An LLC Differs from a Sole Proprietorship in That It

question 44

Multiple Choice

An LLC differs from a sole proprietorship in that it ________.

• A) gives nonmanager members rights to manage a manager-managed LLC's business affairs
• B) is less complex and costly to form than a sole proprietorship
• C) can be owned by one owner in most states and can thus obtain limited liability
• D) requires at least one member who is personally liable for the obligations of the partnership

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Definitions:

Voting Rights

The entitlement of shareholders to vote on corporate matters and decisions during stockholders' meetings.

Additional Paid-In Capital

The amount of capital contributed by shareholders above the par value of the shares.

Treasury Stock

Refers to shares that were once part of the outstanding shares but were bought back by the company, reducing the amount of stock on the open market.

Par Value

A nominal value of a security, such as a bond or stock, which is set by the issuing company and does not necessarily reflect its market value.