To Form a Limited Liability Company, an Entrepreneur Must File

question 34

True/False

To form a limited liability company, an entrepreneur must file both the articles of incorporation and the operating agreement with the secretary of state.

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Definitions:

Accounting Equation

The fundamental principle of accounting that states Assets = Liabilities + Equity, which must always be in balance for accurate financial reporting.

Net Income

Net income is the total profit of a company after all expenses, including taxes and operational costs, are subtracted from its total revenue.

Total Liabilities

The sum of all financial obligations a company has to external parties, including both short-term and long-term debts.

Accounting Equation

The fundamental formula in accounting that states assets equal liabilities plus equity (Assets = Liabilities + Equity).