Deck 13: Legal and Tax Issues, Including Intellectual Property

Question 1

Some lawyers in Canada concentrate on representing start-ups and small businesses.

Answer 1

True

Question 2

No good lawyer will be willing to make fee arrangements to ease the strain on start-up's cash flow.

Answer 2

False

Question 3

Double taxation is more of a myth than a legitimate threat to small businesses.

Answer 3

True

Question 4

A partnership legal form of business is limited to two owners.

Question 5

A start-up can be considered a non-profit entity if it does not make a profit

Question 6

It is not unusual for a founder to forgo salary compensation even when external investors are brought in

Question 7

A founder may use an employment agreement to prevent themselves from being removed from the company without cause.

Question 8

Laws regulating the offer and sale of securities are only applicable to large public companies in Canada.

Question 9

Laws regulating the offer and sales of securities are not applicable to equity shares.

Question 10

A specialist certification from the Law Society of Upper Canada is required in order to provide advice to aspiring Canadian entrepreneurs.

Question 11

Restrictive covenants limits an individual's ability to start or work with a competitor, even if they resign from their current employment position.

Question 12

Courts will never adapt the length or scope of a non-competition agreement.

Question 13

Only once a company successfully patents an invention, is it allowed to make money on that invention.

Question 14

Patents are pretty much only applicable in high-technology new ventures

Question 15

Provincial and municipal government bodies in Canada are not subject to the action for breach of confidence where they are required to comply with legislated rights of access to information

Question 16

Once a company files for a patent, they must see it through to issue.

Question 17

Canadian inventors are free to apply for patents in other countries.

Question 18

Generally, public disclosure of a product or process does not invalidate it from being patented

Question 19

Once a patent is filed it provides immediate protection.

Question 20

Founders normally are issued shares (or equity) based on the size of their financial investment

Question 21

The owners' respective investments in a company will normally be memorialized in a non-disclosure agreement.

Question 22

Redemption provisions provide minority investors the ability to demand a buy out so that they are not locked into a minority investment in a closely held company forever

Question 23

If the employer is ending the relationship, absent 'just cause' for the termination, the employer must give the employee reasonable notice of the termination

Question 24

The name of a business is likely to be the repository of much of its goodwill

Question 25

The choice of a name is a matter of personal and artistic taste, without many legal ramifications

Question 26

An entrepreneur is free to name a company whatever he/she wishes

Question 27

The doctrine of vicarious liability states that:

A) The employer's liability for the employee's actions is limited to a specific amount of money (the amount differs from state to state)
B) The employer is responsible for any contract signed by the employee.
C) The employer is responsible for actions of the employee occurring within the scope of his/her employment
D) The employee always answers for the consequences of his/her criminal actions without transferring the responsibility to the employer
E) Employees can be held criminally liable if they contribute to the unlawful actions of an employer and should have reasonably understood the consequences.

Question 28

A redemption agreement means that

A) The business owns insurance policies on the owners and is obligated to use the proceeds to purchase each stockholder's equity upon his or her death.
B) Each owner is required to take out insurance on the others and to buy a proportional amount of the deceased's equity.
C) Business assets, such as inventory or marketable securities, equal to the value of owner's share of the equity in the company will be transferred to relatives upon his or her death.
D) Internal Revenue Service allows installment tax payments to be received within 2 years after an owner's death.
E) None of the above.

Question 29

Securities refer to all of the following except:

A) Equity shares
B) Options or Warrants
C) Short-term loans
D) Investments relying on the efforts of others for the investment's success

Question 30

Discrimination is prohibited in

A) Hiring
B) Promotion
C) Firing
D) All of the Above

Question 31

Non-competition agreements vary in terms of each of the following dimensions except:

A) Scope of the obligation
B) Duration of time from employment termination
C) Duration of competition allowed
D) Geographic scope

Question 32

The following are examples of intellectual property except:

A) Accounts Receivable
B) Inventions
C) Dramatic Works
D) Symbols used in commerce

Question 33

The following are legal ways in which intellectual property can be protected in Canada except:

A) Confidential information
B) Patents
C) Industrial Designs
D) Injunction

Question 34

Confidential information protects what about a product?

A) Its assembly and marketing strategy.
B) Symbols affixed to it
C) Instructions for its use
D) Its packaging and advertising materials

Question 35

Which form of intellectual property does not rely on government statues or certification, but rather the decision of courts:

A) Confidential information
B) Patents
C) Trademarks
D) Industrial Designs

Question 36

Which form of intellectual property does not have a time limit?

A) Patents
B) Copyright
C) Industrial Designs
D) Confidential Information

Question 37

Which of the following provinces is a civil law jurisdiction and includes the explicit protection of trade secrets in its civil code?

A) Ontario
B) Quebec
C) British Columbia
D) Newfoundland

Question 38

The Coca-Cola formula is one of the most famous examples of a:

A) Patent
B) Trade Secret
C) Trademark
D) Confidentiality Agreement

Question 39

Patents in Canada are governed by:

A) The court system
B) Provincial governments
C) The federal government
D) Civil Code

Question 40

In order to gain patent protection for its invention across the world, a company must:

A) File for an international patent
B) File for a patent only in its home country
C) Coordinate patent applications across countries
D) It is not possible to get patent protection outside of your home country

Question 41

Under Canadian law, the legal status for the time between a patent application and its granting is referred to as:

A) Patent Pending
B) Provisional Patent
C) Probationary Patent
D) There is no legal status during this time period

Question 42

Which of the following cannot be patented under Canadian law?

A) Methods of Medical Treatment
B) Pharmaceuticals
C) Medical Instruments
D) Ways to diagnose injuries

Question 43

Trademarks can be created based on all of the following except:

A) A word
B) A symbol
C) Shape of the goods
D) A functional feature of a product

Question 44

How many years is monopoly protection for an industrial design good for (without renewal)?

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

Question 45

Which of the following forms of IP protection have a filing fee?

A) Confidential Information
B) Passing off Trademark
C) Patent
D) None of the above

Question 46

Which of the following forms of IP protection is the most expensive?

A) Patent
B) Passing off trademark
C) Registered trademark
D) Copyright

Question 47

Passing off is a type of:

A) Trademark
B) Patent
C) Partnership
D) Industrial Design

Question 48

Each of the following requires a government review except:

A) Patent
B) Industrial Design
C) Registered Trademark
D) Passing off Trademark

Question 49

A company is controlled by the following levels of authority except:

A) Shareholders
B) Directors
C) Officers
D) Employees

Question 50

Name the forms of IP protection under Canadian Law and describe what subject matter is able to protect?

Question 51

What are four steps that a company can take to help protect confidential information, including trade secrets:

Question 52

Describe how a certification mark is different from a trademark and how it may be helpful to an entrepreneur.

Question 53

Compare the cost and length of protection between confidential information, patent, trademark and copyright.

Question 54

Discuss the pros and cons of protecting intellectual property through confidential information:

Question 55

Describe the ideal business entity from the perspective of taxation: