Which of the following is true of a member-managed LLC (limited liability company)?
A) Each member has equal rights in the management of the business of the LLC.
B) The member with the highest capital contribution becomes the de facto manager of the LLC.
C) Any matter relating to the business of the LLC is decided by a unanimous vote of the members.
D) Shareholders are not allowed to decide matters relating to the business of the LLC.
A
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Briefly describe the rationale for the reduced tax rate on dividends for individual taxpayers
Under the Revenue Reconciliation Act of 1993, the tax-paying individual investor may prefer low dividends and higher expected capital gains because ____
A) the top marginal rate is lower on dividend income than on capital gains B) the taxes on capital gains can be deferred C) capital gains are more certain than share repurchases D) the tax on capital gains is 28%