Question 1

Bro wants to incorporate Chop Shop, a motor vehicle repair business. Incorpora?ting requires filing, with the appropriate state office,

Accepted Answer

A)  a copy of the corporate liability insurance policy. 
B)  a corporate name. 
C)  corporate bylaws. 
D)  nothing. 
A)  a copy of the corporate liability insurance policy. 
B)  a corporate name. 
C)  corporate bylaws. 
D)  nothing.

Question 2

In a general partnership, the general partners have no limited liability.

Accepted Answer

A) True 
 B)False

Question 3

Registration is required to have a national right to a particular trademark.

Accepted Answer

A) True 
 B)False

Question 4

A sole proprietorship's profits are taxed be?fore expenses are deducted, and the owner's profit is taxed on his or her personal return.

Accepted Answer

A) True 
 B)False

Question 5

Reb wants to start a new business enterprise. Shari is an accountant. Reb most likely needs to consult Shari because

Accepted Answer

A)  an accountant can be less expensive than an attorney. 
B)  bookkeeping errors can provoke litigation. 
C)  ignorance of the law is a defense against liability. 
D)  keeping up with laws that govern business conduct is difficult. 
A)  an accountant can be less expensive than an attorney. 
B)  bookkeeping errors can provoke litigation. 
C)  ignorance of the law is a defense against liability. 
D)  keeping up with laws that govern business conduct is difficult.

Question 6

Hopper wants to start Ice Rinx as a new business enterprise. Josh is an attorney. Hopper most likely needs to consult Josh because

Accepted Answer

A)  ignorance of the law is a defense against liability. 
B)  it adds credibility with potential investors and lenders. 
C)  keeping up with laws that govern business conduct is difficult. 
D)  managing accounts receivable and accounts payable is critical. 
A)  ignorance of the law is a defense against liability. 
B)  it adds credibility with potential investors and lenders. 
C)  keeping up with laws that govern business conduct is difficult. 
D)  managing accounts receivable and accounts payable is critical.

Question 7

Independent contractors are not considered to be employees.

Accepted Answer

A) True 
 B)False

Question 8

Dana and Etta operate Fast Bikes, a bicycle shop, as a part?nership. Taxes on the business's income are paid by

Accepted Answer

A)  Dana and Etta only. 
B)  Dana, Etta, and the business. 
C)  not Dana, Etta, or the business. 
D)  the business only. 
A)  Dana and Etta only. 
B)  Dana, Etta, and the business. 
C)  not Dana, Etta, or the business. 
D)  the business only.

Question 9

Electro, Inc., makes and sells electric bikes, as well as parts and service, to customers in the United States and other countries. Can Electro pre?vent its employees from revealing its customer lists, pricing policies, and other confidential information, if the em?ployees resign to work for a com?petitor or to enter the same business themselves? How?

Accepted Answer

Customer lists, pricing policies, and ot

Question 10

All states permit a businessperson to operate as a limited liability company.

Accepted Answer

A) True 
 B)False

Question 11

Chuck and Dolph are partners in Eden Apartments, a new general partnership and business enterprise. As general partners, Chuck and Dolph are subject to

Accepted Answer

A)  liability limited to the amount of their investment in Eden. 
B)  liability limited to the deductible on Eden's insurance policy. 
C)  no liability. 
D)  personal liability for Eden's debts and obligations. 
A)  liability limited to the amount of their investment in Eden. 
B)  liability limited to the deductible on Eden's insurance policy. 
C)  no liability. 
D)  personal liability for Eden's debts and obligations.

Question 12

Nero opened Oh! Fudge!, a candy store, as a corporation. When doing busi?ness on behalf of the store, to avoid personal liability, Nero should sign contracts

Accepted Answer

A)  as an express agent for the corporation. 
B)  as an express party to the contract. 
C)  as an express agent and a party to the contract. 
D)  under a false name. 
A)  as an express agent for the corporation. 
B)  as an express party to the contract. 
C)  as an express agent and a party to the contract. 
D)  under a false name.

Question 13

The chief factor in deciding whether to retain an attorney is the cost.

Accepted Answer

A) True 
 B)False

Question 14

Dave is opening an office as EZ Property Management Company. An attorney may provide legal services to Dave and EZ in exchange for

Accepted Answer

A)  an equity stake in EZ, but not a promise of its future legal business. 
B)  an equity stake in EZ or a promise of its future legal business. 
C)  a promise of EZ's future legal business, but not an equity stake in the firm. 
D)  neither an equity stake in EZ nor a promise of future legal business. 
A)  an equity stake in EZ, but not a promise of its future legal business. 
B)  an equity stake in EZ or a promise of its future legal business. 
C)  a promise of EZ's future legal business, but not an equity stake in the firm. 
D)  neither an equity stake in EZ nor a promise of future legal business.

Question 15

Corporate income is taxed twice unless it is distributed to shareholders.

Accepted Answer

A) True 
 B)False

Question 16

Winnie opened her first Xtreme Sportz outlet six years ago. To open out?lets in more locations, Winnie needs capi?tal and wants to attract inves?tors. How can she do this?

Accepted Answer

One option for obtaining capital is a lo

Question 17

Limited liability organizations protect only business debts.

Accepted Answer

A) True 
 B)False

Question 18

Misclassifying an employee as an independent contractor can result in considerable tax liability imposed on an employer.

Accepted Answer

A) True 
 B)False

Question 19

A shareholder agreement defines the owners' rights and interests.

Accepted Answer

A) True 
 B)False

Question 20

Valley Winery Corporation's attempt to raise $1 million from a few select inves?tors is

Accepted Answer

A)  a buy-sell agreement. 
B)  a key-person investment. 
C)  a private offering. 
D)  a public offering. 
A)  a buy-sell agreement. 
B)  a key-person investment. 
C)  a private offering. 
D)  a public offering.

Exam 42: Law for Small Businesses

Bro wants to incorporate Chop Shop, a motor vehicle repair business. Incorpora?ting requires filing, with the appropriate state office,

In a general partnership, the general partners have no limited liability.

Registration is required to have a national right to a particular trademark.

A sole proprietorship's profits are taxed be?fore expenses are deducted, and the owner's profit is taxed on his or her personal return.

Reb wants to start a new business enterprise. Shari is an accountant. Reb most likely needs to consult Shari because

Hopper wants to start Ice Rinx as a new business enterprise. Josh is an attorney. Hopper most likely needs to consult Josh because

Independent contractors are not considered to be employees.

Dana and Etta operate Fast Bikes, a bicycle shop, as a part?nership. Taxes on the business's income are paid by

All states permit a businessperson to operate as a limited liability company.

Chuck and Dolph are partners in Eden Apartments, a new general partnership and business enterprise. As general partners, Chuck and Dolph are subject to

Nero opened Oh! Fudge!, a candy store, as a corporation. When doing busi?ness on behalf of the store, to avoid personal liability, Nero should sign contracts

The chief factor in deciding whether to retain an attorney is the cost.

Dave is opening an office as EZ Property Management Company. An attorney may provide legal services to Dave and EZ in exchange for

Corporate income is taxed twice unless it is distributed to shareholders.

Winnie opened her first Xtreme Sportz outlet six years ago. To open out?lets in more locations, Winnie needs capi?tal and wants to attract inves?tors. How can she do this?

Limited liability organizations protect only business debts.

Misclassifying an employee as an independent contractor can result in considerable tax liability imposed on an employer.

A shareholder agreement defines the owners' rights and interests.

Valley Winery Corporation's attempt to raise $1 million from a few select inves?tors is

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations

Legal and Ethical Issues in Environmental Protection and Consumer Rights