LAW 3220 CHAPTER 14 EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
The ULCCA is the model statute used by most _________ to govern LLCs. - Answers States
LLCs and LLPs were created to allow business principals to avoid double _________ while still
providing limited liability. - Answers Taxation
A business entity that shares characteristics of both partnerships and corporations is a LLC, or limited
liability ________. - Answers Company
State laws that govern LLCs include provisions for both initial _______ of the LLCs and the default
rules in case the owners do not set their own standards of operation. - Answers Formation
The business form that provides some liability protection for partners in a general partnership is a
________. - Answers Limited Liability Partnership (LLP)
A limited liability company (LLC) offers its principals the same amount of liability protection afforded
to principals of a(n) ____________. - Answers Corporation
Articles or certificates of organization are filed with the state to create a(n) ___________ - Answers
LLC
Basic information required by the state to create an LLC typically includes the ________ of the
business, its principal location, and the names of its members. - Answers Name
The members of an LLC agree on how to operate the business in a(n) ____________ agreement. -
Answers Operating
The "limited" in LLC refers to the idea that LLC members are protected from ____________ liability
for any business debt or liability if the venture fails. - Answers Personal
If an LLC has no operating agreement, it will be governed by the default rules set out by the state's
LLC ____________. - Answers Statute
Before lending an LLC money, a lender may require the owners to provide a personal __________ so
that the owner will still be liable for the company's debt. - Answers Guarantee
LLCs may select between being taxed as a partnership or as a(n): - Answers Corporation
IF an LLC has total assets less than the sum of its liabilities and it cannot pay its debts in the ordinary
course of business, the LLC is considered ___________ under the RULLCA. - Answers Insolvent
Debt and the sale of equity ownership are the primary ways an LLC is ________________. - Answers
Capitalized
Managers of an LLC owe the members the __________ duties of care and loyalty. - Answers Fiduciary
____________ of an LLC is a liquidation or termination process that will close the business. - Answers
Dissolution
The protections from personal liability provided by a limited liability partnership ____________ the
same in each state. - Answers Are not
The ____________ agreement of the LLP often controls the amount and methods of capitalizing the
business. - Answers Partnership
Owners of an LLC owe each other the fiduciary duties of care and ___________. - Answers Loyalty
Two options for the management of an LLC are to be __________-managed or __________-managed.
- Answers Member, Manager
Partners in a general partnership may wish to convert to an LLP in order to avoid the _________
liability they could otherwise incur for each other's mistakes, or for the partnership debts. - Answers
Potential
If LLC members have engaged in fraud or other bad conduct, a court may rely on ___________ as the
rationale to require members to compensate damaged parties. - Answers Fairness
Partners in a limited liability partnership (LLP) may establish rules to run the business, establish
governing bodies, and plan for capital calls in the _________. - Answers Partnership Agreement
LLPs obtain capital through debt or through selling __________ ______________ for ownership in the
LLP itself. - Answers Partnership equity
What form should a general partnership file in order to become a limited liability partnership (LLP)? -
Answers Statement of Qualification
An LLC operating agreement will often include provisions for day-to-day operations, as well as what
will happen on the __________________ or end of the LLC. - Answers Dissolution
One party may ask a court to clarify what the law says, i.e., what the various parties' rights and
obligations are, by seeking a __________ judgement from the court, before proceeding with further
legal action. - Answers Declaratory
The ULCCA is the model statute used by most _________ to govern LLCs. - Answers States
LLCs and LLPs were created to allow business principals to avoid double _________ while still
providing limited liability. - Answers Taxation
A business entity that shares characteristics of both partnerships and corporations is a LLC, or limited
liability ________. - Answers Company
State laws that govern LLCs include provisions for both initial _______ of the LLCs and the default
rules in case the owners do not set their own standards of operation. - Answers Formation
The business form that provides some liability protection for partners in a general partnership is a
________. - Answers Limited Liability Partnership (LLP)
A limited liability company (LLC) offers its principals the same amount of liability protection afforded
to principals of a(n) ____________. - Answers Corporation
Articles or certificates of organization are filed with the state to create a(n) ___________ - Answers
LLC
Basic information required by the state to create an LLC typically includes the ________ of the
business, its principal location, and the names of its members. - Answers Name
The members of an LLC agree on how to operate the business in a(n) ____________ agreement. -
Answers Operating
The "limited" in LLC refers to the idea that LLC members are protected from ____________ liability
for any business debt or liability if the venture fails. - Answers Personal
If an LLC has no operating agreement, it will be governed by the default rules set out by the state's
LLC ____________. - Answers Statute
Before lending an LLC money, a lender may require the owners to provide a personal __________ so
that the owner will still be liable for the company's debt. - Answers Guarantee
LLCs may select between being taxed as a partnership or as a(n): - Answers Corporation
IF an LLC has total assets less than the sum of its liabilities and it cannot pay its debts in the ordinary
course of business, the LLC is considered ___________ under the RULLCA. - Answers Insolvent
Debt and the sale of equity ownership are the primary ways an LLC is ________________. - Answers
Capitalized
Managers of an LLC owe the members the __________ duties of care and loyalty. - Answers Fiduciary
____________ of an LLC is a liquidation or termination process that will close the business. - Answers
Dissolution
The protections from personal liability provided by a limited liability partnership ____________ the
same in each state. - Answers Are not
The ____________ agreement of the LLP often controls the amount and methods of capitalizing the
business. - Answers Partnership
Owners of an LLC owe each other the fiduciary duties of care and ___________. - Answers Loyalty
Two options for the management of an LLC are to be __________-managed or __________-managed.
- Answers Member, Manager
Partners in a general partnership may wish to convert to an LLP in order to avoid the _________
liability they could otherwise incur for each other's mistakes, or for the partnership debts. - Answers
Potential
If LLC members have engaged in fraud or other bad conduct, a court may rely on ___________ as the
rationale to require members to compensate damaged parties. - Answers Fairness
Partners in a limited liability partnership (LLP) may establish rules to run the business, establish
governing bodies, and plan for capital calls in the _________. - Answers Partnership Agreement
LLPs obtain capital through debt or through selling __________ ______________ for ownership in the
LLP itself. - Answers Partnership equity
What form should a general partnership file in order to become a limited liability partnership (LLP)? -
Answers Statement of Qualification
An LLC operating agreement will often include provisions for day-to-day operations, as well as what
will happen on the __________________ or end of the LLC. - Answers Dissolution
One party may ask a court to clarify what the law says, i.e., what the various parties' rights and
obligations are, by seeking a __________ judgement from the court, before proceeding with further
legal action. - Answers Declaratory
