SERIES 66 EXAM COVERS LIMITED LIABILITY CORPORATIONS

As part of your preparation for taking the Series 66 exam, study the characteristics of limited liability corporations or LLC's.

 Here are some facts about LLC's that you should know and study.

 An LLC is a true direct participation program (DPP), because it passes through all income and tax deductions to the owners or shareholders. It thus avoids double taxation, unlike a “C” or regular corporation. 

 An LLC also offers a corporate shield to officers, employees, and shareholders, protecting them from being sued for any damages caused by the LLC. 

 Imagine that you open an account for an LLC. Obtain the tax ID of the LLC; its certificate of incorporation; the business of the LLC; and its principal place of business. 

 Obtain a written corporate authorization; and the names of persons empowered to enter trades. 

 Obtain a list of share owners and their tax ID numbers. Verify the information that the LLC presents.

 Here is a link to NASAA's Study Outline for the Series 66. Note Section III (A)(2) where the Study Outline includes limited liability corporations.

 Bob Eder's book, Study for the Series 66 Exam, is available in both paperback and Kindle e-book versions on Amazon. Here is a link to Study for the Series 66 Exam on Amazon.

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