Question 1

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint venture is usually formed for

Accepted Answer

A joint venture is usually formed for a single transaction or project, as opposed to a perpetual existence. While some joint ventures may last longer than one year, there is no stated or implied duration limit.

Question 2

Qatar Global Investments is a foreign entity-a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

Accepted Answer

As a foreign entity, Qatar Global Investments can become a member of a limited liability company in the United States. This means they can have ownership rights and participate in the company's operations.

Question 3

IT Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

Accepted Answer

As a limited liability company, the dispute would be governed by the applicable state LLC statute. Each state has its own LLC statute, which lays out the default rules for LLCs in that state, including rules for resolving disputes among members. While the Uniform Limited Liability Company Act has been adopted in some states, not all have done so, and even in those states, variations may exist. Partnership law would not apply, as an LLC is a distinct legal entity from a partnership, and there are no federal LLC statutes.

Question 4

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management

Accepted Answer

As a joint venture, Oni can participate in the management to any extent, regardless of her investment or liability for debts. Joint ventures involve shared management and decision-making between the two parties involved.

Question 5

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is

Accepted Answer

Romero's departure from Smooth Operators is an example of dissociation, which means that a member is no longer associated with the company, but the company continues to operate. This is a common occurrence in LLCs and does not necessarily require the dissolution of the company.

Question 6

Oil Reserves, Inc., and Petro Refining Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Accepted Answer

A joint venture is a type of partnership where two or more parties come together for a specific business venture. Therefore, when a dispute arises between the parties, the court is most likely to apply the same principles to a joint venture as it does to partnerships. The principles of liability, fiduciary duties, and rights and obligations of partners are all relevant to joint ventures as they are to partnerships. Limited liability companies and corporations are separate legal entities, with different legal structures and principles of operation. Therefore, they are not the best choice for this scenario.

Question 7

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to

Accepted Answer

The joint venture is a type of partnership and, therefore, the court is most likely to apply the same principles to this joint venture as it applies to partnerships.

Question 8

Lebron, Michael, Nolan, and O'Neill combine to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

Accepted Answer

A syndicate is a group of individuals or organizations who come together for a specific purpose, such as buying a professional basketball franchise in this case. It is a form of business organization where each member contributes capital and shares in the profits and losses of the venture. It is the most likely option for the four individuals mentioned. A business trust typically involves a trustee managing assets for the benefit of beneficiaries, while a joint stock company involves shareholders buying and selling shares of stock. A joint venture is a partnership between two or more businesses to undertake a specific project or task.

Question 9

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is

Accepted Answer

This form of business organization is a business trust, where the property is transferred to a trustee (Investment Managers, Inc.) who manages it for the benefit of the beneficiaries (Global Shipping and Harbor Warehouse).

Question 10

Greenway Corporation and Happy Trails, Inc., combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

Accepted Answer

Greenway Corporation and Happy Trails, Inc. are forming a partnership for a specific project. A joint venture is a business organization where two or more parties come together to work on a specific project or for a limited time period. They share the profits and losses of the project, but the joint venture does not continue as an ongoing business enterprise. This type of organization is suitable for this scenario where both companies want to collaborate for a specific project. Options A, B, and D are not the appropriate types of business organization for this scenario.

Question 11

StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

Accepted Answer

The answer of StartUp Investors, LLC, is a limited liability...

Question 12

GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by

Accepted Answer

The ownership of a joint stock company is represented by shares of stock.

Question 13

Western Rodeo LLC is a limited liability company (LLC). Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of every state

Accepted Answer

For federal jurisdictional purposes, an LLC is generally considered a citizen of every state where its members are citizens.

Question 14

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

Accepted Answer

In a limited liability company, members are typically only liable for the debts or obligations of the company to the extent of their investment in the firm. Therefore, Dana is only liable for Earthground's debts to the extent of her investment in the company.

Question 15

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to

Accepted Answer

Unless members have agreed otherwise, voting rights in a member-managed LLC are apportioned according to the members' capital contributions.

