Deck 6: Legal Considerations

Question 1

Which of the following company names does not require formal registration for a sole proprietorship?

A) Eager Beaver
B) Fanciful Flowers
C) Sunlight Spa
D) Peter Wan's Painting Professionals

Answer 1

D

Question 2

Under which business form, does the owner have complete control over the conduct and management of the business?

A) Limited partnership
B) General partnership
C) Sole proprietorship
D) Corporation

Answer 2

C

Question 3

If your business is paid $15,000 for providing services to a client, but it cost you $6000 in supplies and equipment in order to provide that service, then you will be taxed on:

A) $15 000
B) $6000
C) $21 000
D) $9000

Answer 3

D

Question 4

The _____ structure of a co-op is maintained by a one-member/one- ______ system.

A) Private; share
B) Public; share
C) Democratic; vote
D) Autocratic; vote

Question 5

As a sole proprietor, your taxes are:

A) More complex, compared to a corporation.
B) Declared on a separate form provided by Revenue Canada.
C) Fairly simple, since your business income is declared on your personal tax return.
D) Paid in installments throughout the year, but keep separate from your personal employment income.

Question 6

A co-operative is owned and operated by:

A) The public sector
B) The provincial government
C) The federal government
D) Its membership

Question 7

Small businesses in Ontario must register for and start collecting HST once their business makes:

A) A profit.
B) Credit available to its customers.
C) Over $30,000.
D) Dividend payments to its shareholders.

Question 8

Which of the following is considered a disadvantage of a limited partnership?

A) Difficulty in changing ownership
B) Limited liability
C) Growth potential
D) Great access to capital

Question 9

Credit unions are:

A) Agricultural co-operatives
B) Marketing co-operatives
C) Financial co-operatives
D) Manufacturing co-operatives

Question 10

All of the following are advantages of a general partnership, except:

A) Unlimited liability
B) Simplicity and ease of organization
C) Increased ability to obtain capital
D) Pooling of financial resources

Question 11

Many small businesses are no longer using Excel, instead preferring the use of _______ to handle estimates, invoice clients, and keep track of expenses.

A) Quicken
B) Freshbooks
C) MacBook
D) iAccounting

Question 12

A general partnership is most similar to a _______, expect for the number of people running the business.

A) Corporation
B) Limited partnership
C) Multiple partnership
D) Sole proprietorship

Question 13

All of the following are advantages of the sole proprietorship form of business organization, except:

A) Tax simplicity
B) Individual control
C) No sharing of profits
D) Limited liability

Question 14

When it comes to selecting a business name to be registered, or for the purpose of incorporation, all of the following apply except:

A) The name must be acceptable to the Registrar of Companies in your province.
B) Names are generally approved on the first submission.
C) Any name that is similar to a name already registered will be rejected to avoid public confusion.
D) The name is typically reserved for your exclusive use for 90 days.

Question 15

In Ontario, small businesses should plan to pay approximately ______ in taxes, when considering both HST and income tax that they must surrender to Revenue Canada at the end of the year.

A) 10-15%
B) 20-30%
C) 35-50%
D) 60-80%

Question 16

In order to incorporate, a business must be earning:

A) Less than $30,000
B) In excess of $100,000
C) In excess of $500,000
D) There is no specific earnings threshold for incorporation

Question 17

How do survival rates of co-operatives compare to those of other business corporations?

A) Co-operatives are less sustainable than other business corporation.
B) The survival rate of a co-operative enterprise is more than twice that of other business corporations after 10 years.
C) The survival rate of a co-operative enterprise is about half that of other business corporations after 10 years.
D) There is no research which compares the sustainability of co-operatives to that of other business corporations.

Question 18

Which of the following is considered to be a disadvantage of the general partnership form of business organization?

A) Growth potential
B) Divided authority
C) Greater access to capital
D) Greater talent pool

Question 19

All of the following are examples of Canadian co-operative enterprises, except:

A) Mountain Equipment Co-operative
B) Desjardins
C) The Co-operators Insurance
D) Sporting life

Question 20

Which of the following is an example of a regular deduction your business will be required to make from employees' paycheques?

A) Fitness memberships
B) Parking
C) Dental insurance
D) Employment Insurance

Question 21

If your business has taxable revenues which do not exceed ______ you do not have to register for the GST or HST.

A) $30,000
B) $50,000
C) $100,000
D) All businesses in Canada have to register for the GST or HST.

Question 22

How long is a registered trademark valid?

A) 1 year
B) 5 years
C) 15 years
D) Indefinitely

Question 23

Which of the following terms is used to describe a business owner with whom you have formed a relationship over time and respect them for the advice and consultation they can offer to your small business?

A) Board officer
B) Director
C) Mentor
D) Ethics agent

Question 24

Which of the following is not patentable?

A) A composition
B) A process
C) An idea
D) An apparatus

Question 25

Which of the following is not one of the three broad approaches to managing risk?

A) Reduce it
B) Renew it
C) Transfer it
D) Retain it

Question 26

The Harmonized Sales Tax (HST) is:

A) A tax paid only by businesses operating in the music industry.
B) The name of the tax that the federal government charges incorporated businesses only.
C) The tax that combines the Employment tax and the Pension tax.
D) A tax which is the integration of the provincial sales tax and the federal government's Goods and Services Tax (GST).

Question 27

A ______ is a word, symbol, picture, design, or combination of these that distinguishes your goods and services from those of others in the marketplace.

A) Trademark
B) Patent
C) Copyright
D) Registered symbol

Question 28

Which of the following types of insurance covers your liability to customers injured on your premises, or injured off your premises by a product you have sold to them?

