Mona Is Opening a New Business Selling Fake Fur Coats

Mona is opening a new business selling fake fur coats.She organizes the company as a limited liability company called Fake-It,LLC and borrows $100,000 from a local bank in Fake-It's name.She also signs a personal guarantee at the bank promising to pay the debt of Fake-It.A friend of hers,Tanner,a second-year law student,advises her not to worry about the personal guarantee,because under the law of limited liability companies,it would be illegal for anyone to attempt to hold her liable for debts of the company.Is Tanner right?

A) yes, Tanner is right, and the bank violated the law by asking Mona to sign a personal guarantee
B) yes, Tanner is right, but only if Mona can establish that she did not know the bank was asking her to do anything illegal when she signed the agreement
C) yes, Tanner is right, but the bank may recover its loan from Mona's capital contribution
D) no, Tanner is wrong, but only because Mona has opened a business selling goods, rather than real estate
E) no, Tanner is wrong, because a member of a limited liability company is personally liable for the debts of a limited liability company when a personal guarantee is provided