Which of the Following Is True of an LLC Formation

question 16

Multiple Choice

Which of the following is true of an LLC formation?

• A) Doctors and lawyers cannot operate practices as LLCs.
• B) An LLC has to be organized in every state that it operates.
• C) "Inc." and "Ltd." can both be used to denote an LLC.
• D) An LLC can conduct business only in the state where it is organized.

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.

Cash Dividend

A payment made by a company out of its profits to shareholders, usually in the form of cash.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits via dividends.

Available-for-sale Securities

Financial assets that are not classified as held-for-trading or held-to-maturity, and can be sold in the market.