Bar Exam (Uniform) Quiz: Llc Governance

20 questions · exam conditions

0:00

Llc GovernanceQuestion 1 of 20

A client is a minority member in a successful, manager-managed LLC. She suspects the majority member, who is also the sole manager, of using LLC funds to pay for personal expenses. She has requested access to the LLC's financial records, including bank statements and expense reports for the past two years. The manager has refused, citing a clause in the operating agreement that states, "The manager shall have sole discretion over the business and its records, and members shall have no right to inspect company records without the manager's express consent." The client wants to file a lawsuit to compel inspection.

What is the likely outcome of the client's lawsuit? Select one.

The suit will be dismissed, because the operating agreement explicitly waives the members' right to inspect records.

The suit will succeed, because a member's right to inspect records for a proper purpose cannot be unreasonably restricted by the operating agreement.

The suit will be dismissed, because only members in a member-managed LLC have a statutory right to inspect records.

The suit will succeed only if the client can first present concrete evidence of fraud, rather than mere suspicion.

← Back to quizzes

Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Llc Governance

Practice Llc Governance in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Llc Governance, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

What is the likely outcome of the client's lawsuit? Select one.

The suit will be dismissed, because the operating agreement explicitly waives the members' right to inspect records.
The suit will succeed, because a member's right to inspect records for a proper purpose cannot be unreasonably restricted by the operating agreement. (correct answer)
The suit will be dismissed, because only members in a member-managed LLC have a statutory right to inspect records.
The suit will succeed only if the client can first present concrete evidence of fraud, rather than mere suspicion.

Explanation: The correct answer is B. The ULLCA provides members with a statutory right to inspect company records, and this right cannot be 'unreasonably restricted' by the operating agreement. A provision that completely eliminates the right of inspection and leaves it to the sole discretion of the manager who is suspected of wrongdoing would almost certainly be found to be an unreasonable restriction. The client's purpose—investigating potential mismanagement or breach of fiduciary duty—is a proper purpose. (A) is incorrect because this statutory right is one of the few provisions that cannot be completely bargained away in the operating agreement. (C) is incorrect because the right of inspection applies to members in both member-managed and manager-managed LLCs. (D) is incorrect because the standard for inspection is a proper purpose based on a credible basis of suspicion, not a requirement to prove the underlying fraud before being allowed to see the records that would prove it.

Question 2

You are forming a manager-managed LLC for a group of real estate investors. The designated manager is a highly experienced developer who will run the day-to-day operations. The other members are passive investors and want to limit their exposure to the manager's decisions. They have proposed a provision for the operating agreement stating: "The manager shall not be liable to the LLC or its members for any losses sustained through any act or omission if the manager acted in good faith." The jurisdiction has adopted the ULLCA.

What is the best advice to give your clients regarding this proposed provision? Select one.

The provision is enforceable as written because the ULLCA allows operating agreements to alter or eliminate the manager's fiduciary duties.
The provision is unenforceable because operating agreements cannot alter the manager's duty of care, which includes liability for ordinary negligence.
The provision is likely enforceable, as it properly limits liability for breaches of the duty of care but does not eliminate liability for bad faith or willful misconduct. (correct answer)
The provision is unenforceable because the ULLCA requires managers to be held liable for any action that is not in the best interests of the company.

Explanation: The correct answer is C. The ULLCA allows the operating agreement to alter the duty of care, except to authorize intentional misconduct or knowing violations of law. Many states interpret the duty of care as preventing liability for simple negligence, holding fiduciaries liable only for gross negligence, reckless conduct, or intentional misconduct. The proposed provision, which exculpates the manager for acts done in 'good faith,' effectively shields the manager from liability for simple negligence while preserving liability for actions taken in bad faith, which would violate the duty of loyalty, or for willful misconduct, which would violate the irreducible minimum of the duty of care. (A) is incorrect because the ULLCA does not permit the complete elimination of all fiduciary duties (e.g., the duty of loyalty). (B) is incorrect because the duty of care can be altered by the operating agreement, and this provision effectively does that by establishing a 'good faith' standard rather than a simple negligence standard. (D) is incorrect because it overstates the standard; the business judgment rule protects managers from liability for many decisions that turn out poorly, as long as they were made on an informed basis and in good faith.

Question 3

An LLC is formed to own and manage a portfolio of commercial real estate. The LLC is manager-managed. The operating agreement permits the manager to take any action in the ordinary course of business but requires a unanimous member vote for any action that would "make it impossible to carry on the ordinary business of the company." The manager, believing the real estate market has peaked, sells all of the LLC's properties in a single transaction without consulting the members. He intends to reinvest the proceeds in a different asset class.

Was the manager's sale of all the LLC's properties properly authorized? Select one.

Yes, because a manager has broad discretion to manage the company's assets, including selling them when market conditions are favorable.
No, because selling all of the LLC's assets is an act that requires unanimous member consent under the ULLCA default rules.
Yes, because the manager's intent to reinvest the proceeds means the business of the company can still be carried on.
No, because selling all the properties makes it impossible to carry on the ordinary business of the company, which was managing real estate. (correct answer)

Explanation: The correct answer is D. The operating agreement specifically requires a unanimous member vote for any act that would make it impossible to carry on the ordinary business of the company. The ordinary business was managing a portfolio of commercial real estate. By selling all the properties, the manager has made it impossible to continue that specific business, even if he plans to start a new one. This action falls squarely within the provision requiring a unanimous member vote. (A) is incorrect because a manager's discretion is limited by the operating agreement and statutory rules on extraordinary acts. (B) is also correct as a general ULLCA principle, but (D) is the better answer because it directly applies the specific language of the controlling operating agreement. (C) is incorrect because the analysis focuses on the ordinary business as it was defined, not on whether some form of business could continue.

Question 4

A client is a member of a three-person, member-managed LLC. The LLC's operating agreement is silent on removal of members. The client has discovered that one of the other members has been embezzling funds from the company. The client and the third, non-culpable member want to expel the embezzling member immediately to prevent further harm.

What is the most appropriate and direct course of action for your client and the other non-culpable member to take to expel the embezzling member? Select one.

They can vote to expel the member by a majority vote, as this is an ordinary business decision needed to protect the company.
They must dissolve the LLC, as there is no mechanism to forcibly remove a member unless specified in the operating agreement.
They can apply to a court for an order of judicial dissociation of the member due to his wrongful conduct that has adversely affected the business. (correct answer)
They can amend the operating agreement by majority vote to include a provision for expelling members, and then apply it retroactively.

Explanation: The correct answer is C. The ULLCA provides for judicial dissociation (expulsion) of a member in certain circumstances. These include when a member has engaged in wrongful conduct that has adversely and materially affected the company's business. Embezzlement clearly meets this standard. Since the operating agreement is silent, the members cannot unilaterally expel the third member, but they can seek a court order to do so. (A) is incorrect because expelling a member is an extraordinary event, not an ordinary business decision, and cannot be done by a simple majority vote without authorization in the operating agreement. (B) is incorrect because judicial dissociation provides a remedy short of dissolution. (D) is incorrect because amending the operating agreement requires unanimity by default, which the embezzling member would not provide, and applying it retroactively for punitive reasons would be highly suspect.

Question 5

An LLC's operating agreement provides that the company is manager-managed by a three-person board of managers. It further states that any action on behalf of the LLC requires the approval of at least two of the three managers. One of the managers, acting alone, signs a five-year lease for new office space on behalf of the LLC. The landlord was provided with a copy of the LLC's operating agreement during negotiations. The other two managers believe the lease is too expensive and refuse to ratify it. The landlord sues the LLC to enforce the lease.

Will the landlord's suit to enforce the lease likely succeed? Select one.

Yes, because any manager in a manager-managed LLC has apparent authority to bind the LLC in the ordinary course of business.
No, because the landlord had notice of the restriction on the manager's actual authority. (correct answer)
Yes, because leasing office space is an ordinary business decision, and the internal voting requirements of the LLC do not affect third parties.
No, because a lease for a term longer than one year is an extraordinary transaction requiring member approval.

