Asked by Tmobile Oakland on May 10, 2024
Verified
Johnathan LLC has a term of eight years.It had only two partners,Jonathan and John,in its first five years of existence.It was not dissolved when John withdrew from membership in the sixth year.The LLC has continued its business and Johnathan has agreed to pay John,as per the provisions of the RULLCA.Consequently,Johnathan is obligated to pay John the value of his interest within:
A) 120 days after John's dissociation.
B) 90 days after John's dissociation.
C) 120 days after the end of the LLC's term.
D) 90 days after the end of the LLC's term.
RULLCA
An abbreviation for the Revised Uniform Limited Liability Company Act, which provides a legal framework for the formation and operation of LLCs in jurisdictions that have adopted it.
Interest
The cost of borrowing money, typically expressed as a percentage of the principal, or the income generated from an investment.
Dissociation
The process of a member withdrawing from a partnership or a member's interest being terminated, affecting the relationship between the members of a business entity.
- Comprehend the procedure and hierarchy involved in the distribution of debts and assets after an LLC is dissolved.
- Determine the functions and entitlements of participants in an LLC.
Verified Answer
MV
Miloslav VojtaMay 11, 2024
Final Answer :
C
Explanation :
If the LLC is at will and is not dissolved,the LLC must purchase his interest at fair value within 120 days after the member's dissociation.If the LLC has a term,however,and is not dissolved,the LLC may continue its business and pay the dissociated member the value of his interest within 120 days after the end of the LLC's term.
Learning Objectives
- Comprehend the procedure and hierarchy involved in the distribution of debts and assets after an LLC is dissolved.
- Determine the functions and entitlements of participants in an LLC.