Exam (elaborations)

LABO Chapter 40 || with 100% Accurate Solutions.

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Module
LABO Chapter 40 |

Institution
LABO Chapter 40 |

ONE true statement about the duties of members and managers in a LLC is that they _______________. correct answers are fiduciaries of the company and its members According to the Revised Uniform Limited Liability Company Act (RULLCA), members of a limited liability company should _______________...

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one true statement about the duties of members and

Institution LABO Chapter 40 |
Module LABO Chapter 40 |

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LABO Chapter 40 || with 100% Accurate Solutions.
ONE true statement about the duties of members and managers in a LLC is that they
_______________. correct answers are fiduciaries of the company and its members

According to the Revised Uniform Limited Liability Company Act (RULLCA), members of a
limited liability company should _______________. correct answers share profits and other
distributions equally

According the the RULLCA, when a member transfers his or her transferable interest in an LLC
to another person, the transferee only has the right to _________________. correct answers
receive the transferring member's distributions

An incorrect statement regarding an LLC members' liability is that an LLC member(s)
_______________. correct answers has strict personal liability on all LLC contracts.

An incorrect statement regarding member dissociation from an LLC is that: correct answers the
RUPA governs member dissociation from a limited liability company.

What RULE (law) did the court apply in the Hecht v. Andover Assoc. Mgmt. Co case? (Choose
THREE correct answers) correct answers A trustee is under a duty to employ diligence and
prudence in the management of the trust estate.
The business judgment rule bars judicial inquiry into actions of corporate directors taken in good
faith and in the exercise of honest judgment
Gross negligence is conduct that is so careless as to show complete disregard for the rights and
safety of others.

________________________ is a true statement regarding the fiduciary duties of members and
managers of a limited liability company correct answers Each member in a member-managed
LLC and each manager in a manager-managed LLC is a fiduciary of the LLC and its members

A member's most important right in a limited liability company is the right to _______________.
correct answers receive distributions from the company

An incorrect statement regarding a member's transfer of his or her transferable interest in a
limited liability company to another person is _______________. correct answers under the
RULLCA, a member may not transfer his or her transferable interest in a LLC to a person
outside the organization

When a member's dissociation from an LLC is wrongful, the dissociating member
____________. correct answers is liable to the LLC for damages caused by the dissociation

_______________________, is an incorrect statement regarding dissolution of an LLC. correct
answers When an LLC member withdraws from the LLC, the LLC's business will end, thereby
terminating its going concern value

, What was the court's ANALYSIS (legal reasoning) in the Hecht v. Andover Assoc. Mgmt. Co
case? (Choose THREE correct answers) correct answers Andover argues the business judgment
rule insulates their decisions to utilize Ivy as investment consultant and Madoff as investment
manager.
Andover breached the duty of diligence by delegating management of their investment to Madoff
without conducting an adequate investigation
Hecht alleges there were no trade tickets, or any other documentation, to substantiate the trades.

If an LLC is at will and is not dissolved, the LLC must __________. correct answers purchase a
dissociated member's interest at fair value within 120 days after the member's dissociation

_______________ is regarded as a wrongful dissociation from an LLC. correct answers The
withdrawal of a partner before the company's term expires

A company that __________ is least likely to cause a judicial dissolution of an LLC upon the
request of a dissociated member. correct answers has settled its debts to creditors

What was the main ISSUE (legal question) the court asked in the Hecht v. Andover Assoc.
Mgmt. Co. case? correct answers Whether the business judgment rule insulates Andover's
decisions to utilize Ivy as its investment consultant and Madoff as its investment manager.

ONE true statement about dissociated members in an LLC is that: _______________. correct
answers they are not entitled to receive the value of their LLC interest until the LLC dissolves.

A member's most important right in a limited liability company is the right to _______________.
correct answers receive distributions from the company

After all the limited liability company (LLC) assets have been sold, the remaining proceeds other
than the ones given to creditors are distributed among members of the company based on
________________. correct answers how they share profits

_______________ is most likely to cause dissolution of a LLC. correct answers An
administrative decision by the secretary of state

What RULE (law) did the court apply in the McDonough v. McDonough case? (Choose TWO
correct answers) correct answers TASC's operating agreement and the Act provide such a way
for TASC's members to continue the company.
An LLC shall be dissolved as provided in the operating agreement.

In the context of the forms of business ownership, a(n) __________ has a basic default structure
that serves the needs of both investors and managers. correct answers limited partnership

After all the LLC's assets are sold, the proceeds are distributed first to the _____________ of the
company. correct answers creditors

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