Question 1

In a private offering, capital is raised through a private placement memorandum distributed to select potential investors.

Accepted Answer

A) True 
 B)False  True

Question 2

Josh and Kya form Longview Associates, a limited part?nership, to invest in real estate. Compared to a sole proprietorship and a general partnership, a limited partnership has limited

Accepted Answer

A)   business purposes.
B)   investment opportunities.
C)   personal liability.
D)   requirements.

Question 3

Philo wants to start a new business enterprise. Because it is difficult, if not impossible, to keep up with the many legal rules that govern business conduct, Philo most likely needs to consult

Accepted Answer

A)   an accountant.
B)   an attorney.
C)   an experienced small-business owner.
D)   a partner.

Question 4

A trademark should be registered with both the federal and state governments.

Accepted Answer

A) True 
 B)False

Question 5

In a public offering, a certain number of shares are offered at a set price to members of the public.

Accepted Answer

A) True 
 B)False

Question 6

Quia and Rafi form SA, LLC, a limited liability company, to operate Superior Athletics, a fitness center. Compared to a sole pro?prietorship and a general partnership, a limited liability company has limited

Accepted Answer

A)   business purposes.
B)   investment opportunities.
C)   personal liability.
D)   requirements.

Question 7

Select Sales Company's offer of shares of stock in itself to anyone who is willing to pay $60 per share is

Accepted Answer

A)   a private offering.
B)   a private offering and a public offering.
C)   a public offering.
D)   neither a private offering nor a public offering.

Question 8

Sally's Salon & Day Spa hires only independent contractors such as Tina as workers. This hiring practice allows the employer to avoid

Accepted Answer

A)   all laws governing employment relationships.
B)   all laws governing employment relationships except tax-withhold?ing requirements.
C)   all laws governing employment relationships except those prohib?it?ing employment discrimination.
D)   no laws governing employment relationships.

Question 9

A right of first refusal permits a shareholder to refuse to sell his or her shares to the corporation that issued them.

Accepted Answer

A) True 
 B)False

Question 10

All corporate business forms offer limited liability to their owners.

Accepted Answer

A) True 
 B)False

Question 11

Bild-It-Rite Corporation uses independent contractors. Bild-It-Rite can

Accepted Answer

A)   be sued by a contractor for a violation of discrimination laws.
B)   exercise little control over how the contractors perform.
C)   obtain workers' compensation insurance for the contractors.
D)   withhold income taxes from payments to the contractors.

Question 12

Lee wants to begin importing athletic shoes under the corporate name Mercury, Inc. Mercury should include most of its corporate rules in

Accepted Answer

A)   the articles of incorporation.
B)   the bylaws.
C)   the corporate charter.
D)   the minutes of the first meeting of the board of directors. B

Question 13

Mick starts a business to market nationally long-distance phone time as Mick's Minutes. Registering his trademark with the U.S. Patent and Trademark Office provides nationwide protection for the mark

Accepted Answer

A)   only if the mark is currently in use.
B)   only if the mark is not yet in use but will be within six months.
C)   if the mark is currently in use or will be in use within six months.
D)   under any circumstances.

Question 14

Demi operates Eyes Wide Open, a small-business optician enterprise. To raise capital, Demi contacts Foster, a venture capitalist. Besides capital, Foster will most likely

Accepted Answer

A)   assist in the drafting of a business plan.
B)   decline a proportion of future profits.
C)   offer assistance with respect to marketing.
D)   refrain from demanding operational control.

Question 15

Rudy operates Silver Buckles, a small-business equine enterprise. To raise capital, Rudy contacts Thad, a venture capitalist. Besides capital, Thad will most likely

Accepted Answer

A)   assist in the drafting of a business plan.
B)   decline a proportion of future profits.
C)   offer assistance with respect to business strategy.
D)   refrain from demanding operational control.

Question 16

When Chez Cheese Company is incorporated in Delaware, the state agency with which the business name is filed approves Chez Cheese's name as a trade name. This approval is le?gal permission to own the name

Accepted Answer

A)   only in Delaware.
B)   only in the United States.
C)   only in the United States and other countries in North America.
D)   throughout the world.

