Which of the Following Is NOT True About a Limited

question 11

Multiple Choice

Which of the following is NOT true about a limited liability company?

• A) It is a noncorporate business organization.
• B) In most states, an LLC must have at least two members.
• C) It may elect not to be a separate taxable entity.
• D) An ownership interest may be considered a security.

---

Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them ownership interest.

Form 1099-DIV

A tax form issued by banks and financial institutions to investors who receive dividends and distributions from any type of investment during a calendar year.

Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.

Tax-exempt Interest

Interest income that is not subject to federal income tax, such as that earned from certain municipal bonds.