Business Law Section 2.1 Flashcards
How many deaths are attributed to alcohol each year?
About 50 deaths per year
What is an example of a company that does have to tell the truth about their products?
Pharmaceutical Companies
How much arsenic is there in drinking water?
40 parts per million
What does the moving of softwood production to Canada tell us about regulations?
Regulations can have unintended consequences.
What was the major cause of the housing collapse?
Sub Prime Loans
What was the cause of so many sub prime loans being handed out?
Regulation on banks, making them have to give out loans so they don’t discriminate.
What is a Sub Prime Loan?
A loan that is greater then then can be repaid.
How much profit does Exxon make on the dollar?
8 cents
What are retained earnings?
Earnings that the company uses to further its business
Who has the highest corporate tax rate and what is the percent?
The U.S. at 35%
What are dividends and what is there tax rate?
Dividends are earnings that are paid out to the stock holders and they are taxed at 15%
What is chapter 11 bankruptcy?
The company establishes a plan for the repayment of debts
What is chapter 7 bankruptcy?
The companies assets are completely liquidated and the proceeds are distributed to the creditors.
What happens to a corporation if one of the proprietors dies?
Nothing, unlike a partnership which is dissolved if one of the partners dies, a corporation can continue on indefinitely.
What are the details pertaining to the employee theft case in Dixon Illinois?
$50+ million dollars stolen from a city of about 2000
If an accounting firm is held liable, what insurance can prefect them?
Errors and Omissions
How can you protect your business from an employee who steals?
Buy theft insurance or require workers to be bonded by a surety company
What is the downside to theft insurance?
Its pricey
What happens when an employee is bonded by a surety company?
A fidelity bond is established to protect your business against theft.
What is the downside to an employee being bonded?
They are only bonded based on the assets that they have.
How does the supreme court view corporations? And what right does this give them?
Corporations are seen as associations of people – basically a person – and they therefore have the right to free speech.
What does the liberal left want to do to corporations in regards to politics?
They want to ban business involvement in politics and create campaign finance laws
How are state laws handled when they differ from federal laws?
Federal law always trumps state laws.
How does marijuana legalization show how state and federal laws are handled?
While marijuana may be legal in some states, it is still federal illegal and therefore people who buy/sell marijuana may be federally prosecuted.
