Ch3 LM ORGANIZING AND FINANCING A NEW VENTURE
37. Business angels are wealthy individuals who invest in early-stage ventures in exchange for the excitement of launching the business, as well as a share of the firm's financial gains.
...T
17. The highest marginal income tax rate for taxable personal income is 45 percent.
F
20. "Certification marks" cover memberships in groups (e.g., a sorority or a labor union).
F
23. A "color mark" is considered to be one four types of "marks" used to try to protect intellectual property.
F
28. An idea is enough to be patented.
F
3. In a corporate legal entity, the personal assets of the owners are separate from the business' assets, but the personal liabilities of the owners are not.
F
32. Nondisclosure agreements prohibit the creator of an idea or other form of intellectual property from sharing it with others once it has been presented the first time.
F
34. "Certification marks" are intellectual property rights in the form of inventions and information (e.g., formulas, processes, customer lists, etc.) not generally known to others.
F
36. A trademark must be novel in order to receive protection.
F
4. Limited liability in the corporate business structure means creditors can seize only some of the corporation's assets.
F
F. 38. "Service marks" refer to services such as those provided by a sorority or a labor union.
F
29. "Design patents" cover most inventions pertaining to new products, services, and processes.
F cover the "appearance " of items (e.g. sports uniforms , electronic, products, autos
11. The equity capital sources for a proprietorship are partners, families, and friends.
F equity source for proprietorship is owners
9. Financial bootstrapping maximizes the need for financial capital.
F minimizing need for financial capital and finding unique ways of financing a new venture
24. A copyright must be registered with the U.S. Copyright Office in order for a work to be protected.
F traditional way to establish a copyright is to "publish" your book or other work accompanied by a copyright notice using the word "copyright or symbol
31. "Patents" are intellectual property rights granted for inventions that are useful, novel, and obvious.
F useful, novel , non-obvious
6. Limited liability companies (LLCs) are owned by shareholders with limited liability and its earnings are taxed at the corporate rate.
F ventures investors and equity offerings to owners
. 18. There are four types of "marks" that can be used to try to protect intellectual property.
T
1. The difference between a limited partnership and a general partnership is that the limited partnership has partners who actively manage the day-to-day operations but also has passive investors.
T
10. The income received by a proprietorship is taxed at personal tax rates.
T
14. Professional corporations (PCs) and service corporations (SCs) are corporate structures that "states" provide for professionals such as physicians, dentists, lawyers, and accountants.
T
15. The marginal tax rate for the first dollar of taxable income is higher for corporations than for individuals.
T
16. Based on 2012 tax laws, the highest possible marginal tax table rate is higher for corporations than for individuals.
T
19. Patents, trade secrets, trademarks, and copyrights are intangible assets.
T
2. A limited partnership limits certain partners' liabilities to pay the venture's obligations to the amount each paid for their partnership interests.
T
21. "Collective marks" cover memberships in groups (e.g., a sorority or a labor union).
T
10. Which of the following numbers of shareholders is allowed in a Subchapter S (or S) corporation business form? a. 74 b. 125 c. 130 d.130 e. 500 d. 500
a. 74
32. Business angels typically initiate their investments during the: a. early stages of a venture's lifecycle b. middle stages of a venture's lifecycle c. maturity stage of a venture's lifecycle d. all of the above
a. early stages of a venture's lifecycle
26. Which of the following are intellectual property rights granted for inventions that are useful, novel, and non-obvious? a. patents b. trademarks c. legal disclaimers d. copyrights e. trade secrets
a. patents
1. In which form of business organization are the owners not offered the protection of limited liability? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation e. limited liability corporation
a. proprietorship
3. Which form of business organization is characterized by having the shortest start-up time and lowest legal costs? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation e. limited liability corporation
a. proprietorship
42. The term that refers only to words, symbols, shapes, and similar items associated with products is: a. trademarks b. service marks c. collective marks d. certification marks
a. trademarks
11. Based on 2012 tax schedules, the first dollar of personal taxable income is taxed at which of the following marginal tax rates: a. 05.0% b. 10.0% c. 15.0% d. 20.0% e. 25.0%
b. 10%
b. 36. Intellectual property rights to "writings" in written and electronically-stored forms are protected by: a. Patents b. copyrights c. trade secrets d. trademarks
b. copyrights
8. In a general partnership, legal action that treats all partners equally as a group is called: a. joint and several liability b. joint liability c. limited liability d. accrued liability e. general liability
b. joint liability
37. Which of the following forms of protecting intellectual property currently has a protection limit of 20 years? a. copyrights b. patents c. trade secrets d. trademarks
b. patents
6. Which of the following is not a right or a duty of general partners? a. participation in profits and losses b. some liability for partnership obligations c. veto right on new partners d. eventual return of capital e. access to partnership books
b. some liability for partnership obligations