Explanation: The correct answer is B. While a manager in a manager-managed LLC generally has apparent authority to bind the company, this authority does not exist if the third party has actual knowledge or notice of a restriction on the manager's authority. Here, the landlord was given a copy of the operating agreement, which explicitly stated that the approval of two managers was required. This gave the landlord notice that the single manager lacked actual authority to sign the lease alone, thereby defeating any claim of apparent authority. (A) is incorrect because apparent authority is negated by the third party's knowledge of the agent's lack of authority. (C) is incorrect because internal voting requirements do affect third parties when those parties have notice of them. (D) is incorrect because a five-year lease is generally considered an ordinary, not extraordinary, business transaction for most companies.

Question 6

A manager-managed LLC operates a chain of coffee shops. The sole manager, who is also a member, decides to sell one of the five coffee shop locations to pay down some of the LLC's debt. The operating agreement grants the manager "full and exclusive authority to manage the day-to-day business and affairs of the company." However, the agreement is silent on the sale of company assets. The manager enters into a binding purchase agreement for the sale of the one location without seeking the members' approval. The other members object to the sale.

Is the LLC bound by the purchase agreement signed by the manager? Select one.

Yes, because selling a single location out of five is considered an ordinary business decision within the manager's authority. (correct answer)
No, because the sale of any real property owned by an LLC requires the unanimous consent of all members.
Yes, because the operating agreement grants the manager full and exclusive authority, which includes the power to sell company assets.
No, because the sale of substantially all of the company's assets requires member approval, and selling one of five shops qualifies.

Explanation: The correct answer is A. The key issue is whether the sale of one of five coffee shops constitutes an act in the ordinary course of business or an extraordinary act requiring member consent. ULLCA requires unanimous member consent for acts outside the ordinary course of business, such as the sale of all or substantially all of the LLC's assets. Selling one of five locations is unlikely to be considered a sale of 'substantially all' assets and would likely be deemed within the ordinary course of business for a company that operates multiple locations. The operating agreement's broad grant of authority to the manager further supports this conclusion. (B) is incorrect because there is no per se rule requiring unanimous consent for any sale of real property; the analysis depends on whether it's in the ordinary course of business. (C) is too broad; while the grant of authority is strong, it is still subject to statutory limitations on extraordinary acts. (D) is incorrect because selling 20% of the business locations does not typically meet the legal standard for 'substantially all' assets.

Question 7

Two individuals, a chef and an investor, form a manager-managed LLC to open a restaurant. The investor, who provided 90% of the capital, is the sole manager. The chef, a member, runs the kitchen. The operating agreement states that any amendment to the agreement requires a unanimous vote of the members. After a year, the investor/manager proposes to amend the operating agreement to allow the LLC to expand into catering services, an activity not mentioned in the original agreement. The chef objects, fearing it will detract from the restaurant's quality.

Can the manager amend the operating agreement to authorize catering services over the chef's objection? Select one.

Yes, because expanding into a related business like catering is an ordinary business decision within the manager's authority.
No, because amending the operating agreement requires unanimity under both the agreement itself and the ULLCA default rule. (correct answer)
Yes, because the manager's voting power as a 90% owner allows him to approve amendments unilaterally.
No, because any change to the LLC's stated purpose requires filing an amendment to the certificate of organization with the state.

Explanation: The correct answer is B. The operating agreement is a contract among the members, and its amendment is governed by its own terms or, if silent, by the ULLCA. Here, the operating agreement explicitly requires a unanimous vote for any amendment. Furthermore, the ULLCA default rule for amending the operating agreement is also unanimity. Therefore, the manager cannot proceed without the chef's consent. (A) is incorrect because while the decision to start catering might be a business decision, the amendment of the foundational governing document is a structural matter requiring member consent as specified. (C) is incorrect because voting on amendments to the operating agreement is typically on a per capita basis unless specified otherwise, and even if it were pro rata, the agreement's unanimity requirement would control. (D) is incorrect because the certificate of organization typically contains only basic information; the scope of the business is defined in the operating agreement, and changing it does not usually require a public filing.

Question 8

A consulting firm operates as a member-managed LLC. Its operating agreement states that members are not entitled to remuneration for services performed for the LLC, except for the winding up of the business. One member, a skilled software developer, spends 400 hours building a custom project management software for the LLC, which saves the company thousands of dollars in licensing fees. The other members are thrilled with the software but refuse to pay the developer for her time, citing the operating agreement. The developer sues the LLC for the reasonable value of her services.

What is the likely outcome of the developer's lawsuit? Select one.

