In Which of the Following Cases Does the Conversion of an Existing

question 27

Multiple Choice

In which of the following cases does the conversion of an existing business to an LLC take effect?

• A) when the articles of organization are filed with the secretary of state
• B) when the members enter into an agreement of conversion
• C) when an operating agreement is finalized by the members
• D) when the first certificate of interest is issued

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Definitions:

Interest Allowance

A deduction or allocation of interest expense, often related to tax calculations or financial assistance programs.

Net Income

Net income refers to the total earnings of a company once all costs, taxes, and expenses have been deducted from the overall revenue.

Retirement

The act of leaving one's job and ceasing to work, typically upon reaching a certain age or for health reasons.

Capital Balances

The amount of capital that remains in a partnership or firm after liabilities have been accounted for, representing the owners' equity.