Business Ownership and Legal Considerations Quiz

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Questions and Answers

What is the primary purpose of patents?

To ensure exclusive rights for a lifetime

To restrict access to inventions for public benefit

To prevent competitors from entering the market

To provide a legal monopoly to inventors (correct)

What is the duration of a utility patent from the date of patent application filing?

Up to thirty years

Up to fifty years

Up to ten years

Up to twenty years (correct)

What is the purpose of a design patent?

To provide exclusive rights for up to thirty years

To prevent others from using any design for a lifetime

To restrict access to designs for public benefit

To protect a new, original, and ornamental design (correct)

What percentage of patent documents issued by the USPTO in recent years are utility patents?

Approximately 90% Signup and view all the answers

Which type of patent is issued for a new and distinct, invented or discovered asexually reproduced plant?

Plant patent Signup and view all the answers

What does a plant patent permit its owner to do?

Exclude others from making, using, or selling the plant Signup and view all the answers

For how long does a plant patent permit its owner to exclude others from making, using, or selling the plant?

20 years Signup and view all the answers

What is the term used when filing a provisional patent?

Patent pending Signup and view all the answers

What is a trademark?

A symbol or logo used to identify a business or product Signup and view all the answers

How long does a trademark last?

Life of the holder + 70 years Signup and view all the answers

What does a copyright protect?

The form of original works of authors, composers, etc. Signup and view all the answers

How long does a copyright last?

Life of the holder + 70 years Signup and view all the answers

What is a trade secret?

A confidential information that gives the owner a competitive advantage Signup and view all the answers

How long is a trade secret protected by federal law?

Indefinitely Signup and view all the answers

What is an example of a trade secret?

Google's search algorithm Signup and view all the answers

What is the term used to identify a registered trademark?

® Signup and view all the answers

What is a key feature of a Sole Proprietorship?

Unlimited personal liability Signup and view all the answers

Which business entity offers limited liability and pass-through taxation?

S Corporation Signup and view all the answers

What is a distinctive feature of a 'B' Corporation?

Emphasis on social and environmental performance Signup and view all the answers

What is a characteristic of a General Partnership?

Unlimited personal liability for partners Signup and view all the answers

Which entity may be subject to potential double taxation?

C Corporation Signup and view all the answers

What is a key advantage of a Limited Liability Company (LLC)?

Pass-through taxation Signup and view all the answers

What distinguishes a 'C' Corporation from an 'S' Corporation in terms of taxation?

Potential for double taxation Signup and view all the answers

What is a characteristic of a Not-for-Profit entity?

Tax-exempt status Signup and view all the answers

What type of business ownership involves common ownership and shared profits and losses?

General Partnership Signup and view all the answers

What is a key consideration for a 'B' Corporation that distinguishes it from other entities?

Social and environmental performance Signup and view all the answers

In what way do accountants and attorneys contribute to business setup and operations?

Provide expertise in financial and legal matters Signup and view all the answers

What is a key feature of a Non-Disclosure Agreement?

Protects business interests by keeping sensitive information confidential Signup and view all the answers

Study Notes

Business Ownership and Legal Considerations

Founders’ Agreement outlines rights and responsibilities, equity distribution, payment methods, and exit strategies for business partners.
Forms of ownership include Sole Proprietorship, General Partnership, "C" Corporation, "S" Corporation, Limited Liability Company (LLC), and "B" Corporation, each with distinct advantages and disadvantages.
Sole Proprietorship is the easiest to establish and entails unlimited personal liability.
General Partnership involves common ownership, shared profits and losses, and unlimited personal liability for partners.
"C" Corporation is a separate legal entity with limited liability for stockholders but involves more complexity and potential double taxation.
"S" Corporation offers limited liability and pass-through taxation but has certain restrictions and reporting requirements.
LLC is a popular choice for startups due to limited liability, pass-through taxation, and flexibility, but may require complex setup and reporting.
"B" Corporation emphasizes social and environmental performance and accountability, and is not available in all states.
Not-for-Profit entities have tax-exempt status and restrictions on profit distribution, with earnings reinvested for exempt purposes.
Business licenses and permits are necessary and vary by location, including occupancy codes, construction permits, and use of fictitious names.
Various agreements and contracts such as Non-Disclosure Agreements, Non-Compete Agreements, and Employee Contracts are essential for protecting business interests.
Accountants and attorneys play crucial roles in business setup and operations, providing expertise in financial and legal matters.

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Description

Learn about different forms of business ownership and the legal considerations involved in starting and running a business. Understand the advantages and disadvantages of Sole Proprietorship, General Partnership, "C" Corporation, "S" Corporation, Limited Liability Company (LLC), and "B" Corporation. Explore the importance of legal agreements, permits, and the role of accountants and attorneys in business setup.