Asked by Mireille Mathieu Ebode Nkoudou on Jul 04, 2024
Verified
Which of the following is true about an LLC?
A) To obtain limited liability, owners must give up some of their rights to participate in management.
B) The structure of management must adhere to statutory constraints.
C) Owners are referred to as partners.
D) Generally, each member may be allowed to participate in the management of the company
E) Members are not equally involved in the management of the company.
Limited Liability
A legal principle that limits the amount of financial risk and responsibility of investors or partners in a company to the amount of their investment.
Management Participation
Management participation involves the active engagement and involvement of a company's management team in its day-to-day operations and decision-making processes.
LLC Members
Individuals or entities that own a part of a Limited Liability Company and have rights and responsibilities as outlined in the LLC's operating agreement.
- Clearly distinguish between partnership categories such as general and limited, in terms of their management styles and liability setups.
Verified Answer
ZK
Zybrea KnightJul 08, 2024
Final Answer :
D
Explanation :
LLCs (Limited Liability Companies) offer a flexible management structure, allowing all members to participate in the management of the company unless the LLC's operating agreement specifies otherwise. This flexibility is one of the key features that distinguish LLCs from other business entities, such as corporations, which have a more rigid management structure.
Learning Objectives
- Clearly distinguish between partnership categories such as general and limited, in terms of their management styles and liability setups.