28. Which of the following are intellectual property rights that allow firms to differentiate their products and services through the use of unique marks which allow consumers to easily identify the source and quality of the products and services? a. patents b. trademarks c. legal disclaimers d. copyrights e. trade secrets
b. trademarks
39. Which of the following is not a "kind" of patent? a. Utility b. Design c. Mark d. Plant e. Business method
c. Mark
7. The rules and procedures established to govern the corporation are called the a. corporate charter b. articles of incorporation c. corporate bylaws d. confidentiality disclosure agreements
c. corporate bylaws
4. Which form of business organization typically offers the easiest transfer of ownership? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation e. general partnership
c. corporation
38. Certification marks are typically used to: a. indicate membership in a trade group b. indicate a certain brand of service c. indicate quality d. are symbols used to associate products to a specific brand
c. indicate quality
25. Intellectual property can be protected by all of the following except: a. patents b. trademarks c. legal disclaimers d. copyrights e. trade secrets
c. legal disclaimers
33. Which of the following forms of protecting intellectual property had its protection limit increased from 17 to 20 years? a. copyrights b. trademarks c. patents d. trade secrets
c. patents
. 34. Patents are intellectual property rights granted for inventions that are: a. not useful, novel, and non-obvious b. not useful, not novel, and obvious c. useful, novel, and non-obvious d. useful, not novel, and obvious
c. useful, novel, and non-obvious
35. Patents that cover most inventions pertaining to new products, services, and processes, are referred to as: a. design patents b. plant patents c. utility patents d. electrical patents e. mechanical patents
c. utility patents
13. Based on 2012 tax schedules, the highest marginal tax rate on personal taxable income is: a. 25.0% b. 28.0% c. 33.0% d. 35.0% e. 40.0%
d. 35.0%
31. Wealthy individuals who invest in early stage ventures in exchange for the excitement of launching a business and a share in any financial rewards are known as: a. creditors b. white knights c. corporate raiders d. business angels e. stakeholders
d. business angels
29. Which of the following are intellectual property rights to writings in written and electronically stored forms? a. patents b. trademarks c. legal disclaimers d. copyrights e. trade secrets
d. copyrights
2. In which form of business organization is the taxation effects characterized by the income flowing to shareholders taxed at personal tax rates? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation e. general partnership
d. subchapter S corporation
5. Which form of business organization is characterized as having unlimited life? a. proprietorship b. limited partnership c. limited liability corporation d. subchapter S corporation e. general partnership
d. subchapter S corporation
14. Based on 2012 tax schedules, the highest marginal tax rate on corporate taxable income is: a. 25.0% b. 28.0% c. 35.0% d. 38.0% e. 39.0%
e. 39.0%
40. Which of the following is not a "type" of mark? a. Trademark b. Service mark c. Collective mark d. Certification mark e. Design mark
e. Design mark
41. During the development stage, seed financing chiefly comprises: a. funds from business angels and venture capitalists b. the entrepreneur's personal assets c. funds from family and friends d. a, b, and c e. only b and c
e. only b and c
30. Which of the following are not sources of seed and start-up financing? a. family and friends b. the entrepreneur's physical and financial assets c. business angels d. venture capitalists e. stock and bond markets
e. stock and bond markets
27. Which of the following are intellectual property rights in the form of inventions and information such as formulas, processes, and customer lists that are not generally known to others and which convey economic advantage to the holders? a. patents b. trademarks c. legal disclaimers d. copyrights e. trade secrets
e. trade secrets
9. Which of the following business organizational forms provides the owners with limited investor liability and passes its income before taxes through to the owners? a. partnership b. subchapter S (or S) corporation c. regular or (C ) corporation d. limited liability company (LLC) e. both a and b f. both b and d
f. both b and d
12. The maximum number of owners in a Subchapter S corporation is 150.
F
13. An S corporation provides unlimited liability for its shareholders.
F provides limited liability for shareholders; plus corporate income is taxed like personal income to the shareholders
22. Most trademarks take the form of names, words, or graphic designs.
T
25. A work does not need to be registered to receive copyright protection; the work's creation is enough to provide copyright protection.
T
26. There are four kinds of patents.
T
27. "Business method" is one kind of patent.
T
30. "Business method" patents protect a specific way of doing business and the underlying computer codes, programs, and technology.
T
33. Confidential disclosure agreements are used to protect intellectual property when disclosure must be made to an outside individual or organization.
T
35. "Trademarks" are intellectual property rights that allow firms to differentiate their products and services through the use of unique marks.
T
39. "Certification marks" provide indications of quality.
T
40. Copyrights are intellectual property rights to writings in printed and electronically stored forms.
T
5. The articles of incorporation are the basic legal declarations contained in the corporate charter.
T
7. Partnerships are treated with pass-through taxation. This means that profits and losses of the business pass directly through to investors on the basis specified in the partnership agreement.
T
8. An employment contract is an agreement between an employer and employee about the terms and conditions of employment including the employee's agreement to keep confidential information secret and to assign ideas and inventions to the employer.
T
