Limited liability companies (LLCs) - Next Generation Bar Exam
- Under ULLCA (2013), how is an LLC managed by default?
- By its members. An LLC is manager-managed only if the operating agreement so provides.
- What is the legal status of an LLC under ULLCA (2013)?
- An entity distinct from its members. The LLC can own property, contract, and sue and be sued in its own name.
- Under ULLCA (2013), how are distributions before dissolution shared by default?
- Equally among the members. Default sharing is per capita, not according to contributions, unless the operating agreement says otherwise.
- Under ULLCA (2013), what governs the relations among an LLC's members and the company?
- The operating agreement, which may be oral, implied, or written. Statutory default rules apply where the operating agreement is silent.
- Under ULLCA (2013), what vote is required to admit a new member by default?
- The consent of all members. The operating agreement may provide otherwise.
- Under ULLCA (2013), when may a member dissociate?
- At any time, by express will, though dissociation in breach of the operating agreement is wrongful. A dissociated member does not have a statutory right to a buyout of its interest.
- What is the remedy of a judgment creditor of an LLC member against the member's interest?
- A charging order on the member's transferable interest. The creditor receives distributions owed to the member but cannot reach LLC assets or manage the company.
- A judgment creditor of an LLC member seeks to seize equipment owned by the LLC. What is the creditor limited to?
- A charging order on the member's distributions. LLC property belongs to the company, not to its members.
- How is an LLC formed?
- By filing a certificate (articles) of organization with the state. The LLC exists when the filing becomes effective.
- Under ULLCA (2013), what does a transferee of a member's interest receive?
- Only the right to receive distributions. A transferee does not become a member and has no management rights.