Asked by Johnna-Bryante Rayphen on Jun 10, 2024
Verified
Which of the following is NOT an essential characteristic of a limited liability company (LLC) ?
A) The LLC can elect to be taxed as a partnership or a corporation.
B) Members' ownership interest is completely and freely transferable.
C) Members have limited liability for the obligations of the LLC.
D) The bankruptcy of one member does not dissolve the LLC.
Limited Liability Company
A Limited Liability Company (LLC) is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
Members' Ownership
Refers to the proportional interest or share that members have in an organization, cooperative, or partnership, reflecting their stake or investment.
- Acquire knowledge of the distinct attributes and frameworks of various commercial organizations, including corporations, sole proprietorships, partnerships, and limited liability companies (LLCs).
Verified Answer
EC
Ellvy CerraJun 11, 2024
Final Answer :
B
Explanation :
There is limited free transferability of the LLC members' ownership interests.Transfer of a membership interest entitles the transferee to receive only the member's distributions from the LLC,unless all members or the LLC agreement permits the transferee to become a member.
Learning Objectives
- Acquire knowledge of the distinct attributes and frameworks of various commercial organizations, including corporations, sole proprietorships, partnerships, and limited liability companies (LLCs).