She will recover, because members are entitled to reasonable compensation for services that provide a substantial benefit to the LLC.
She will not recover, because the operating agreement explicitly bars remuneration for services, and members are presumed to contribute services as part of their investment. (correct answer)
She will recover, because the ULLCA provides a default rule of reasonable compensation that cannot be waived in the operating agreement.
She will not recover, but she will be entitled to a greater share of the LLC's profits to reflect her non-capital contribution.

Explanation: The correct answer is B. The ULLCA's default rule is that members are not entitled to remuneration for services rendered to a member-managed LLC. The operating agreement here explicitly reinforces this default rule. The provision is valid and enforceable. While her services provided a benefit, she rendered them as a member, and under the terms of the agreement she freely entered, she is not entitled to compensation. (A) is incorrect because it states the opposite of the default rule and ignores the operating agreement. (C) is incorrect because the ULLCA's rule is a default that can be altered by the operating agreement (e.g., to provide for salaries), and here the agreement confirms the default. (D) is incorrect because profit sharing is based on contributions unless otherwise agreed; her 'sweat equity' does not automatically adjust her profit share without an amendment to the operating agreement.

Question 9

What is the most appropriate and direct course of action for your client and the other non-culpable member to take to expel the embezzling member? Select one.

They can vote to expel the member by a majority vote, as this is an ordinary business decision needed to protect the company.
They must dissolve the LLC, as there is no mechanism to forcibly remove a member unless specified in the operating agreement.
They can apply to a court for an order of judicial dissociation of the member due to his wrongful conduct that has adversely affected the business. (correct answer)
They can amend the operating agreement by majority vote to include a provision for expelling members, and then apply it retroactively.

Question 10

You are representing a client who is a member of a manager-managed LLC. The LLC's certificate of organization, filed with the state, clearly indicates it is manager-managed. The appointed manager is the client's cousin. Without consulting the manager, your client signed a contract on behalf of the LLC to purchase a new delivery van from a local dealership. The dealership owner did not inquire about the LLC's management structure. When the manager learned of the contract, she refused to authorize payment, stating that the LLC did not need a new van. The dealership has now threatened to sue the LLC for breach of contract.

What is the most likely outcome if the dealership sues the LLC for enforcement of the contract? Select one.

The LLC will be bound, because a member of an LLC always has apparent authority to bind the company in dealings with third parties who are unaware of internal restrictions.
The LLC will not be bound, because a member in a manager-managed LLC is not an agent of the LLC and lacks authority to bind it. (correct answer)
The LLC will be bound, because the dealership had no notice of the client's lack of actual authority, making the client's action binding under principles of apparent authority.
The LLC will not be bound, but the client will be personally liable for the full purchase price of the van because he exceeded his authority.

Explanation: The correct answer is B. In a manager-managed LLC, members who are not managers are not agents of the LLC and have no statutory authority (actual or apparent) to bind the company simply by virtue of their status as members. Agency authority is vested in the managers. Since the LLC is designated as manager-managed in its public filings, third parties are on constructive notice of this structure. The client, as a non-manager member, had no authority to enter into the contract. (A) is incorrect because this rule applies to general partnerships and member-managed LLCs, not manager-managed LLCs. (C) is incorrect for the same reason; a non-manager member has no apparent authority to begin with. (D) is incorrect because while the client may be liable to the dealership for breach of the implied warranty of authority, the question asks about the outcome of a suit against the LLC.

Question 11

What is the likely outcome of the client's lawsuit? Select one.

The suit will be dismissed, because the operating agreement explicitly waives the members' right to inspect records.
The suit will succeed, because a member's right to inspect records for a proper purpose cannot be unreasonably restricted by the operating agreement. (correct answer)
The suit will be dismissed, because only members in a member-managed LLC have a statutory right to inspect records.
The suit will succeed only if the client can first present concrete evidence of fraud, rather than mere suspicion.

Question 12

Can the manager amend the operating agreement to authorize catering services over the chef's objection? Select one.

Yes, because expanding into a related business like catering is an ordinary business decision within the manager's authority.
No, because amending the operating agreement requires unanimity under both the agreement itself and the ULLCA default rule. (correct answer)
Yes, because the manager's voting power as a 90% owner allows him to approve amendments unilaterally.
No, because any change to the LLC's stated purpose requires filing an amendment to the certificate of organization with the state.

