entrepreneurship ch 7 test review
bans the sale of impure, improperly labeled, falsely guaranteed, and unhealthful foods, drugs and cosmetics
FDA
the antitrust legislation that makes it illegal for competitors to set prices is the
Sherman act
what is not included in a partnership agreement
how dividends should be distributed
a limited liablity company
is not subject to the rules for an S corporation
a business is a sole proprietorship
it is owned execlusively by one person
the individual or group that owns the most shares of stock in a corporation
maintains control of the company
franchisors may offer
management and technical training
when buying a business, you should...
meet with the seller, inspect the business during working hours, have a lawyer draw up the sales contract
a disadvantage of a sole propreitorship is that
only the owner crontributes money
the purpose of the _______ agreement is to set down in writing the rights and responsibilities of each of the owners
partnership
a document that gives legal rights to inventors is a ____________
pat & pending
gives an inventor the sole right to produce
patent laws
you can learn about laws that affect your business
reading books, taking a course in business law, the internet
this law makes it illegal to charge different prices to different groups of nonretail consumers
robinson-patman act
makes it illegal for competitiors to get together and set prices on the products and services they sell
sherman act
the most common legal form of business in the united states is a
sole propreitorship
the operating costs of a franchise include an initial franchise fee, ________, royalty fees, and advertising costs
startup costs
an advantage to buying an existing business is that it already has customers, ___________, and procedures
suppliers
an advantage of buying an existing business is that
suppliers are lined up
what is a disadvantage of working in a family business
the distinction between business life and private life is blurred
when buying an existing business, you should analyze financial accounting reports of operations for at least ...
three years
brand names may have a _________, which means that the name, symbol, or special mark can be used only by the business
trademark
states the names, symbols, or special marks that distinguish certain businesses can be used only by the business
trademark law
laws that protect businesses involve
trademarks
a disadvantage of buying an existing business is that it may be poorly located
true
a franchisee is a person who purchases a franchise agreement
true
a partnership agreement identifies the investment contributed by each partner
true
an S corporation profits are taxed only as individual income, not as corporate income
true
during the period a patent is in effect, no business or individual can copy or use the patented invention without permission from the patent holder
true
in a partnership, any looses will be shared by all the partners
true
one of the most common reasons that a business hires a lawyer is to assist with contracts
true
people who own shares of stock in a corporation are the owners of the corporation
true
the consumer product safety act of 1972 sets safety standards for products other than food and drugs
true
the franchise disclosure document helps the franchise buyer make a knowledgeable purchase
true
the government exercises very little control over sole proprietorship
true
the original, creative work of an artist or inventor is called intellectual property
true
the owner of a business may sell the business because of insufficient sales or profits
true
the wheeler-lea act bans unfair or deceptive actions or practices by businesses
true
when purchasing an existing business, you should find out why the business is being sold, inspect the facility, and analyze the financial accounts for the last three years
true
this law requires all banks to calcuate credit costs in the same way
truth-in-lending act
the law that bans false or misleading advertising
wheeler-lea act
bans unfair or deceptive actions or practices by businesses
whellier act
regulations that control what types of buildings can be built in what areas
zoning laws
restrictions on where businesses can locate are
zoning laws
in a corporation, each share of stock is
a unit of ownership in the company
you should be suspicious when buying a franchise if the franchisor refuses to provide
a written financial statement
the amount paid for the right to run a franchise is
an initial franchise fee
what makes monopolies in a certain industry illegal
antitrust laws
this means the parties to a contract are legally able to enter into a binding agreement
capacity
you can find a business for sale through
classified ads, leasing agents, bankers
states that is illegally for a business to require a customer to purchase one good in order to be able to purchase another good
clayton act
sets safety standards for products other than food and drugs
consumer protection
establishes rights to exclusive publication, production, sale, or distribution of a literary or artistic work
copy right
a business with the legal rights of a person and which may be be owned by many people is a
corporation
ownership of a _________ is in the form of shares of stock
corporation
an advantage of a partnership is that
decision making and responsibilites are shared
the board of directors of a corporation
determines the salaries of the senior officers
every corporation has a board of _______, which is a group of people who meet several times a year to make important decisions affecting the company
directors
________ are distributions of corporate profits to the shareholders
dividends
helps consumers correct credit card billing errors
fair credit billing act
a business broker is a person who sells homes for a living
false
a corporation pays taxes both on its income and on the amount it pays out in divdends
false
a corporations senior officers decide how much should be paid out in dividends
false
a sole proprietorship enables two or more people to be in control of a business
false
a valuator can help determine a price to offer a business and can write a sales contract
false
advertising fees for franchises are paid directly to the advertisers
false
although recommended, it is not necessary to consult an attorney before purchasing a franchise
false
consideration occurs when one party in a contract offers or agrees to do something and the other party accepts
false
copyrights remain in effect for 20 years after the death of the author
false
regulations that protect concumers include trademarks, zoning regulations, and consumer protection laws
false
the antitrust division of the FTC takes legal action aganist any business it believes has tried to monoplize an industry
false
the clayton acts makes it illegal for competitors to get together and set prices on the products or services they sell
false
the owner of a franchise must pay a weekly or monthly royalty fee to the seller of the franchise
false
you must file a written description of your business with the government when you raise money for a sole proprietorship
false
before buying an existing business, you should analyze the ________ for at least the past 3 years
financial records
if a franchise fails to make royalty payments, the franchisor can terminate the ________
franchise agreement
you may want to pay a lawyer to
give you advice on insurance coverage