Business law quiz 5

True

If a partnership is called "Golden Consultants," then the partners would need to comply with any applicable assumed-name statute.

True

If a sole proprietorship retains its profits for business expansion purposes instead of distributing the money to a proprietor, that owner still must pay taxes on the income made by the proprietorship.

True

If a trademark becomes generic or if it loses its distinctiveness, it also loses its status as a protected trademark.

True

In a limited liability company (LLC), members act as agents of the LLC but are not personally liable to third parties.

True

The Digital Millennium Copyright Act makes illegal the effort to get around devices used by copyright owners to keep their works from being infringed.

False, This law prohibits you from using a mark the same as or similar to another's "famous" trademark so as to dilute its SIGNIFICANCE, REPUTATION, AND GOODWILL.

The Federal Trademark Dilution Act prohibits the use of a mark that is the same or similar to a "famous" trademark only when the owner of the "famous" trademark can prove public confusion regarding the two marks.

False, In 1988, the Internal Revenue Service ruled that limited liability companies (LLCs) would be treated as nontaxable entities, much like partnerships, for federal income tax purposes. Following this ruling, states rushed to pass legislation authorizing business people to operate their businesses as LLCs.

The Internal Revenue Service treats limited liability companies as taxable entities.

True

When a business is publicly held by a large number of owners, the form of organization usually is a corporation.

True

When two or more persons with a common interest in business share profits and losses, a partnership exists.

Shareholders of publicly held organizations can transfer their ownership without interfering with the organization's management.

Which of the following statements is true of publicly held business organizations?

Misappropriation of a trade secret occurs when ________.

a person improperly acquires secret information through burglary, espionage, or computer hacking

True

Usually, the cost of creation of a business entity is not a major factor in considering which form of business organization a person will choose to operate a business.

True

A limited partner may assign his or her interest to another without dissolving the limited partnership

False, Limited partners may not participate in the management of the limited partnership. Under the Revised Uniform Limited Partnership Act, a limited partner who participates in an organization's management becomes liable as a general partner if a third party had knowledge of the limited partner's activities.

A limited partner, even if he or she participates in management, cannot be held liable as a general partner.

False, A limited partnership basically has all the attributes of a partnership except that one or more of the partners are designated as limited partners. The management is left in the hands of one or more general partners who remain personally liable for the organization's debts.

A limited partnership is solely made up of limited partners

True.

A mobile home is considered personal property.

False, today, a patent is firmly associated with an inventive act and conveys a right to exclude others from making, using, selling, or importing the covered invention.

A patent is a legal monopoly in copying and marketing a new invention.

False, A sole proprietor is personally obligated for the debt of the proprietorship. Legally speaking, this owner has unlimited liability for the obligations of this type of business organization.

A sole proprietor has limited liability for the obligations of a proprietorship.

dissolution, The crucial issue with the continuity factor is the method by which a business organization can be dissolved. A dissolution is any change in the ownership of an organization that changes the legal existence of the organization.

A(n) ________ is any change in the ownership of an organization that changes the legal existence of the organization.

True

Design patents apply to the appearance of an article of manufacture, unrelated to its function.

True

Even though a corporation is treated the same as an individual under most aspects of the law, there are some rights that only individuals can possess.

False, Such organizations are said to be closely held. Family-owned and family-operated businesses are common examples of closely held organizations.

Family-owned and family-operated businesses are common examples of publicly held organizations.

True

Trade dress refers to a color or shape associated with a product or service.

False, As long as a company takes reasonable measures to prevent the public dissemination of trade secrets, it does not lose its property in knowledge-based resources merely because customers, suppliers, repair technicians, or even visitors come into contact with the secrets.

Trade secrets lose property in knowledge-based resources when they come into contact with suppliers, customers, repair technicians, or even visitors.

True

Trademarks indicate a specific producer.

Companies can be considered authors under copyright law.

True

Trade secret

A ________ is any form of knowledge or information that has economic value from not being generally known to others or readily ascertainable by proper means and has been the subject of reasonable efforts by the owner to maintain secrecy.

False, A benefit corporation is a legal business structure. A B-Corp. is a private certification.

A benefit corporation is also known as a B-Corp.

False, A dissolution does not necessarily destroy the business of a partnership. Dissolution is not the same thing as terminating an organization's business activity.

A dissolution essentially terminates the business of a partnership.

True

All partners in a general partnership have unlimited liability for their organization's debts.

True

An injunction is an order by a judge either to do something or to refrain from doing something.

