Barry,Harry,and Larry Form an LLC

question 3

Multiple Choice

Barry,Harry,and Larry form an LLC.Barry contributes $100,000 in capital and the other two contribute $50,000 each.This LLC was structured as a manager-managed LLC with Harry designated as the manager.In reality,during the first year the three members actively took part in the management of the LLC.In fact,of the total time spent by the members managing the business,60 percent of the time was spent by Larry,with Barry and Harry each contributing 20 percent of the time.The LLC was unexpectedly profitable in the first year and the members are in dispute over the allocation of profits.There are no provisions in their operating agreement covering profit allocations.Which of the following is true?

• A) The members will divide all profits equally.
• B) The members will divide all profits in accordance with their capital contributions.
• C) The members are each entitled to an allocation based on the value of the services that each provided,with the residual allocated equally.
• D) Harry,but not Barry or Larry,is entitled to an allocation based on the value of his services provided,with the residual allocated equally.
• E) Larry,but not Barry or Harry,is entitled to an allocation based on the value of his services provided,with the residual allocated equally.

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Definitions:

Germinal Zygote

A term describing the earliest stage of embryonic development, immediately following fertilization of an egg by a sperm.

Child-Rearing Styles

Child-Rearing Styles refer to the approaches parents use to guide, discipline, and nurture their children; major types include authoritative, authoritarian, permissive, and neglectful.

Autonomy

The capacity to make an informed, uncoerced decision; often associated with independence and self-governance.

Erikson's

Relates to the theories of developmental psychologist Erik Erikson, focusing on psychosocial development across eight stages from infancy to adulthood.