Question 1

A business entity's limited personal liability obviates the need to obtain insurance for significant business liability risks.

Accepted Answer

A) True 
 B)False

Question 2

A limited liability company's members must be its managers.

Accepted Answer

A) True 
 B)False

Question 3

A limited liability organization's limited liability may be lost by failure to comply with the rules for a business form.

Accepted Answer

A) True 
 B)False

Question 4

A member of a limited liability company must be a natural person.

Accepted Answer

A) True 
 B)False

Question 5

Max wants to open Max's Medical Equipment Supply with the assistance of an attorney. To find an attorney, Max should most likely

Accepted Answer

A)  ask a court to appoint a lawyer to assist him. 
B)  advertise in the "Help Wanted" section of a newspaper or database. 
C)  review listings in the Martindale-Hubbell Law Directory. 
D)  audit classes at a local law school. 
A)  ask a court to appoint a lawyer to assist him. 
B)  advertise in the "Help Wanted" section of a newspaper or database. 
C)  review listings in the Martindale-Hubbell Law Directory. 
D)  audit classes at a local law school.

Question 6

Mabel and Nahim want to start up and incorporate a new business enterprise. The first step in the incorporation process is to

Accepted Answer

A)  choose and file a corporate name with a state office. 
B)  draft the bylaws to govern the corporation. 
C)  hold an initial board of directors' meeting. 
D)  prepare and file articles of incorporation with a state office. 
A)  choose and file a corporate name with a state office. 
B)  draft the bylaws to govern the corporation. 
C)  hold an initial board of directors' meeting. 
D)  prepare and file articles of incorporation with a state office.

Question 7

Quia and Rafi form SA, LLC, a limited liability company, to operate Superior Athletics, a fitness center. Compared to a sole proprietorship and a general partnership, a limited liability company has limited

Accepted Answer

A)  business purposes. 
B)  investment opportunities. 
C)  personal liability. 
D)  requirements. 
A)  business purposes. 
B)  investment opportunities. 
C)  personal liability. 
D)  requirements.

Question 8

To incorporate, you must first choose a corporate name and file it with the appropriate state office.

Accepted Answer

A) True 
 B)False

Question 9

Josh and Kya form Longview Associates, a limited partnership, to invest in real estate. Compared to a sole proprietorship and a general partnership, a limited partnership has limited

Accepted Answer

A)  business purposes. 
B)  investment opportunities. 
C)  personal liability. 
D)  requirements. 
A)  business purposes. 
B)  investment opportunities. 
C)  personal liability. 
D)  requirements.

Question 10

Federal immigration laws do not require verifying whether workers are U.S. citizens or are otherwise authorized to work in this country.

Accepted Answer

A) True 
 B)False

Question 11

Standard-form contracts are available on the Internet, but they should be adapted to the specific circumstances of a transaction.

Accepted Answer

A) True 
 B)False

Question 12

A business plan describes a company, its products, and its anticipated future performance.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Quisha operates River Valley Soccer, an athletic equipment shop, as a sole proprietorship. Taxes on the business's income are paid by

Accepted Answer

A)  no one. 
B)  Quisha. 
C)  the state or federal government. 
D)  the business. 
A)  no one. 
B)  Quisha. 
C)  the state or federal government. 
D)  the business.

Question 15

The states and the Securities and Exchange Commission jointly created a simplified securities registration process for large businesses.

Accepted Answer

A) True 
 B)False

Question 16

Generally, your trademark must be the same as another's mark or so similar that confusion results.

Accepted Answer

A) True 
 B)False

Question 17

Bild-It-Rite Corporation uses independent contractors. Bild-It-Rite can

Accepted Answer

A)  be sued by a contractor for a violation of discrimination laws. 
B)  exercise little control over how the contractors perform. 
C)  obtain workers' compensation insurance for the contractors. 
D)  withhold income taxes from payments to the contractors. 
A)  be sued by a contractor for a violation of discrimination laws. 
B)  exercise little control over how the contractors perform. 
C)  obtain workers' compensation insurance for the contractors. 
D)  withhold income taxes from payments to the contractors.

Question 18

If a new company has only two owners, they do not need a shareholder agreement that defines their relative ownership rights and interests.

Accepted Answer

A) True 
 B)False

Question 19

Corporate bylaws are the company's governing rules.

Accepted Answer

A) True 
 B)False

Question 20

Business networks do not help to identify a knowledgeable attorney.

Accepted Answer

A) True 
 B)False

Exam 43: Law for Small Business

A business entity's limited personal liability obviates the need to obtain insurance for significant business liability risks.

A limited liability company's members must be its managers.

A limited liability organization's limited liability may be lost by failure to comply with the rules for a business form.

A member of a limited liability company must be a natural person.

Max wants to open Max's Medical Equipment Supply with the assistance of an attorney. To find an attorney, Max should most likely

Mabel and Nahim want to start up and incorporate a new business enterprise. The first step in the incorporation process is to

Quia and Rafi form SA, LLC, a limited liability company, to operate Superior Athletics, a fitness center. Compared to a sole proprietorship and a general partnership, a limited liability company has limited

To incorporate, you must first choose a corporate name and file it with the appropriate state office.

Josh and Kya form Longview Associates, a limited partnership, to invest in real estate. Compared to a sole proprietorship and a general partnership, a limited partnership has limited

Federal immigration laws do not require verifying whether workers are U.S. citizens or are otherwise authorized to work in this country.

Standard-form contracts are available on the Internet, but they should be adapted to the specific circumstances of a transaction.

A business plan describes a company, its products, and its anticipated future performance.

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

Quisha operates River Valley Soccer, an athletic equipment shop, as a sole proprietorship. Taxes on the business's income are paid by

The states and the Securities and Exchange Commission jointly created a simplified securities registration process for large businesses.

Generally, your trademark must be the same as another's mark or so similar that confusion results.

Bild-It-Rite Corporation uses independent contractors. Bild-It-Rite can

If a new company has only two owners, they do not need a shareholder agreement that defines their relative ownership rights and interests.

Corporate bylaws are the company's governing rules.

Business networks do not help to identify a knowledgeable attorney.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

Ethics and Business Decision Making

Intentional Torts and Privacy

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Statute of Frauds

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

International Law in a Global Economy

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks and Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Mortgages Foreclosures After the Recession

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporate Formation and Financing

Corporate Directors, Officers, Shareholders

Corporate Merger, Consolidation, Termination

Securities Law Corporate Governance

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Professional Liaility and Accountability

Personal Property and Bailments

Real Property Landlord-Tenant Relationships

Insurance

Wills and Trusts

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