Which of the following statements, if any, about an LLC is false?
A)An LLC is usually taxed like a partnership.
B)"Members" of an LLC generally have limited personal liability for debts of the LLC, except for the managing member who has unlimited liability for LLC debts.
C)"Members" of an LLC can participate in management of the LLC unless the member agrees not to participate.
D)An LLC can specially allocate income items, as long as the substantial economic effect rules of § 704(b) are followed.
E)None of the above statements is false.

Question

Quizplus · Accepted Answer

The statement "except for the managing member who has unlimited liability for LLC debts" is false. In an LLC, the managing member has the same limited personal liability for LLC debts as all other members. However, if a member of an LLC is also a manager, they may have personal liability for their own actions as a manager.

Which of the Following Statements, If Any, About an LLC