Which of the Following Is True Regarding Any Duty of Care

question 49

Multiple Choice

Which of the following is true regarding any duty of care owed by members of "member- managed" and "manager-managed" limited liability companies?

• A) Members of both "member-managed" limited liability companies and "manager-managed" limited liability companies owe a duty of care not to engage in grossly negligent conduct that would injure their companies.
• B) Members of "member-managed" limited liability companies owe a duty of care not to engage in grossly negligent conduct that would injure their companies, but members of manager-managed limited liability companies owe no such duty, so long as the members do not act as managers.
• C) Members of "manager-managed" companies owe a duty of care not to engage in grossly negligent conduct that would injure their companies, but members of "member-managed" companies owe no such duty.
• D) Neither members of "member-managed" nor "manager-managed" limited liability companies owe a duty of care to their respective companies.
• E) Any duty of care owed by members of "member-managed" and "manager-managed" limited liability companies relates to a corresponding duty of loyalty.

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Definitions:

Excess Burden

The cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium.

Tax Revenue

The income that is collected by the government through various forms of taxation.

Excess Burden

The expense incurred by society due to market inefficiency, happening when there's a mismatch between supply and demand.

Tax Revenue

The earnings achieved by governments by levying taxes.