Question 1

A name used by a sole proprietorship for a business instead of the proprietor's actual name is called

Accepted Answer

A)  Commercial name 
B)  UCC name 
C)  Trade name 
D)  Legal name 
A)  Commercial name 
B)  UCC name 
C)  Trade name 
D)  Legal name

Question 2

What events can cause a sole proprietorship to terminate?

Accepted Answer

A sole proprietorship is terminated by e

Question 3

The person who is entitled to the profits of a business based on the percentage of ownerships is

Accepted Answer

A)  Principal 
B)  Executive 
C)  Board member 
D)  Manager 
A)  Principal 
B)  Executive 
C)  Board member 
D)  Manager

Question 4

Reid Sterling owns a sole proprietorship called Dunkle Distributing. Dunkle Distributing is a

Accepted Answer

A)  Brand Name 
B)  Commercial Name 
C)  Trade Name 
D)  Legal Name 
A)  Brand Name 
B)  Commercial Name 
C)  Trade Name 
D)  Legal Name

Question 5

Which governmental organization oversees the regulation of franchisors?

Accepted Answer

A)  International Trade Commission 
B)  National Commerce Agency 
C)  Federal Commerce Commission 
D)  Federal Trade Commission 
A)  International Trade Commission 
B)  National Commerce Agency 
C)  Federal Commerce Commission 
D)  Federal Trade Commission

Question 6

Cyndy is a sole proprietor of a day care. She wishes to build a new playground and also purchase new toys. She plans on doing this in stages and therefore wants a loan where she can draw against a predetermined amount as she needs it rather than getting a lump sum loan. Which type of loan would you recommend for Cyndy?

Accepted Answer

A)  Commercial loan 
B)  Private loan 
C)  Collateral 
D)  Line of credit 
A)  Commercial loan 
B)  Private loan 
C)  Collateral 
D)  Line of credit

Question 7

In the case, Biller v. Snug Harbor Jazz Bistro of Louisiana, the court ruled

Accepted Answer

A)  The sole proprietorship continued after the death of the owner due to judicial action. 
B)  The sole proprietorship terminated but only after the estate was settled and closed. 
C)  The sole proprietorship continued to exist. 
D)  The sole proprietorship terminated upon the death of the sole proprietor. 
A)  The sole proprietorship continued after the death of the owner due to judicial action. 
B)  The sole proprietorship terminated but only after the estate was settled and closed. 
C)  The sole proprietorship continued to exist. 
D)  The sole proprietorship terminated upon the death of the sole proprietor.

Question 8

In the case of Lewis v. Moore, the court ruled

Accepted Answer

A)  The sole proprietor has limited liability. 
B)  The sole proprietor has the right to dissolve the proprietorship at any time. 
C)  The sole proprietor has a fiduciary duty to the employees. 
D)  The sole proprietor must operate within certain corporate formalities. 
A)  The sole proprietor has limited liability. 
B)  The sole proprietor has the right to dissolve the proprietorship at any time. 
C)  The sole proprietor has a fiduciary duty to the employees. 
D)  The sole proprietor must operate within certain corporate formalities.

Question 9

A franchise conducts business

Accepted Answer

A)  According to an established contract. 
B)  As a corporation. 
C)  According to default rules. 
D)  Only as a sole proprietorship. 
A)  According to an established contract. 
B)  As a corporation. 
C)  According to default rules. 
D)  Only as a sole proprietorship.

Question 10

Which of the following statements about a franchise is correct?

Accepted Answer

A)  Start-up is simple with very little filing. 
B)  A franchise faces mandatory disclosures. 
C)  All transactions of a franchise are protected by privacy laws. 
D)  A franchise only faces state regulations. 
A)  Start-up is simple with very little filing. 
B)  A franchise faces mandatory disclosures. 
C)  All transactions of a franchise are protected by privacy laws. 
D)  A franchise only faces state regulations.

Question 11

A __________ is a business entity that has a proven track record of success and sells the right to operate the business and use the business's trade secrets, trademarks, products, and so on.

Accepted Answer

A)  Sole proprietorship 
B)  LLC 
C)  Franchise 
D)  LLLP 
A)  Sole proprietorship 
B)  LLC 
C)  Franchise 
D)  LLLP

Question 12

Josh is a sole proprietor of an ice cream shop. Regina, a customer, slips and fall on some melted mint chocolate chip ice cream on the floor and breaks her leg. Regina files suit and wins a judgment of $50,000. Josh does not have any insurance and the total value of the assets of the ice cream shop is $10,000. Which statement below is correct?

Accepted Answer

A)  Josh will only have to give Regina the money from the assets of the business, $10,000. 
B)  Josh will not be required to pay anything because he does not have insurance. 
C)  Josh will have to pay $10,000 and then set up a payment plan to pay off the balance. 
D)  Josh will have to use his own personal assets to pay the remainder of the judgment. 
A)  Josh will only have to give Regina the money from the assets of the business, $10,000. 
B)  Josh will not be required to pay anything because he does not have insurance. 
C)  Josh will have to pay $10,000 and then set up a payment plan to pay off the balance. 
D)  Josh will have to use his own personal assets to pay the remainder of the judgment.

Exam 27: Choice of Business Entity and Sole Proprietorships

A name used by a sole proprietorship for a business instead of the proprietor's actual name is called

What events can cause a sole proprietorship to terminate?

The person who is entitled to the profits of a business based on the percentage of ownerships is

Reid Sterling owns a sole proprietorship called Dunkle Distributing. Dunkle Distributing is a

Which governmental organization oversees the regulation of franchisors?

In the case, Biller v. Snug Harbor Jazz Bistro of Louisiana, the court ruled

In the case of Lewis v. Moore, the court ruled

A franchise conducts business

Which of the following statements about a franchise is correct?

A __________ is a business entity that has a proven track record of success and sells the right to operate the business and use the business's trade secrets, trademarks, products, and so on.

Legal Foundations and Thinking Strategically

Business, Societal, and Ethical Contexts of Law

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution

Contracts: Overview, Definition, Categories, and Source of Law

Mutual Assent: Agreement and Consideration

Capacity and Legality

Enforceability

Performance

Breach and Remedies

Contracts for the Sale of Goods: Overview of Article 2

Sales Contracts: Agreement, Consideration, and the Statute of Frauds

Title, Allocation of Risk, and Insurable Interest

Performance and Cure in Sales Contracts

Breach and Remedies in a Sales Transaction

UCC Article 2A: Lease Contracts

Sales Warranties

Definition, Creation, and Categories of Negotiable Instruments

Negotiation, Endorsements, and Holder in Due Course

Liability, Defenses, and Discharge

Checks, Deposits, and Financial Institutions

Secured Transactions

Creditors Rights

Alternatives for Insolvent Borrowers

Bankruptcy

Partnerships

Limited Liability Partnerships and Limited Liability Companies

Corporations: Formation and Organization

Corporate Transactions: Acquisitions and Mergers

Overview of the Securities Market: Definition, Categories, and Regulation

Regulation of Issuance: The Securities Act of 1933

Regulation of Trading: The Securities Exchange Act of 1934

Regulation of Corporate Governance

Regulation of Financial Markets

Agency Formation, Categories, and Authority

Duties and Liabilities of Principals and Agents

Employment at Will

Employment Regulation and Labor Law

Employment Discrimination

Torts and Products Liability

Administrative Law

Consumer Protection

Criminal Law and Procedure

Insurance Law

Environmental Law

Personal Property, Real Property, and Land Use Law

Wills, Trusts, and Estates

Intellectual Property

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