Which of the Following Is False Regarding Limited Liability Companies

question 49

Multiple Choice

Which of the following is false regarding limited liability companies?

• A) Members need not be citizens of the U.S.
• B) Limited liability companies have the limited liability of corporations yet may be taxed like partnerships.
• C) A limited liability company is formed by filing articles of organization in the state in which members want to establish their LLC.
• D) For purposes of jurisdiction, an LLC is considered a citizen of every state in which its members reside.
• E) Owners of an LLC are referred to as incorporators.

---

Definitions:

Capital Lease

A lease agreement that transfers substantially all the risks and rewards of ownership of the asset to the lessee, effectively treated as a purchase of the asset.

Periodic Cash Payments

Payments made regularly over a period of time, such as dividends or loan repayments.

Lease Rental Expense

An expense incurred from leasing an asset, which is typically recorded on a lessee's income statement.

Lease Liability

An obligation representing the present value of leasing payments due under a lease agreement.