True, s a rule of thumb, S corporations have distinct advantages for a business operating at a loss because the loss is shared and immediately deductible on the returns of the shareholders. S corporations cannot have more than 100 shareholders, each of whom must elect to have the corporate income allocated to the shareholders annually in computing their income for tax purposes, whether actually paid out or not.

Any operating loss suffered by an S corporation is shared and immediately deductible on the returns of its shareholders.

False, trade fixtures are an exception to the real property rule. A tenant may remove trade fixtures before the lease ends but must repair any damage to the real property.

Anything that becomes attached to real property is considered a trade fixture and becomes real property without exception.

False, The Copyright Act specifies that a fair use of copyrighted materials is not an infringement of the owner's property. Fair use includes copying for "criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research."

Copying for research or teaching are considered an infringement of the owner's property.

False, It is a standard proposition that corporate officers and directors owe fiduciary duties of care and loyalty to shareholders. Some states treat limited liability company fiduciary duties similarly to those owed in corporations, while others apply the rules for partnership.

Corporate officers and directors do not owe fiduciary duties of care and loyalty to shareholders.

how much paperwork is involved.

In the context of factors to consider when selecting a business's organizational form, one of the most significant creation-related issues is

False, In the corporate form of organization, the shareholders elect the members of the board of directors. These directors set the objectives or goals of the corporation, and they appoint the officers.

In the corporate form of organization, the shareholders elect the officers.

False, Misappropriation OBVIOUSLY occurs when one improperly acquires secret information through burglary, espionage, or computer hacking.

Innocently acquiring a secret from another without knowledge of their theft is generally misappropriation.

True

Intellectual property systems presume that the long-term benefits of increased information and investment are greater than the short-term costs.

False, It may be possible to change an existing corporate structure to a benefit corporation. In most states with the benefit corporation structure, firms identify the targeted public benefit in the articles of incorporation and subsequently provide reports to shareholders on progress in achieving the benefit.

It is not possible to change an existing corporate structure to a benefit corporation in any state.

True

It is not unusual for the growth in a business to be reflected in changes in organizational forms as a part of a life cycle.

True

LinkedIn is an example of a service mark.

False, In general, once information is in the public domain, an intellectual property right cannot be applied to recapture it. Firms that do not have an intellectual property strategy in place risk losing valuable assets.

Once information is in the public domain, an intellectual property right can be applied to recapture it.

True

One can be liable for materially contributing to another's infringement with knowledge of the infringement.

False, Ownership of a sole proprietorship cannot be transferred. The fact that a proprietorship's business activity may be more stable than a proprietor's willingness to remain actively involved in a business indicates that the sole proprietorship is a less desirable organizational form.

Ownership of a sole proprietorship can be transferred

False, A sole proprietorship is the east and least expensive to run.

Partnership is the most easily formed business organization compared to other forms of business organizations.

False, Personal property can be tangible AND intangible

Personal property MUST be tangible, property identified by the senses.

Air Traffic Space

Real Property does not include

True

Real property can become personal property and personal property can become real property.

True

Rights appurtenant to the land (water rights,easement rights) become part of real property and transfer with the property.

True

The courts can declare a trademark invalid even if the U.S. Patent and Trademark Office has accepted registration.

false, the creation of a partnership is made easier since it does not need to get permission from each state in which it does business.

The creation of a partnership requires permission from each state in which it does business.

True

The criteria used to select a form of organization needs to be reviewed periodically in consultation with close advisers.

the method by which the business can be dissolved.

The crucial issue with the continuity factor of a business's organizational form is

False, The impetus for creating the benefit corporation structure comes from the perception that traditional corporate forms place too much emphasis on profit maximization.

The impetus for creating the benefit corporation structure comes from the perception that traditional corporate forms place less emphasis on shareholder rights.

True

The protections of property often do not apply automatically to ownership of intangible knowledge resources that are created.

False, The law recognizes three basic forms of business organizations and several hybrid forms that contain attributes of two or more basic forms. The three basic forms include sole proprietorship, partnerships, and corporations.

The three basic forms of business organizations are limited partnerships, S corporations, and limited liability companies.

False, copyright deals with original expression rather than invention. Like patent, copyright gives those who have this property a monopoly over the right to exclude others from copying and marketing for a limited period of time.

copyright deals with original invention, like patents

Which of the following is most likely to be the first step taken by a business to protect its trade secrets?

identify confidential knowledge-based resources by conducting a trade secret audit

To violate another's trade secret rights, one must

misappropriate the information