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Legal Environment of Business Chapter 16 Small Businesses and Franchise Flashcards | StudBud
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Legal Environment of Business Chapter 16 Small Businesses and Franchise
Legal Environment of Business Chapter 16 Small Businesses and Franchise
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#business entities #small businessess
Flashcards
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Questions
43
Answers
1
Franchisors mandate retail prices for good that a franchisee sells.
False
True
2
A manufacturing franchise
typically fails in the first year
involves the transfer of a formula to make a product
is illegal
involves the ownership of the business
3
A partner has a duty to devote time and energy to the ptsp and will be compensated by ptsp
False
True
4
State deceptive trade practices acts do not apply to actions by franchisors.
True
False
5
The UPA applies to written partnership agreements if a dispute arises that's not covered in ptsp agmt .
False
True
6
A partner can always dissociate. Dissociation can be wrongul, though.
True
False
7
Generally, franchisees must be given an opportunity to cure a breach of the franchise agreement
False
True
8
Most states allow termination of a franchise when there is no good cause for it.
False
True
9
Franchise agreements may not require franchisees to purchase the premises for business outright
False
True
10
In a general partnership, if the partnership dissolves
the partnership's legal existence is terminated.
The partnership continues
11
In ordinary course of business one partner in general ptsp can subject o/partners to liability
False
True
12
Withdrawal from a ptsp before the express terms of the ptsp agreement allow it, constitutes a breach of the ptsp agmt.
false
True
13
Acts of a general partner in the ordinary course of business subject o/ partners to liability
False
True
14
Partners owe each other a duty of loyalty. This is also known as a
protected right
Fiduciary Duty
liberty
dissociation
15
Most franchise agreements limit the ability of a franchisee to sell the franchise.
False
True
16
If partners don't have a written partnership agreement, the partners will share partnership profits equally.
False
True
17
If Edmund operates a business where he collects all profits for himself he is most likely
none of the choices
a sole prorietorship
crazy
a partner
18
In a general partnership, the senior manager manages the partnership.
False
True
19
On winding up a partnership (dissolution) creditors are paid before partners receive anything
True
False
20
The federal government regulates franchising in part
through the Franchise Rule
through state courts
through CSCC
through administrave agencies
21
The Franchise Rule allows franchisees
to dance
to cure a breach within a certain time to avoid termination
to franchise
to be the first to receive the remaining assets on breach
22
Partners who devote their skills and time to the ptsp are entitled to compensation.
True
False
23
If a member dissociates in an LLC with 5 members,
the business files bankruptcy
the business cannot continue
the remaining members decide whether to continue or not.
the remaining partners have no options
24
Franchises are governed by state law
False
True - contract law and UCC
25
If no fixed duration of the ptsp is specified in the ptsp agreement it's ptsp at will.
True
False
26
One essential element of a partnership is an equal right to be involved in the management of the business.
False
True
27
Franchise agreements cannot limit a franchisee's ability to sell the franchise.
False
True
28
The laws governing franchising are primarily designed
to proect franchisors from franchisees
to protect franchisees from franchisors
29
For 2 years after a partner dissociates, the ptsp can be bound by acts of dissociated partner
True
False
30
A franchisor sells Pay & Go to Uluc. Uluc's franchise agmt allows the franchisor to control
the location of the business
quality of the operation of the business
all of the above
the organizational structure of the business
31
McDonalds is an example of a distributorship franchise
True
False
32
In a manufacturing agreement franchise, the franchisor gives the franchisee a formula to
make a product, like for coca-cola
use as they please
to distribute to other franchises
none of these choices
33
Partnerships have the greatest organizational flexibility
True
False
34
The laws governing franchises were written to protect the franchisor.
True
False
35
Sole proprietors have unlimited liability for obligations that arise in doing business.
False
True
36
Bobbie operates a strip club as a sole proprietor. Bobbie sells the club to Zach.
This is a good deal for Jake.
This is illegal
Bobbie cannot sell a sole proprietorship
Bobbie transferred ownership of the strip club to jake.
37
The Federal government regulates franchises through
all of the above
interstate commerce
The Franchise Rule and through laws that apply to specific industries
appointment of federal judges
38
Franchisors can be held liable for tortious acts of a franchisee's employees if
if franchisee filed bankruptcy
franchisor is involved in daily operations of the franchisee
if franchisee didn't sign franchise agreement
if the franchisor did not secure a release from liability.
39
All new businesses must
None of these choices
Comply with state licensing requirements
Answers A & B are correct
Comply with state business registration requirements
40
With respect to taxes, partnerships are
pass through entities
are targeted by the IRS
not required to file taxes
are taxed at a higher rate than individuals
41
Melia and Key decide to end their partnership relationship. This results in
dissociation and the death of the partnership
The continuation of the partnership
the temporary suspension of the ptsp
Nothing with regard to the partnership's existence
42
In a general partnership,
partners can subject other partners to liability
there must be a written agreement
partners cannot subject other partners to liability
Isis must sign all checks
43
Isaac, Mario and Aaron are in a ptsp. Aaron leaves, but the ptsp continues. This is
unethical
dissolution
illegal
dissociation
