Question

Which of the following is true of an LLC?

1) An LLC cannot hold title to property.
2) An LLC is regarded a separate legal entity.
3) The owners of LLC are called general partners or specific partners.
4) An LLC is a creature of federal law.

Answer 1

An LLC is indeed considered a separate legal entity, distinguishing it from its owners and providing them with limited liability, where their personal assets are protected from the company's obligations.

Step-by-step explanation:

Among the statements given about an LLC (Limited Liability Company), the one that is true is that an LLC is regarded as a separate legal entity. This means that an LLC is distinct from its owners and can hold title to property, be sued, and enter into contracts. The owners of an LLC are known as members, and they benefit from limited liability, meaning their personal assets are usually protected from the company's debts and liabilities. Unlike the misconception that LLCs are shaped by federal law, they are actually created and governed by state statutes.