Deck 56: Business Organizations

Question 1

To raise equity capital by crowdfunding, Data Analytica Inc.

A)must sell shares only online and directly to investors.
B)must go through an online fundraising platform registered with the SEC.
C)can simply create a video asking people to send money via the Internet.
D)can gain access to public funds only after filing a registration statement.

Answer 1

B

Question 2

As with other online businesses, the customers of Biz.com are heavily reliant on the firm's reputation. For an online business, dealing in good faith

A)can be more important than in a brick-and-mortar location.
B)is irrelevant.
C)involves minimal compliance with the laws of a targeted market.
D)is not a significant part of an effective customer service program.

Answer 2

A

Question 3

Outlier Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a drug case from one of those accounts. Outlier refuses to comply. On the government's appeal, it is most likely that a court will order

A)the owner of the account to "stand and deliver."
B)Outlier to comply with the warrant.
C)the government to abide by Outlier's refusal.
D)the foreign countries to seize Outlier's servers.

Answer 3

B

Question 4

Vera starts World Markets Inc., an online business to advertise and sell goods handcrafted in a variety of countries. The purpose of advertising law generally is to create marketplaces in which businesses can operate free of

A)deceptive and unfair practices.
B)international restrictions on speech.
C)the rules of private websites (such as Facebook).
D)competition.

Question 5

Beth starts Checklist to market a new app. Debit Bank loans $30,000 to Beth for the project. Later, the debt is most likely to be discharged in bankruptcy

A)if Beth provides a complete, accurate record of business transactions.
B)if the loan is not subject to an agreement that imposes personal liability.
C)if Beth's business is a sole proprietorship.
D)under no circumstances.

Question 6

The advantage of crowdfunding to a small entrepreneur is

A)selling shares online directly to investors.
B)fundraising without providing financial statements to potential investors.
C)simply creating a video asking people to send money via the Internet.
D)gaining access to public funds without filing a registration statement.

Question 7

Nina and Owen are general partners in Property Management L.P., a limited partnership. Without Nina's knowledge or consent, Owen defrauds the firm's clients, resulting in the firm's liability for the losses. The limited partners file a suit against Nina to recover their investments. She is most likely liable

A)if the clients are viewed as innocent third parties.
B)in a state that does not protect innocent partners from fraud suits.
C)under any circumstances.
D)under no circumstances.

Question 8

Trade Secrets Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a possible criminal case from one of those accounts. Before a court, as part of a refusal to comply with the order, Trade Secrets' best arguments include that the warrant

A)threatens the privacy of U.S. citizens.
B)all of the choices.
C)exceeds the power of the government to conduct a reasonable search.
D)will cause the firm to lose business because its clients will no longer trust it to keep their data secret.

Question 9

Personnel Resources Company considers using software to analyze employee behavior with the goal of predicting wrongdoing. In this situation, the ethical focus is on

A)the success of the software.
B)sanctions for something yet to be done.
C)questions of privacy.
D)whether data mining should occur only online.

Question 10

Predictive analytics in the digital realm focuses on

A)predicting certain behavior based on certain data.
B)analyzing certain data to predict digital developments.
C)analyzing certain predictions to monitor certain results.
D)predicting certain digital data based on reasoned analysis.

Question 11

Rick forms Study Groups Inc. to start a social media site online. He selects Takeaway as the domain name. Responsible for coordinating databases related to namespaces online

A)are the website hosts of online businesses.
B)is the U.S. Copyright Office.
C)is the U.S. Patent and Trademark Office.
D)is the Internet Corporation for Assigned Names and Numbers.

Question 12

Like other online businesses, Amazing.com collects and retains its customers' account numbers and other personal information. Keeping this data private will most likely

A)protect against liability for wrongful disclosure or misuse.
B)comply with federal and state laws that also cover offline businesses.
C)meet the standards of foreign countries' privacy laws.
D)all of the choices.

Question 13

Bill starts Castaway to market a new line of uniquely designed fishing gear. Delta Finance Company loans $50,000 to Bill for the project. Delta is most likely to recover the amount of the loan from Bill's personal assets

A)if Bill provides a complete, accurate record of business transactions.
B)if the loan is not subject to an agreement that imposes personal liability.
C)if Bill's business is a sole proprietorship.
D)under no circumstances.

Question 14

Pi and Quia are general partners in Risqué Investissements, a limited partnership. Without Pi's knowledge or consent, Quia defrauds potential investors into buying limited partnerships in the firm and steals the amounts of their investments. In a suit by those partners against Pi to recover for their losses, Pi is most likely liable

A)if the investors are viewed as innocent third parties.
B)if the investors are construed as limited partners.
C)under any circumstances.
D)under no circumstances.