Harrison and Susie Form a Limited Liability Corporation

question 35

Multiple Choice

Harrison and Susie form a limited liability corporation.Harrison makes a capital contribution of $90,000,and Susie makes a capital contribution of $10,000.They have no agreement as to how profits are to be shared.If the limited liability company makes $100,000 in profits in its first year,under the Uniform Limited Liability Act,how will the profits be divided?

• A) Harrison will receive $50,000, and Susie will receive $50,000.
• B) Harrison will receive $90,000, and Susie will receive $10,000.
• C) Pursuant to the requirements of the Uniform Limited Liability Act, they will divide the profits after twenty percent of the profits are reinvested in the company.
• D) Pursuant to the Uniform Limited Liability Act, they will divide the profits consistent with their respective proportional capital contributions, after twenty percent of the profits are reinvested in the company.
• E) The first $100,000 of earnings must be reinvested in the company.

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Definitions:

Time Urgency

A psychological state characterized by ongoing feelings of being pressured by time or of being in a constant rush.

Competition

The process or state of attempting to achieve or secure something through overcoming or proving dominance over others.

Psychological Therapy

A general term referring to therapeutic interaction or treatment between a trained professional and a client, patient, family, couple, or group.

Psychological Treatment

The use of psychological methods, particularly when based on regular personal interaction, to help a person change behavior and overcome problems in desired ways.