Question 16

Arnie is a member of Bowling & Billiards, LLC. Arnie can participate in the firm's management

Accepted Answer

As a member of Bowling & Billiards, LLC, Arnie has the right to participate in the firm's management to any extent unless the operating agreement states otherwise. LLCs offer great flexibility regarding management and can elect to be member-managed or manager-managed. As a member-managed LLC, all members have equal rights in the management and operation of the business. Therefore, Arnie can participate in the management of the firm to any extent allowed by the operating agreement.

Question 17

Lightspeed Corporation and Mindful, Inc., two game creators, wish to combine their capabilities to make and market Nanoworld, a special limited-edition online game. The appropriate legal entity for this project is most likely

Accepted Answer

A joint venture is the most appropriate legal entity for this project as it allows both Lightspeed Corporation and Mindful, Inc. to combine their capabilities, resources, and expertise to develop and market Nanoworld while sharing the risks and rewards of the venture. A business trust, joint stock company, and syndicate are not suitable for this project as they do not offer the same level of collaboration and shared ownership as a joint venture.

Question 18

Rural Residential Development Company and Suburban Real Estate Corporation form a joint stock company. A joint stock company can be formed for, at the most,

Accepted Answer

A joint stock company can have a perpetual existence, meaning it can continue to exist indefinitely unless dissolved by law or by the decision of the shareholders. Therefore, the correct choice is B. The other options are incorrect as they limit the duration or purpose of the joint stock company.

Question 19

Custom Auto Body & Detailing, LLC, is a limited liability company. Its members include Dennis and Estelle. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as​

Accepted Answer

LLCs with more than one member are generally taxed as partnerships by default, unless they choose to be taxed as a corporation or elect for another tax status.

Question 20

Outreach Security & Rescue, LLC, is a limited liability company. Unless the members have agreed otherwise, participants in the firm's management will be considered to include

Accepted Answer

As a limited liability company, unless the members have agreed otherwise, all members will be considered to participate in the management of the firm.

Quiz 28: Limited Liability Companies and Special Business Forms

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint venture is usually formed for

Qatar Global Investments is a foreign entity-a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

IT Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is

Oil Reserves, Inc., and Petro Refining Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to

Lebron, Michael, Nolan, and O'Neill combine to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is

Greenway Corporation and Happy Trails, Inc., combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by

Western Rodeo LLC is a limited liability company (LLC) . Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of every state

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to

Arnie is a member of Bowling & Billiards, LLC. Arnie can participate in the firm's management

Lightspeed Corporation and Mindful, Inc., two game creators, wish to combine their capabilities to make and market Nanoworld, a special limited-edition online game. The appropriate legal entity for this project is most likely

Rural Residential Development Company and Suburban Real Estate Corporation form a joint stock company. A joint stock company can be formed for, at the most,

Custom Auto Body & Detailing, LLC, is a limited liability company. Its members include Dennis and Estelle. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as

Outreach Security & Rescue, LLC, is a limited liability company. Unless the members have agreed otherwise, participants in the firm's management will be considered to include

Quiz 28: Limited Liability Companies and Special Business Forms

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint venture is usually formed for

Qatar Global Investments is a foreign entity-a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

IT Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is

Oil Reserves, Inc., and Petro Refining Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to

Lebron, Michael, Nolan, and O'Neill combine to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is

Greenway Corporation and Happy Trails, Inc., combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is

StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by

Western Rodeo LLC is a limited liability company (LLC) . Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of every state

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to

Arnie is a member of Bowling & Billiards, LLC. Arnie can participate in the firm's management

Lightspeed Corporation and Mindful, Inc., two game creators, wish to combine their capabilities to make and market Nanoworld, a special limited-edition online game. The appropriate legal entity for this project is most likely

Rural Residential Development Company and Suburban Real Estate Corporation form a joint stock company. A joint stock company can be formed for, at the most,

Custom Auto Body & Detailing, LLC, is a limited liability company. Its members include Dennis and Estelle. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as​

Outreach Security & Rescue, LLC, is a limited liability company. Unless the members have agreed otherwise, participants in the firm's management will be considered to include

Custom Auto Body & Detailing, LLC, is a limited liability company. Its members include Dennis and Estelle. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as