Bart, Sam, and Greg create Big Barns Sales LLC, a company that builds pre-constructed barns. They file the certificate of organization with the secretary of state and create an operating agreement for the LLC. The operating agreement, however, does not address the method by which the LLC will be managed. Because management of the LLC is not addressed in the operating agreement, it is assumed the LLC will be:

manager-managed; the members will designate a person or persons to manage the LLC, and none of the managers can be members.

manager-managed, and the members will designate a person or persons to manage the LLC, which may include nonmembers.

member-managed; all members will vote on decisions of the LLC, and the majority vote controls.

member-managed, and the member with the largest capital investment will control the decisions of the LLC.

Lola, Jacy, and Tate plan to create a company to manufacture bicycles. After reviewing the pros and cons of the various forms of business enterprises, they decide to create a limited liability company. To create a limited liability company:

they must file a certificate of organization with the secretary of state and should create an operating agreement, although an operating agreement is not required.

they must file a certificate of organization and an operating agreement with the secretary of state.

they must file an operating agreement with the secretary of state and should create a certificate of organization, although a certificate of organization is not required.

they must file a certificate of organization with the county clerk and should create an operating agreement, although an operating agreement is not required.

Jasper, Saul, and Kenyon plan to open a new business providing sky-diving lessons and selling sky-diving equipment. Each of them plans to contribute the same amount of money to get the business started, and each will work for the business. Jasper is concerned about the possibility of being liable for the acts of Saul and Kenyon. Jasper also wants to make sure he does not pay more taxes than required. After reviewing the types of business entities available, Jasper suggests to Saul and Kenyon that they organize their new business as a(n):

corporation.

close corporation.

LLC.

partnership.

Pro Flowers LLC has been in business for five years. When one of its members dies, the other members of the LLC agree to dissolve the LLC. They proceed to wind up the business, collecting and liquidating all the assets of the LLC. Once that is done, the proceeds will be distributed:

first to creditors, and then the remaining amount will be divided equally among the members.

first to members in the amount of their capital contributions, then to creditors, and any remaining amounts are then distributed to members in equal shares or according to their operating agreement.

first to creditors, then members capital contributions will be returned, and any remaining amounts are then distributed to members in equal shares or according to their operating agreement.

first to creditors, and then members capital contributions will be returned.

Anita is a member of Three Roses Nursery LLC, and is also one of the managers of the LLC. This means that Anita and her fellow member-managers vote on decisions that need to be made for the company, and the majority vote controls on those decisions. One day, the member-managers discuss a possible new contract with a potential supplier, Heartland Seedlings Co. Anita is a part-owner in Heartland Seedlings, and she would benefit greatly if Three Roses enters into the contract. The contract would cost Three Roses more money than their existing contract, but Anita pushes the other member-managers to agree to the contract anyway. By pushing the other member-managers to agree to the more expensive contract, Anita has:

violated the duty of confidentiality.

violated the duty of candor.

violated the duty of loyalty.

not violated any duties to the company.