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WorksheetsAddressing Legal Issues and Managing Risk
Total questions: 29
Worksheet time: 15mins
Tax-exempt, nonprofit corporations ________.
cannot make a profit
do not have legal liability
are set up with a specific mission to improve society
pay dividends more often than for-profit corporations
In limited liability companies ________.
income is taxed only once, as the personal earnings of members
personal assets of the owners are left legally unprotected
income is never taxed
income is taxed twice, corporately and personally
In a corporation, all profits go to ________.
reduce the surplus
the owners and the shareholders
the stockholders as salaries
the partners according to the terms of the agreement
Which of the following are not usually not-for-profit organizations?
trade associations
charitable foundations
churches
book stores
The main disadvantage of corporations is that corporate income is ________.
taxed only once
always high
taxed twice
taxed three times
Which is not a potential penalty for breaking a contract?
You may lose a share of the ownership of your business to the other party who signed the contract.
You may be sued in a court of law by the other party who signed the contract.
A court may order you to pay damages to the other party who signed the contract.
It can be costly.
A(n) ________ is an agreement between two or more parties that is enforceable by law.
trust
contract
understanding
None of the above.
________ are the building blocks of business.
Letters of agreements
Contracts
Personal relationships
Customer services
A good contract will spell out ________, or unforeseeable "acts of God" beyond anyone's control, for which neither party is responsible.
contingencies
liabilities
amendments
disasters
An injured party whose rights in a contract have been breached can bring a(n) ________ against the other party.
arbitration
motion
mediation
lawsuit
The time period in which legal action may be taken is the ________.
limit of liability
statute of legal obligations
statute of limitations
None of the above.
Some contracts specify that conflicts may be settled through ________ instead of court.
negotiation
coercion
arbitration
small claims
The four "A's" of a successful contract include ________.
A) avoid misunderstanding and assure work
B) assure payment and avoid liability
C) assess risk and analyze profit
Both A and B.
Every corporation is recognized and treated under the law as ________.
an entity, much like a person, that has expenses and earnings
a small business
a large business
if it were its owners and employees
Obtain a trademark in order to ________.
protect your logo
register your business name
protect all your intellectual property
protect your business name
Infringement of intellectual property is ________.
a business tactic
a crime
profitable
legal in some states
If you invent something and don't patent it, it falls into the public domain, meaning that ________.
you can sell your invention publicly without paying the U.S. Patent Office
anyone can manufacture your invention and profit from selling it without paying you
you can sell the right to manufacture the invention
you can save a lot of money
The form of protection offered under U.S. law to the authors of "original works of authorship" is a(n) ________.
patent
electronic right
trademark
copyright
What is used to identify and distinguish the source of a service rather than a product?
sales mark
trademark
service mark
intellectual property
You do not need a patent unless you ________.
1) have invented a product that you intend to market yourself or sell to a manufacturer
2) believe that someone else could successfully sell the product by copying your invention
Both 1 and 2.
None of 1 and 2.
You purchase $250,000 worth of insurance to protect your restaurant with a $10,000 deductible. How much money are you entitled to receive as a payout if a fire destroys your store which is valued at $250,000?
$240,000
$10,000
$250,000
$240,000 less co-payment
To protect against lawsuits brought by anyone injured by your product, you will need to buy ________.
liability insurance
business insurance
casualty insurance
an umbrella policy
________ protects people from having property or wealth stolen, lost or destroyed. There are many kinds and in order to purchase it you pay a monthly, quarterly or annual ________.
Insurance/carrying cost
Insurance/premium
Insurance/dividend
Insurance/maintenance fee
A low deductible will yield a ________.
lower premium
higher coverage plan
has no impact on the premium
higher premium
A ________ is the amount of loss or damage that you agree to cover before any insurance coverage takes over.
deductible
carrying cost
premium
co-insurance
________ insurance compensates employees for loss of income and for medical expenses due to job-related injuries.
Short-term disability
Disability
Injury
Worker's compensation
________ insurance is designed to cover you in the event that a business (its employees) fails to do something that causes harm to a customer.
Negligence
Errors and omissions
Product liability
Casualty
A(n) ________ is an official document that gives you the right to carry out a specific activity, such as an outdoor festival
license
certificate
permit
entitlement
Federal, state and local ________ may apply to a business and may affect what it can do, how it can do it, and when and where it can operate.
regulations
grants
taxes
zoning