Question 17

Nick designs a new office-management software program and incorpo?rates Nick's Niche, Inc., to make and market it. To sell a limited number of shares of stock to the public, the firm must register the shares with

Accepted Answer

A)   a lawyer with securities law expertise.
B)   a venture capitalist.
C)   the Securities and Exchange Commission.
D)   the U.S. Patent and Trademark Office.

Question 18

A limited liability company's limited liability may be lost by contract.

Accepted Answer

A) True 
 B)False

Question 19

To protect trade secrets, a company can require its employees to agree not to divulge those secrets.

Accepted Answer

A) True 
 B)False  True

Question 20

Typically, in exchange for a loan, a bank will demand operational control over a company.

Accepted Answer

A) True 
 B)False

Exam 42: Law for Small Businesses

In a private offering, capital is raised through a private placement memorandum distributed to select potential investors.

Correct AnswerverifiedTrue

Josh and Kya form Longview Associates, a limited part?nership, to invest in real estate. Compared to a sole proprietorship and a general partnership, a limited partnership has limited

Correct AnswerverifiedShow Answer

Philo wants to start a new business enterprise. Because it is difficult, if not impossible, to keep up with the many legal rules that govern business conduct, Philo most likely needs to consult

Correct AnswerverifiedShow Answer

A trademark should be registered with both the federal and state governments.

Correct AnswerverifiedShow Answer

In a public offering, a certain number of shares are offered at a set price to members of the public.

Correct AnswerverifiedShow Answer

Quia and Rafi form SA, LLC, a limited liability company, to operate Superior Athletics, a fitness center. Compared to a sole pro?prietorship and a general partnership, a limited liability company has limited

Correct AnswerverifiedShow Answer

Select Sales Company's offer of shares of stock in itself to anyone who is willing to pay $60 per share is

Correct AnswerverifiedShow Answer

Sally's Salon & Day Spa hires only independent contractors such as Tina as workers. This hiring practice allows the employer to avoid

Correct AnswerverifiedShow Answer

A right of first refusal permits a shareholder to refuse to sell his or her shares to the corporation that issued them.

Correct AnswerverifiedShow Answer

All corporate business forms offer limited liability to their owners.

Correct AnswerverifiedShow Answer

Bild-It-Rite Corporation uses independent contractors. Bild-It-Rite can

Correct AnswerverifiedShow Answer

Lee wants to begin importing athletic shoes under the corporate name Mercury, Inc. Mercury should include most of its corporate rules in

Correct AnswerverifiedB

Mick starts a business to market nationally long-distance phone time as Mick's Minutes. Registering his trademark with the U.S. Patent and Trademark Office provides nationwide protection for the mark

Correct AnswerverifiedShow Answer

Demi operates Eyes Wide Open, a small-business optician enterprise. To raise capital, Demi contacts Foster, a venture capitalist. Besides capital, Foster will most likely

Correct AnswerverifiedShow Answer

Rudy operates Silver Buckles, a small-business equine enterprise. To raise capital, Rudy contacts Thad, a venture capitalist. Besides capital, Thad will most likely

Correct AnswerverifiedShow Answer

When Chez Cheese Company is incorporated in Delaware, the state agency with which the business name is filed approves Chez Cheese's name as a trade name. This approval is le?gal permission to own the name

Correct AnswerverifiedShow Answer

Nick designs a new office-management software program and incorpo?rates Nick's Niche, Inc., to make and market it. To sell a limited number of shares of stock to the public, the firm must register the shares with

Correct AnswerverifiedShow Answer

A limited liability company's limited liability may be lost by contract.

Correct AnswerverifiedShow Answer

To protect trade secrets, a company can require its employees to agree not to divulge those secrets.

Correct AnswerverifiedTrue

Typically, in exchange for a loan, a bank will demand operational control over a company.

Correct AnswerverifiedShow Answer

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B

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