Which of the Following Statements, If Any, About a Multi-Member

question 128

Multiple Choice

Which of the following statements, if any, about a multi-member LLC is false?

• A)A multi-member LLC is usually taxed like a partnership.
• B)"Members" of an LLC generally have limited personal liability for debts of the LLC, except for the managing member who has unlimited liability for LLC debts.
• C)"Members" of an LLC can participate in management of the LLC unless the member agrees not to participate.
• D)An LLC can specially allocate income items, as long as the substantial economic effect rules of § 704(b) are followed.
• E)None of the above statements is false.

---

Definitions:

Corporation

A legal entity recognized by law as a separate entity from its owners, providing limited liability but allowing it to enter into contracts, sue, and be sued.

Sole Proprietor

A business structure where a single individual owns, manages, and bears the responsibilities for all aspects of the business.

Limited Liability

A legal status where a person's financial responsibility is limited to a fixed amount, usually the value of their investment in a company or partnership.

Torts

Civil wrongdoings recognized by law as grounds for a lawsuit, resulting in injury or harm that constitutes the basis for a claim by the injured party.