Question 13

You are advising the three members of a newly formed, member-managed LLC. They are drafting their operating agreement. One member proposes that to ensure stability, any member who wants to dissociate from the LLC must give two years' written notice. The ULLCA provides that a member has the power to dissociate at any time, rightfully or wrongfully, by express will. Another member is concerned that the two-year notice provision is unenforceable.

What is the best advice regarding the enforceability of the two-year notice provision for dissociation? Select one.

The provision is unenforceable because the ULLCA grants members an absolute power to dissociate at any time which cannot be varied by the operating agreement.
The provision is enforceable and will prevent a member from dissociating for two years after giving notice.
The provision is unenforceable to prevent dissociation, but it can form the basis for a claim of wrongful dissociation and damages against a member who leaves earlier. (correct answer)
The provision is enforceable only if it is filed as part of the LLC's public certificate of organization to provide notice to third parties.

Explanation: The correct answer is C. Under the ULLCA, a member always has the power to dissociate at any time, even if the operating agreement purports to limit this right. This is similar to the power to breach a contract. However, the operating agreement can define certain dissociations as wrongful. While the provision cannot legally prevent the member from leaving (i.e., obtain an injunction forcing them to remain a member), it can establish that leaving without giving two years' notice is a wrongful dissociation. This would make the dissociating member liable for any damages caused by their premature departure. (A) is incorrect because while the power to dissociate cannot be eliminated, the consequences of that dissociation can be governed by the agreement. (B) is incorrect because the provision cannot stop the member from actually dissociating. (D) is incorrect because the enforceability of this internal governance rule does not depend on public filing.

Question 14

Will the landlord's suit to enforce the lease likely succeed? Select one.

Yes, because any manager in a manager-managed LLC has apparent authority to bind the LLC in the ordinary course of business.
No, because the landlord had notice of the restriction on the manager's actual authority. (correct answer)
Yes, because leasing office space is an ordinary business decision, and the internal voting requirements of the LLC do not affect third parties.
No, because a lease for a term longer than one year is an extraordinary transaction requiring member approval.

Question 15

What is the most likely outcome if the dealership sues the LLC for enforcement of the contract? Select one.

The LLC will be bound, because a member of an LLC always has apparent authority to bind the company in dealings with third parties who are unaware of internal restrictions.
The LLC will not be bound, because a member in a manager-managed LLC is not an agent of the LLC and lacks authority to bind it. (correct answer)
The LLC will be bound, because the dealership had no notice of the client's lack of actual authority, making the client's action binding under principles of apparent authority.
The LLC will not be bound, but the client will be personally liable for the full purchase price of the van because he exceeded his authority.

Question 16

An engineering firm is organized as a manager-managed LLC with two managers and ten members. The operating agreement requires a majority vote of managers for ordinary business decisions and a 75% vote of members for extraordinary matters. The two managers deadlock on a decision to hire a new senior engineer. One manager wants to hire the candidate, and the other does not. To break the deadlock, one of the managers calls a vote of all the members, who vote 8-to-2 in favor of hiring the engineer.

Is the LLC now authorized to hire the new senior engineer? Select one.

Yes, because a supermajority of the members voted to approve the hiring, overriding the managers' deadlock.
No, because hiring decisions are ordinary business matters delegated to the managers, and they have not reached a majority decision. (correct answer)
Yes, because when managers are deadlocked, the decision-making authority reverts to the members by default.
No, because the operating agreement does not specify a deadlock-breaking mechanism, so no action can be taken.

Explanation: The correct answer is B. In a manager-managed LLC, authority over ordinary business matters is vested in the managers, not the members. The operating agreement specifies that a majority vote of managers is required. Since the managers are deadlocked 1-to-1, there is no majority approval, and thus no authority to act. The members' vote is irrelevant for an ordinary business decision that has been delegated to the managers. (A) is incorrect because the members' voting rights are limited to the extraordinary matters specified in the agreement or by statute; they cannot simply override the managers on ordinary matters. (C) is incorrect because there is no default rule that reverts authority to members in case of manager deadlock; often, this leads to paralysis that may require judicial dissolution. (D) is closer but less precise than B; the reason no action can be taken is that the required authorization (a majority of managers) has not been obtained.