A) Business interruption or loss-of-income insurance
B) Credit insurance
C) Business interruption insurance
D) General liability insurance

Question 29

A copyright exists for:

A) 5 years
B) 15 years
C) Until the death of the copyright holder
D) For 50 years beyond the death of the copyright holder

Question 30

A ______ is a body of elected or appointed members who jointly oversee the activities of a company or organization.

A) board of directors
B) regency team
C) mentor
D) advisory board

Question 31

Which of the following types of insurance will enable you to continue to pay the bills if your business should be closed down by damage due to fire, flood, or other catastrophe?

A) Credit insurance
B) Business interruption or loss-of-income insurance
C) Key-person insurance
D) General liability insurance

Question 32

Federal and provincial employment standards in Canada deal with all of the following, except:

A) Hours of work
B) Scheduling conflicts
C) Minimum wages
D) Overtime pay

Question 33

Patents have to be filed:

A) Before publication
B) Within 1 year of publication
C) Within 5 years of publication
D) Within 60 days of publication

Question 34

A(n) _____ is a group set up to meet regularly to review business plans and new projects and also to give feedback, as needed, whenever special questions arise.

A) board of trustees
B) board of directors
C) board of governors
D) advisory board

Question 35

What period of time is covered by a patent?

A) 10 years
B) 20 years
C) 30 years
D) 50 years

Question 36

Which of the following did Canadians vote as the number one invention in the "Greatest Canadian Invention"?

A) The Telephone (1876, Alexander Graham Bell)
B) The Wonderbra (1964, Louise Poirier)
C) The Zipper (1913, Gideon Sundback)
D) Insulin (1921, Frederick Banting, Charles Best)

Question 37

A(n) ________ gives you the right to preclude others from reproducing or copying your original published work.

A) Patent
B) Trademark
C) Industrial design
D) Copyright

Question 38

Which of the following types of insurance protects you from extraordinary bad debt losses due to a customer going out of business?

A) Key-person insurance
B) Credit insurance
C) Business interruption insurance
D) Business premises insurance

Question 39

Which of the following types of insurance considered life insurance purchased by the business with the business being the sole beneficiary?

A) Key-person insurance
B) Credit insurance
C) Business interruption insurance
D) Business premises insurance

Question 40

All of the following items are patentable, except:

A) A computer program
B) A window opening device
C) A tool
D) A method of making wine

Question 41

Under the sole proprietorship business form, the owner's personal assets (home, cottage, etc.) are not at risk should the business venture encounter financial distress.

Question 42

Mandatory deductions including income tax, Employment Insurance (EI), and the Canada Pension Plan (CPP), must be remitted to Industry Canada every month.

Question 43

Limited partners have one major power-the ability to remove the general partner(s).

Question 44

A business name which implies a connection with or approval of the Royal Family, is likely to be rejected.

Question 45

The best approach to selecting a name for your business is to choose a name that is one syllable and has many rhyming words.

Question 46

In a co-operative, it is possible for some members to exert greater control over the direction of the business by making a greater financial investment than other members.

Question 47

A limited liability partnership (LLP) is typically only available to manufacturing businesses.

Question 48

One of the most common means of shifting at least some of the risk associated with the occurrence of a major catastrophe is through insurance.

Question 49

All government employees are prohibited from signing an NDA.

Question 50

In a co-operative, membership may consist of employees or producers but not customers.

Question 51

If you use alternative spellings in your business name, or insert punctuation marks or numbers to try to add a bit of flair, it is more likely to be remembered.

Question 52

A non disclosure agreement (NDA) allows you to share details of your intellectual property with other people whose input you may be seeking without jeopardizing the information.

Question 53

Limited partners can participate in a single aspect of the business (for instance, sales or marketing), but they cannot participate in the general operational activities of the business.

Question 54

For companies with publicly traded stock, the responsibilities of the board of directors are much more rigorous and complex than for those of other types of companies.

Question 55

Another name used for the board of directors is the board of trustees.

Question 56

A(n) __________ comprises the features of shape, configuration, pattern, or ornament applied to a finished article made by hand, tool, or machine.

A) Industrial design
B) Copyright
C) Patent
D) Trademark

Question 57

Not-for-Profit organizations cannot incorporate in Canada.

Question 58

A sole proprietorship regularly earning in excess of $40,000 to $50,000 of taxable income annually is not large enough to warrant incorporation.

Question 59

A potential business name which is similar to (or contractions of) the names of companies already in business, are likely to be accepted providing the business is in a different field.

Question 60

Every business requires a municipal licence from the region in which they operate.

Question 61

List the typical duties performed by the board of directors.

Question 62

Compare a private company to a public company.

Question 63

What is meant by "patent pending"?

Question 64

What makes a trademark valuable?

Question 65

What is a trade secret? Provide some examples.

Question 66

Is there a role for an advisory board in small business with only four employees?

Question 67

What are the three basic criteria that your device or invention must meet in order to be patentable?

Question 68

Discuss the advantages of incorporation.

Question 69

What kind of protection is provided to the proprietor of a registered design?

Question 70

In what way are co-operatives around the world united?

Question 71

How can a patent improve the profitability of your creation?

Question 72

Identify some common threats to a new firm.

Question 73

What is the difference between a general partnership and a limited partnership?

Question 74

A patent granted in Canada or the United States provides you with protection outside the country for a period of one year from the day on which the patent was granted.

Question 75

What are the benefits of registering your trademark with a government agency?

Question 76

Does a sole proprietorship need to register their business legally?

Question 77

What does a mentor do?

Question 78

What are some important considerations when deciding on a name that grabs people's attention, is easy to remember, has long-lasting appeal, and reinforces your brand?