LLC.
What are the Articles of Organization?
Acting in the company’s best interest = this duty.
What is fiduciary duty?
This is usually the lowest-cost way to solve a business argument without going to court.
What is mediation?
This means the chance that a business could lose money or be harmed.
What is business risk?
An LLC must have a board of directors.
What is False?
The “rulebook” for an LLC that explains how members work together.
What is an Operating Agreement?
Starting a competing business using company knowledge violates this responsibility.
What is the duty of loyalty?
This agreement can still apply even after someone leaves the company.
What is an NDA?
A hurricane damaging your store is an example of this kind of risk (something you can’t control).
What is an uncontrollable risk?
A business owned by one individual where the owner takes on all profits and losses.
What is a sole proprietorship?
Members argue about who gets what percent of profits. The first place they should look is this document.
What is the Operating Agreement?
Making informed, careful decisions shows compliance with this duty.
What is the duty of care?
A member stops doing their share. Best next step before court:
What is have a meeting and renegotiate the terms / address it using the agreement?
Stealing by employees or workers is an example of this type of risk.
What is human risk?
The main reason an LLC is safer than a sole proprietorship: it lowers this.
What is personal liability?
A contract that says, “Don’t share our secret idea/recipe/design with others.”
What is an NDA (Non-Disclosure Agreement)?
Choosing a vendor because they’re your friend (not best for the company) is this.
What is a conflict of interest?
Ending a business (voluntary or forced) is called:
What is dissolution?
When customers stop wanting a product because it’s outdated.
What is product obsolescence?
In an LLC, this is usually protected if the business owes money.
What are the owner’s personal assets?
Which document is filed with the state: Operating Agreement or Articles of Organization?
What are the Articles of Organization?
Using company info to start a competing side business breaks this.
What is a breach of duty of loyalty?
Best clause to protect secret product ideas:
What is an NDA (confidentiality) clause?
$500 “Buy now, pay later (30–60 days)” is called ____. Biggest risk: ____.
What is trade credit, and the risk is customers don’t pay?