A manager-managed LLC has three passive members and one appointed manager. The manager approves a related-party services contract without disclosure. Which statement is most accurate about fiduciary duties? The correct a...
Citations: Revised Uniform Limited Liability Company Act principles
Copper Trail LLC is manager-managed. Its operating agreement states: "Members and managers may own outside businesses, but all company transactions must be conducted in good faith." The agreement does not specifically ad...
Citations: Revised Uniform Limited Liability Company Act principles, NCBE MEE Business Associations outline
...ility company has members who are citizens of States A, B, and C. The LLC was organized in State D and has its headquarters in State E. What is the LLC's citizenship for diversity purposes? The correct answer states the...
Citations: Carden v. Arkoma Associates, Section 1332 diversity principles
A member of an LLC gives notice that she withdraws as a member. The operating agreement does not say that withdrawal dissolves the LLC. Which statement is most accurate? The correct answer states the key distinction betw...
Citations: Revised Uniform Limited Liability Company Act principles
A judgment creditor of an LLC member seeks to collect from the member's LLC interest. What is the usual effect of a charging order? The correct answer describes the usual limited remedy of a charging order. Revised Unifo...
Citations: Revised Uniform Limited Liability Company Act principles
A lender makes a loan to an LLC. One member signs the note on behalf of the LLC and also signs a separate section labeled "personal guaranty." Which statement is most accurate? The correct answer recognizes that the liab...
Citations: General limited-liability entity principles
A member sells "my LLC interest" to an investor. The operating agreement requires unanimous consent to admit a new member, and the other members do not consent. What rights does the investor generally receive? The correc...
Citations: Revised Uniform Limited Liability Company Act principles
A member-managed LLC operates a small landscaping business. One member signs a routine contract to buy mulch for current jobs. Which statement best describes the member's authority? The correct answer states the ordinary...
Citations: Revised Uniform Limited Liability Company Act principles
An LLC defaults on an ordinary supplier invoice. The supplier sues a member personally solely because the person owns a membership interest. Which statement is most accurate? The correct answer states the basic member li...
Citations: Revised Uniform Limited Liability Company Act principles
An LLC's members vote to distribute nearly all company cash while several large invoices are due next week. Which statement best describes a statutory limit on LLC distributions? The correct answer states the usual statu...
Citations: Revised Uniform Limited Liability Company Act principles
An LLC's operating agreement and filed statement identify it as manager-managed. A passive member, who is not a manager, signs a new supplier contract without approval. Which statement is most accurate? The correct answe...
Citations: Revised Uniform Limited Liability Company Act principles
BlueCrate LLC was formed to sell custom storage boxes. Its two members each contributed $500, kept no separate bank account for the first six months, and paid personal expenses from customer receipts. One member, Luis, s...
Citations: Revised Uniform Limited Liability Company Act principles, General limited-liability entity principles
Granite Trail LLC operates a bicycle-repair shop. Its operating agreement states that the LLC is member-managed and that ordinary purchases may be approved by either member, but sales of substantially all assets require...
Citations: Revised Uniform Limited Liability Company Act principles, Agency principles for entity authority
RiverDock LLC has three equal members. Its operating agreement provides that no person may become a member without unanimous member consent, but it does not restrict transfers of economic interests. Member Sloane sold "a...
Citations: Revised Uniform Limited Liability Company Act principles
StoneMill LLC has four members and operates a profitable bakery. Its operating agreement states that no member may withdraw during the first two years except with unanimous consent, and that the LLC dissolves only upon u...
Citations: Revised Uniform Limited Liability Company Act principles
Two LLC members ask what legal role their operating agreement plays after the LLC has been formed. Which statement is most accurate? The correct answer states the role of the operating agreement in LLC governance. Revise...
Citations: Revised Uniform Limited Liability Company Act principles
Amara sued Delta Drones, Inc. and LiftPoint LLC in federal district court, invoking diversity jurisdiction. Amara has lived in State A for six years, owns a home there, votes there, and intends to remain there. Delta Dro...
Citations: 28 U.S.C. 1332, Hertz Corp. v. Friend, Carden v. Arkoma Associates
Maya and Theo planned to open a meal-prep business as HarvestBox LLC. Before any filing, Maya signed a six-month kitchen lease "for HarvestBox LLC, by Maya, organizer." She told the landlord that the LLC paperwork would...
Citations: Revised Uniform Limited Liability Company Act principles, NCBE MEE Business Associations outline
...rmal step. Which statement is most accurate? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
...ow should the issue most likely be resolved? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
...the strongest reason for the likely result? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
...est protects the legally relevant interests? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
...t treatment of the proof and governing rule? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
...g to the problem. What is the best analysis? Correct. Corporation and LLC disputes depend on formation, authority, fiduciary duties, business judgment protection, conflicts, owner rights, derivative procedures, veil pier...
Citations: MBCA and LLC principles, Business judgment rule, Derivative action doctrine
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