[Drone Debacle] Bruno and Martin run Skyview, LLC, a drone company that takes aerial photographs. After an accident with the drone, Bruno tells Martin that he does not want to be involved in management any longer. Martin tells Bruno that if he stops participating in management, they will no longer be protected by the limited liability of an LLC. Bruno says that if there is a lawsuit, they are both equally liable. Martin replies that if Bruno wants, he could be a limited LLC member and then he won't have a say in the company.
-Is Martin correct that they will lost the protection of limited liability if Bruno ceases participating in management decisions?
A) Yes, an owner must give up his right to participate in management in order for an LLC to obtain limited liability.
B) Yes, like a limited partnership, there is no limited liability unless Bruno is a limited member.
C) No, an owner does not have to give up his right to participate in management in order for an LLC to obtain limited liability.
D) Yes, if an LLC member who participated in management chooses to give up this right, the LLC could lose protection.
E) Martin would be correct if Bruno seeks dissolution.
Correct Answer:
Verified
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