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Harrison and Susie Form a Limited Liability Corporation

Question 103

Multiple Choice

Harrison and Susie form a limited liability corporation.Harrison makes a capital contribution of $90,000,and Susie makes a capital contribution of $10,000.They have no agreement as to how profits are to be shared.If the limited liability company makes $100,000 in profits in its first year,under the Uniform Limited Liability Act,how will the profits be divided?


A) Harrison will receive $50,000, and Susie will receive $50,000.
B) Harrison will receive $90,000, and Susie will receive $10,000.
C) Pursuant to the requirements of the Uniform Limited Liability Act, they will divide the profits after twenty percent of the profits are reinvested in the company.
D) Pursuant to the Uniform Limited Liability Act, they will divide the profits consistent with their respective proportional capital contributions, after twenty percent of the profits are reinvested in the company.
E) The first $100,000 of earnings must be reinvested in the company.

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