Joshua,Rachel,and Daniel formed an LLC to manage their accounting business.Joshua contributed $20,000 to the LLC.Rachel and Daniel contributed $40,000 each.A year later,the LLC needed capital injection and Joshua lent a credit of $50,000.However,nothing could save the LLC and it entered bankruptcy and got dissolved.Joshua was the only creditor of the LLC.If a total of $50,000 was obtained after the sale of all the assets of the dissolved LLC,how much will Rachel get?

Question

Quizplus · Accepted Answer

According to the RULLCA,after all the LLC assets have been sold,the proceeds should be distributed first to LLC creditors,including members who are creditors.Since Joshua had given the LLC a credit of $50,000 and a total of $50,000 was obtained after sale of all the assets of the dissolved LLC,Joshua will get $50,000 and Rachel will get nothing.

Joshua,Rachel,and Daniel Formed an LLC to Manage Their Accounting Business