Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is a distinctive business structure that can have multiple members and managers called?

1. Limited Liability Partnership (LLP)

2. Series Limited Liability Company (LLC)

3. Corporation

4. Professional Limited Liability Company (PLLC)

The correct answer is: Series Limited Liability Company (LLC)

The term for a distinctive business structure that can have multiple members and managers is encapsulated well in the definition of a Series Limited Liability Company (LLC). This type of organizational structure allows for the creation of separate "series" within the LLC, each of which can have different members and managers, as well as different assets, liabilities, and operations. This flexibility is particularly advantageous for businesses that want to segregate different projects or interests while still maintaining the protection of a limited liability company. In contrast, Limited Liability Partnerships and Professional Limited Liability Companies do not inherently have the same level of segmentation within their structure, as they are typically intended for specific types of professional services and do not allow for series. Corporations, while they can have multiple shareholders and board members, do not provide the same unique structure that allows for distinct operational segments like a Series LLC does. Thus, the Series LLC is the best fit for a business that embraces multiple members and managers under distinct operational branches.