Question

Cecilia's Day Spa, LLC, is a member-managed limited liability company. If the law in Cecilia's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to________.A. capital contributions.B. participation in management.C. the number of members.D. transactions with the firm.

Answer 1

A. capital contributions

Step-by-step explanation:

In most states, unless the founders of the corporation have decided otherwise, voting power is directly proportional to the amount of capital contributions, or better, the percentage of capital contributions over the total.

This is why when a person acquires over 50% of the capital of a firm, the person likely has full power over it, because he will always have the majority of voting power, even if everyone else votes against.