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Brief Hypothetical 32.1
Terms in this set (11)
Tuller wants to start a commercial trucking business and also wants to form his own limited liability company (LLC). Tuller, as the only member of the LLC, will make all relevant decisions, contribute all of the investment, and be responsible for all of the risks and rewards. Tuller's proposed LLC will be accepted by:
a majority of states
Marvin and Maria start selling handmade jewelry to distributors nationwide, and intend to form an LLC. Marvin and Maria enter into four contracts with distributors while the LLC is in the process of being formed but before the LLC is formally in existence. Once Marvin and Maria form the LLC:
once the LLC is formed and adopts the contracts, it can then enforce the contract terms.
Charlotte and Regina are opening a new business venture to sell gourmet cupcakes. One of the important characteristics in starting a limited liability company is:
limited liability for members
Mary, Thomas, and Franklin form an LLC for the purpose of running a restaurant. Each invests $10,000 into the LLC. Two weeks after the LLC is formed, Joanne patronizes the restaurant and suffers from severe food poisoning. If Joanne sues the LLC,
the members could be liable for $10,000 each, the amount of their investment.
The seven members of Fast Commerce, LLC, want to start their company as quickly as possible. The members, in their haste, do not bother to draft an operating agreement. If a dispute arises between two of the members:
the state LLC statute will apply to the dispute.
Tyler and Stanton are members of an LLC. They have no operating agreement. Tyler and Stanton have a dispute. They look to the LLC statute for an answer, but the statute does not cover this situation. In this case, courts often:
apply state partnership law
Matt and Chad form an LLC, and Matt later decides to withdraw as a member. They do not have a provision in their operating agreement regarding withdrawal of a member, but they do live in a state that has adopted the ULLCA, which means that:
the LLC must purchase Matt's interest at fair value within 120 days.
Creative Concepts Co. and Retail Investment, Inc., form a joint venture to purchase and sell high-end real estate to foreign buyers. Creative Concepts contributes $400,000 in capital, and Retail Investment contributes $600,000 in capital. The first year resulted in $2,000,000 in profits. Unless otherwise agreed, joint venturers:
share profits and losses equally.
Abby and Zeke begin a joint venture together selling fruitcakes door to door. Each invests $500. The joint venture generates large debts, and there is not sufficient income from the joint venture to pay them. Abby and Zeke as joint venturers are:
A group of fifty homeschooling parents in New Jersey get together and form a nonprofit membership organization for the purpose of buying teaching materials and supplies at a discount and selling the materials and supplies to members. The parents have probably formed a:
Product Management, LLC, has forty members. Two of the members died the previous year. Under the Uniform Limited Liability Company Act (ULLCA), on the death of the two members:
the other members may continue to carry on the LLC's business unless the operating agreement provides otherwise
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