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Gerard and Tony Organize an LLC (Limited Liability Company)by Investing

Question 34

Multiple Choice

Gerard and Tony organize an LLC (limited liability company) by investing $55,000 and $45,000 respectively.The operating agreement states that profits are to be shared in the ratio of 55:45 between Gerard and Tony and makes no mention of sharing losses.The LLC incurs a loss of $100,000 in its first year.How is this loss shared?


A) Both Gerard and Tony have to pay $50,000 each.
B) Gerard pays $55,000, while Tony pays $45,000.
C) Gerard pays $45,000, while Tony pays $55,000.
D) Gerard and Tony are not liable for the losses of the LLC.

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