Question

1. The members of a limited liability company are fully liable for its obligations. True or False. 2. A foreign corporation is a corporation formed in another country. True or False. 3. In ethical terms, a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on groups or individuals. True or False. 4. A corporation is an artificial being. True or False. 5. A default judgement is a judgement entered against the party who brought the claim before the court. True or False. 6. If a party refuses to cooperate with a discovery request, there is nothing that a court can do to compel compliance. True or False. 7. U.S. district courts have original jurisdiction in federal matters. True or False.

Answer 1

1. The statement is false because the personal assets of members of the limited liability company is safe which means their liabilities are not unlimited i.e. if the company goes into bankruptcy, then the claimant/creditors would not be able to pursue the members for the money in their personal accounts and assets (unless there are other factors involved), but only for the assets owned by the Limited Liability Company.  

2. The statement is true as the corporation/company incorporated under the laws of foreign jurisdiction is known as foreign corporation.

3. The statement is false because cost benefit analysis is not an assessment of the positive and negative effects of alternative actions on groups or individuals instead it is a process used to analyse decisions. It is a procedure for estimating all costs involved and possible profits to derive whether the project is financially feasible or if the company should pursue another project.

4. The statement is true. This means corporation is a separate legal entity different from its members that exists independently with rights and liabilities and carry out business in its own name. It is not affected by any such event as death, retirement, insolvency of its members. The board of directors use a common seal on all the official documents of the company to validate them.