ENT exam 2 set 1

Which of the following are types of corporations developed by the U.S. legal system?

LLC, Subchapter C, Subchapter S

a copyright can be claimed on creative materials generated such as

books, unpublished music, advertising copy, artwork

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

trademark permit

which of the following are results of violating a trademark

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

Two related entities that can help the business owner foresee the potential legal labilities are:

Board of advisors, board of directors

The critical issues of personal liability and the desire to limit exposure to the original equity investment led to the development of corporations. A corporation addresses both drawbacks by _____________.

Considering the business and the individual separate entities.

____________ are the least expensive corporation types to form

Limited liability corporations

Which of the following are the three basic types of legal business organization?

Partnership, corporation, sole proprietorship

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

Sole proprietorship

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

par value

A more complex business form that has two or more people sharing unlimited liability in a new business venture is called a general _________________

partnership

General and limited are two broad categories of

partnership

Which law requires that there be no discrimination in the hiring, management, or dismissal of employees with disabilities?

Americans with disabilities act

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

Subchapter C Corporations

___________ insures businesses from damages caused by workers in the performance of their jobs.

bonding

In new corporations, the shareholders and board of _____________ are often the same

directors

Which form of insurance covers liability for workers who are injured on the job?

workers compensation

Which of the following are excellent sources of information regarding regulatory requirements?

Chamber of commerce, Small business assistance centers, Local department of economic development, Small business administration

A sole proprietorship is very popular among individuals who:

Have a business where the costs and risks are very low, Have a very small business, Are unsure about their business idea.

Identify the true statements about a Subchapter C Corporation.

It considers the owners as employees and pays them salaries and bonuses, profits that are not paid out for such items as salaries are retained for future expansion *

Identify the typical requirements for a new business to obtain a city or county business license

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 examples of licenses and permits?

OSHA food-handling permits, Occupancy limits, Business licenses

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

Subchapter C

Which of the following are the characteristics of limited partners in a limited liability partnership?

They are typically allowed to work for the firm, They are considered passive investors, Their liability is limited to their investment in the business

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

contract

Many regulations enacted by the federal government do not apply to businesses with fewer than _____________ employees

50

Unlike a Subchapter C Corporation, a limited liability corporation (LLC)

Allows for the flexible treatment of profits from the organization

Which of the following are the characteristics of a Subchapter C corporation?

It does not provide any protection for the owners beyond their equity investment, It does not have any limits on shareholder participation

Which of the following statements are true regarding liability insurance?

It helps protect against lawsuit judgements, It covers the business for accidents, It covers product negligence

Which of the following are benefits of a Subchapter S Corporation?

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

Which of the following elements are required when forming a Subchapter C or S Corporation?

Location of the corporate headquarters, General nature of the business, Names, addresses, and titles of all founders

An advantage of the Subchapter __________ Corporation is that it allows the owners to report their income or losses on their personal income tax returns, thus avoiding double taxation

S

Which of the following is true regarding a board of advisors?

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

Which of the following are drawbacks to sole proprietorships?

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

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.

Which of the following questions should be considered by a new business owner before entering into a lease contract?

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

For tax purposes, all business must have a ____________

employer identification number

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

false

True or false: a Subchapter C Corporation treats fringe benefits that paid out as income for employees

false

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

general

Which form of business has at least two individuals who are partners in a venture but only one person declares a full pass through of all income on his or her federal taxes and assumes unlimited liability?

limited liability partnership

Because it is expensive to obtain and maintain, a patent should only be obtained if it contributes to the sustainable competitive advantage of the organization

patent

An individual who is unsure of his business idea, plans to keep his business very small, or has a minimal amount of cost and risk is more likely to select a ___________ as a business form

sole proprietorship

A __________ is a legal protection of the intellectual property that is associated with a specific business?

trademark

True or false: If a corporation suffers substantial losses, the founders will lose only his or her investment in the business

true

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

Which of the following must be formally addressed by both Subchapter C and Subchapter S Corporations?

Holding annual board meetings, reporting standards to local, state, and federal authorities, authorization of more shares of stock

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 damages?

bonding

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

details of the social responsibility policy

In which of the following business forms do the business debts flow directly to the owner?

general partnership, sole proprietorship

Subchapter S and subchapter C Corporations take their names from subchapters in the ___________ code

internal revenue

Which type of business organization is characterized by the fact that the person who owns the business and the business itself are treated as the same entity?

sole proprietorship

Which of the following are disadvantages associated with subchapter S corporations?

May require a lawyer to process paperwork, expensive and complex formation compared with sole proprietorships, limitation on the number of shareholders

An important feature of a Subchapter C corporation is that there are no limits to ____________

The number of shareholders that an organization can obtain

What type of insurance can be purchased to cover losses from employee embezzlement?

bonding

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

insurance

Which form of intellectual property protection is the most complex and expensive and covers a specific innovation?

patent

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

15

which of the following are patents

utility, plant, design

In recent years, the ___________ has become one of the most popular forms of incorporation for new business

LLC

A corporation pays a tax on its profits; then those after tax profits are paid as dividends to the owners, who then have to pay personal income taxes on the dividend income. This situation is referred to as _________

double taxation

Which of the following is NOT one of the three basic types of legal business organization?

franchise

Which type of insurance helps protect a business against lawsuit judgements?

liability

Which of the following are trademarked by most large companies?

Company name, company symbols, company tag lines

Identify a characteristic of a general partnership that is different from that of a sole proprietorship.

Partners are generally held to be jointly liable for all debts incurred by the partnership

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

general partnership