Ch. 16 Legal Guidelines and Business Considerations

Question 1

What are the pros and cons of sole proprietorships

Answer 1

pros - easy to set up cons: financial burden all on owner, harder to raise capital, risk of lawsuits

Question 2

The ability to use losses to offset profits from other income is referred to as

Answer 2

flow through taxation

Question 3

A corporation where the profits flow through the business to the shareholders and are taxed as ordinary income

Answer 3

A sub chapter S corporation

Question 4

Operates very similar to a subchapter S but with less regulations and more simple paperwork to set up

Answer 4

A limited liability company

Question 5

Allows the company to seek investors and conduct business activities around the world; double taxation, unlikely for PTs

Answer 5

C corporations

Question 6

What is the statute of frauds?

Answer 6

Requires a written agreement if agreement is to be valid

Question 7

What are the elements needed to prove negligence?

Answer 7

1. Defendant had a duty to protect plaintiff from injury
2. Defendant failed to uphold the standard of care necessary to perform that duty
3. Damage or injury to the plaintiff occurred
4. The damage or injury was caused by defendant’s breach of duty (proximate causation)

Question 8

What is contributory negligence?

Answer 8

When a PT fails to act and a client is injured but is determined to have caused part of the incident themselves, so the court apportions blame to each party involved.

Question 9

A _____ insurance rider might be necessary for PTs to train in outdoor settings or clients homes

Answer 9

specific