Exam 43: A: Law for Small Business

Fact Pattern 43-B1 Jordan and Kacy own and operate Safety Tables,a small-business enterprise that sells adjustable tables that allow workers to safely work with large,heavy,or oddly shaped objects.The enterprise does not pay taxes on its profits,but distributes them to Jordan and Kacy who pay taxes on these amounts as their individual income.Jordan and Kacy's personal liability for Safety Tables's debts and obligations is limited. -Refer to Fact Pattern 43-B1.Safety Tables is ex?empt from legal requirements that relate to

B2B,Inc. ,an inventory management firm,is a corporation.Cody is one of B2B's owners-a shareholder.If Cody's dies,B2B

Significant factors to consider when choosing a business form include the titles of its officers.

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

When Flash Flush Company is incorporated in Georgia,the state agency with which the business name is filed approves it as a trade name.This filing will protect the name

Loudon Machinery,Inc. ,wants to fire its employee Newt,who is an at-will employee.This means that Newt can be fired

Rudy operates Silver Buckles,a small-business equine enterprise.To raise capital,Rudy contacts Thad,a venture capitalist.Besides capital,Thad will most likely

Federal and state laws prohibiting discrimination in employment relationships protect employees and independent contractors.

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?

Filing a corporate name with the appropriate state official will protect the name as a trade name within the state and within contiguous states.

To protect trade secrets,a company may include a covenant not to compete in an employment contract.

The owners of a limited liability company are called shareholders.

Like a corporation,a limited liability company is required to hold an annual meeting.

Diana and Earl incorporate their computer technical support business as Fast Aid,Inc.Diana contracts with Gina to respond to Fast Aid's cus?tomer service calls on a commission basis.What are the advantages and disadvantages to Fast Aid of classifying Gina as an independent contrac?tor rather than as an employee? Earl obtains a loan from First National Bank and signs a promissory note for repayment of the amount without indicating that he is doing so on behalf of Fast Aid.Fast Aid does not make enough profit its first year to make payments on the loan.Charging default,the bank files a suit against Earl for the unpaid amount.Earl re?sponds that he was acting on behalf of Fast Aid.Will the bank succeed against Earl? Why or why not?

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

Joy and Kersey want to open a magic and novelty shop as Jo-Kers,with a plan to open other shops in the future.To attain limited li?ability for the lowest cost and the fewest start-up formalities,their best op?tion is to form

Lee wants to begin importing athletic shoes under the corporate name Mercury,Inc.Mercury should include most of its corporate rules in

Many states have certification programs that identify specialists in various legal areas.

Trade secrets should not be disclosed to a venture capitalist without a confidentiality agreement.

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