ENT- Chapter 9

Which of the following are the results of violating a trademark? (Check all that apply.)

- Be required to pay monetary damages - Be required to change the name

Which of the following ARE a common examples of a license or a permit?

- Sign permit - Federal liquor license - Business license

Which of the following questions should be considered by a new business owner before entering into a lease contract? (Check all that apply.)

- Who would be responsible for making improvements to the facility? - Who has to carry the liability insurance and at what level? - Who is responsible for maintenance and other facilities issues? - Can the business owner renew the lease after the term expires?

Which of the following are the three basic types of legal business organization? (Check all that apply.)

1.) Corporation 2.) Partnership 3.) Sole proprietorship

What are the two broad categories of partnerships? (Check all that apply.)

1.) General 2.) Limited

Which type of legal business organization is the simplest form to establish?

Sole proprietorship

Which of the following forms of business has two classes of partners?

Limited liability partnership, (A.K.A and LLP)

Which of the following are benefits of a Subchapter S Corporation? (Check all that apply.)

- Consolidation of business and personal income for tax benefits - Relatively easy to to form compared with Subchapter C - Limited liability for the owners - Legitimacy in the markets as a more established form of business

In which of the following business forms do the business debts flow directly to the owner(s)? (Check all that apply.)

- General partnership - Sole proprietorship

Which of the following must be formally addressed by both Subchapter C and Subchapter S Corporations? (Check all that apply.)

- Holding annual board meetings - Reporting standards to local, state, and federal authorities. - Authorization of more shares of stocks

Identify the true statements about a Subchapter C Corporation. (Check all that apply.)

- It considers the owners as employees and pays them salaries and bonuses. - Profits that are not paid out for such items are retained for future expansion.

Identify the typical requirements for a new business to obtain a city or country business license. (Check all that apply.)

- It should agree to report basic information about its performance on a set schedule. - It should pay a set fee, which is usually less than $100.

Which of the following are types of corporations developed by the U.S. legal system? (Check all that apply.)

- Subchapter S - Subchapter C - LLC

Which of the following are drawbacks of sole proprietorships? (Check all that apply.)

- The formation is limited to a single founder. - The liability of the business is the responsibility of the single owner. - The lack of legitimacy with suppliers and customers

Which of the following is true regarding a board of advisors? (Check all that apply.)

- The group is composed of individuals outside the business. - The group is formed at the discretion of the founder. - The group advises the founder on key issues.

Which of the following are the characteristics of limited partners in a limited liability partnership (LLP)? (Check all that apply.)

- They are typically allowed to work for the firm. - They are considered passive investors, and their liability is limited to their investment int he business.

A business with employees will be required to calculate and deduct various payroll taxes for: (Check all that apply.)

- state authorities - local authorities - federal authorities

Which of the following are the three basic types of legal business organization?(Check all that apply.)

1.) Corporation 2.) Partnership 3.) Sole proprietorship

The American with Disabilities Act (ADA) applies fully to any business with more than ______ employees and in some communities has been applied to all businesses.

15

One disadvantage of the Subchapter S Corporation is the limitation to the number of shareholders, which is currently set at a maximum of ____ shareholders.

75

A business owner hires a mechanic to work on cars owned by the customers. The mechanic makes a mistake that leads to significant and costly damage to a customer's car. Which type of insurance can be purchased to cover the damage?

Bonding

Which type of insurance covers a business in case workers cause damage in the performance of their work?

Bonding

True or false: The greater the insurance coverage obtained by a new business, the lower the cost.

False

True or false: Workers' compensation insurance is considered a minor expense for a business.

False (it is a major expense)

Which class of partner in a limited partnership is considered the manager of the firm and has unlimited liability for any debts or judgments against the firm?

General

Which form of business involves two or more individuals sharing unlimited liability in a business venture?

General partnership

In recent years, the ____ has become one of the most popular forms of incorporation for new businesses.

LLC

Which typeof insurance helps protect a business against lawsuit judgments?

Liability

______ are very inexpensive to form as this type of organization is formed by simply submitting the paperwork to a state government and having a charter issued prior to beginning operations.

Limited Liabilities Corporations

What is the initial value at which the form's shares are offered?

Par Value

Which form of corporation is required to pay an income tax?

Subchapter C

Which of the following forms of incorporation is required to pay income tax, which results in double taxation?

Subchapter C Corporations

True or false: A partnership will be governed by either the Uniform Partnership Act or the Revised Uniform Partnership Act if the partnership agreement is not developed and signed.

True

True or false: If a corporation suffers substantial losses, the founder(s) will lose only his or her investment in the business.

True

A ______ is an agreement between two parties to perform certain activities for some consideration.

contract

In new corporations, the shareholders and board of ______ are often the same individuals.

directors

A board of ______ is required of corporations, but a board of ______ is optional regardless of the legal form.

directors; advisors

A limited liability corporation (LLC) and a Subchapter S Corporation are similar in that they both ______.

have the limited liability feature

The effective application of ______ is one means to limit liability concerns of the new venture.

insurance

Because it is expensive to obtain and maintain, a(n) ______ should only be obtained if it contributes to the sustainable competitive advantage of the organization.

patent

An important feature of a Subchapter C Corporation is that there are no limits to ______.

the number of shareholders that an organization can obtain

A ______ is legal protection of the intellectual property that is associated with a specific business.

trademark

A ______ patent is for a new process, machine, article of manufacture, or composition of matter, or any new and useful improvement of those.

utility

A copyright can be claimed on creative materials generated, such as: (Check all that apply.)

- unpublished music - books - artwork - advertising copy

Which of the following industries would be highly regulated by the government? (Check all that apply.)

- Medical-related industries - Military-related business - Industries involving alcohol

Which of the following is a characteristic of general partnerships that is similar to that of sole proprietorships?

- The owners report their shares of losses or profits on their own personal income tax returns in proportion to their interest in the firm.

A sole proprietorship is very popular among individuals who: (Check all that apply.)

- are unsure about their business idea. - have a business where the costs and risks are low. - have a very small business.

A board of ______ is formed at the discretion of the founders and composed of individuals outside the business who advise the founders.

advisors

Which of the following are excellent sources of information regarding regulatory requirements? (Check all that apply.)

- Local department of economic development - Small Business Assistance Centers - Small Business Administration - Chamber of Commerce

Which of the following elements is NOT required when forming a Subchapter C or Subchapter S Corporation?

- Details of the social responsibility policy

Which of the following is NOT a common example of a license or a permit?

- Trademark permit