Question 17

An LLC is manager-managed, with a single manager who is not a member. The operating agreement contains a provision allowing the manager to engage in business activities that may compete with the LLC, provided that she first discloses the opportunity to the members. The manager learns of a lucrative opportunity to purchase a property that would be suitable for the LLC's business. She discloses the opportunity to the members in writing. Before the members can respond, the manager purchases the property for her own account. A member sues the manager for breach of the duty of loyalty.

Is the member likely to prevail in the lawsuit against the manager? Select one.

No, because the operating agreement authorized the manager to compete with the LLC after providing disclosure.
Yes, because the duty of loyalty cannot be modified by an operating agreement, and usurping a corporate opportunity is a per se breach.
No, because as a non-member manager, she does not owe a fiduciary duty of loyalty to the LLC or its members.
Yes, because the operating agreement's safe harbor provision required not just disclosure, but also the members' consent or refusal of the opportunity. (correct answer)

Explanation: The correct answer is D. While the ULLCA allows an operating agreement to modify the duty of loyalty, it cannot be eliminated. A common modification is a safe harbor procedure for corporate opportunities. However, such procedures typically require not only disclosure but also that the LLC be given a chance to act. By purchasing the property before the members could respond, the manager usurped the opportunity without fully complying with a reasonable interpretation of the safe harbor. The provision for disclosure implies a need for the members to consider and potentially act on that disclosure. Her actions preempted that, constituting a breach of her duty of loyalty. (A) is incorrect because mere disclosure without an opportunity for the LLC to act is insufficient. (B) is incorrect because the duty of loyalty can be modified, though not eliminated. (C) is incorrect because managers, whether members or not, owe fiduciary duties to the LLC.

Question 18

Is the LLC bound by the purchase agreement signed by the manager? Select one.

Yes, because selling a single location out of five is considered an ordinary business decision within the manager's authority. (correct answer)
No, because the sale of any real property owned by an LLC requires the unanimous consent of all members.
Yes, because the operating agreement grants the manager full and exclusive authority, which includes the power to sell company assets.
No, because the sale of substantially all of the company's assets requires member approval, and selling one of five shops qualifies.

Question 19

A member-managed LLC has three members. One member personally guarantees a $100,000 loan that the LLC takes out from a bank to purchase new equipment. The LLC subsequently defaults on the loan, and the guaranteeing member is forced to pay the full $100,000 to the bank. He then seeks reimbursement from the LLC. The other two members argue that because he voluntarily guaranteed the loan without a formal vote, the LLC has no obligation to reimburse him.

Is the member entitled to reimbursement from the LLC? Select one.

No, because a member who volunteers to pay a company debt is not entitled to reimbursement unless there was a prior agreement.
Yes, because a member is entitled to indemnification for liabilities incurred in the ordinary course of the company's business. (correct answer)
No, because the decision to guarantee a loan required a majority vote of the members, which was not obtained.
Yes, but only for one-third of the amount, as the liability must be shared equally among the three members.

Explanation: The correct answer is B. Under the ULLCA, an LLC must indemnify a member for a liability incurred by the member in the course of the company's business. When the member paid the LLC's debt pursuant to a personal guarantee he provided for the LLC's benefit, he incurred a liability in the ordinary course of business. Therefore, he is entitled to be indemnified (reimbursed) by the LLC for the full amount. (A) is incorrect because this right to indemnification is statutory and does not require a separate agreement. (C) is incorrect because the issue is not whether the guarantee was properly authorized, but whether the member is entitled to be made whole after paying a company debt. His payment discharged a liability of the LLC. (D) is incorrect because the primary obligation is on the LLC itself. The member is not seeking contribution from fellow members but reimbursement from the entity.

Question 20

Is the member entitled to reimbursement from the LLC? Select one.

No, because a member who volunteers to pay a company debt is not entitled to reimbursement unless there was a prior agreement.
Yes, because a member is entitled to indemnification for liabilities incurred in the ordinary course of the company's business. (correct answer)
No, because the decision to guarantee a loan required a majority vote of the members, which was not obtained.
Yes, but only for one-third of the amount, as the liability must be shared equally among the three members.