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Ace Personal Training Certification > Chapter 17 and 18: Legal and business strategies > Flashcards

Chapter 17 and 18: Legal and business strategies Flashcards

1
Q

What is a sole Proprietorship?

A

Business is owned and operated by one person

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2
Q

What are the benefits of sole proprietorship?

A

Extensive meetings for strategy not necessary
No formal paper work
Flow through taxatiojn

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3
Q

What are disadvantage to sole proprietorship?

A

Financial loss and liabilities are sole responsibility of the owner. No corporate veil
Difficult to raise capital
Business cannot function without owner

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4
Q

What is a Partnership?

A

Two or more people that agree to operate a business and share profits and losses
Should have legal documents, not required.

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5
Q

What is a general partnership?

A

joining of 2 or more individuals to own and operate a business.
Can be divided equally or unequally.

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6
Q

What is the difference between an expressed and implied partnership?

A

Expressed- created with contract between parties

Implied- created and recognized by courts if individuals act as parters.

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7
Q

What is disadvantage of partnership especially for minority owner?

A

still personally liable for company losses

Minority partners can be presonally liable for greater share then what they ownj

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8
Q

what is a limited partnership vs a general partner?

A

Limited only liable for your direct financial contribution. But limited partner have no formal managerial input
General partner retain personal liability.

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9
Q

What is an advantage to partnergip?

A

Flow through taxation

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10
Q

what is a corporation>

A

Create a separate Entity from the investors and operators of the business.

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11
Q

What is the benefit of a corporation?

A

Protects investors from personal liability

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12
Q

What is the disadvantage of a corporation?

A

much more burdensome than a sole proprietorship, formed in the secretary of state
Name cannot already be used.

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13
Q

What is a subchapter S corporation?

A

Profits flow through the business to the shareholders and are taxed as ordinary income.
Are shielded from corporate liability beyond their investment.
Must be based in the US and can have total of 100 investors, and can only issue one form of stock
Lots of paperwork

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14
Q

What are most common used by Personal trainers?

A

Sole Proprietorship and partnership

Then S Corp

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15
Q

What are limited liabilities and partnerships?

A

Profits flow through investors that are taxed as ordinary income.
Corporate veil for personal liability.
Simpler paperwork
No national standards, can be different state to state and rules may be decided through courts

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16
Q

What are C corporations?

A

Largest companies in the world.
Can seek investors and conduct business around the world.
Annually file extensive paperwork
Double taxed, because company is taxed, then profits go to shareholders and they pay taxes.

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17
Q

Advantage and disadvantage of Sole proprietorhsip?

A

Adv- easily created and managed, flow through taxation

Disadv- Personal liab, raising capital

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18
Q

Advantage and disadvantage of Partnership?

A

Adv: easily created, flow through taxation

Disadv- managment disputes, Personal liability except limited Liability partner

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19
Q

Advantage and disadvantage of S- Corp

A

Adv- flow through taxation, Limited Liability

Disadv- Limited # of investors, cost of formation and operation

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20
Q

Advantage and disadvantage of LLC/LLP

A

adv- Flow through taxation, limited liab

Disadv- undefined operating standards in states

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21
Q

Advantage and disadvantage of C Corp

A

Adv- Limited Liability, Unlimited investors

Disadv- cost of formation and operation, double taxation

22
Q

What are advantage to Franchise?

A
  • operating the rights to an established brand
  • access to business and operating systems and national advertising
  • ability to control business
  • Franchisers will provide training
23
Q

What are the disadvantages to a Franchise?

A
  • upfront costs and ongoing costs to maintain. annual costs of maintaining the franchise
  • the association with a particular brand
  • Have to agree to follow the franchise operating model.
24
Q

What are characteristics of an employee?

A

Employee regularly works for their employers.
Employees are trained
Employers withhold taxes
Pay for unemployment and workers comp

25
Q

What are characteristics of an independent contractor?

A

Negotiate the job and final compensation. then once the work is paid they get their money and move on.

26
Q

What should be signed with the initial contract?

A

a Waiver

27
Q

What are the elements necessary to create a binding agreement?

A
  • offer and acceptance with mutual agreement of terms
  • Consideration, ex money
  • Legality
  • ability for both parties to partake in it in regards to legal age and mentality.
28
Q

What are the 4 elements for a plaintiff to establish negligence?

A
    1. The dependent had a duty to protect the plaintiff
      1. The defendant failed to uphold the standard of care
      2. Damage or injury to the plaintiff occurred
      3. The damage or injury was caused by defendants breach of duty
29
Q

What is vicarious liability?

A

Employers are responsible for the actions of their employees`

30
Q

Waivers do not protect the trainer from what?

A

Gross negligence- action that demonstrates reckless or willfull behavior.

31
Q

What is contributory negligence?

A

Prevents a plaintiff in a lawsuit that played a part in the injury from receiving reimbursement.

32
Q

What is comparative negligence

A

Most states don’t use.

If multiple parties caused injuries the court will apportion guilt and award for damages. `

33
Q

What is an agreement to participate?

A 
usually incorporated into other documents. 
Designed to protect trainer from client claiming to be unaware of the risks of physical activity. 
Typically used for class settings.
34
Q

What is informed consent?

A

Demonstrates that a client acknowledges that they have been informed about the risks associated. It is used to show the potential benefits and dangers.

35
Q

What are inherent risks?

A

Even if everything is done properly there are still risks for something,

36
Q

What are the legal responsibilities of the Trainer>

A
  • check the facilities
  • the equipment, AED, CPR,
  • supervision
  • instruction
37
Q

ACE recommends how much insurance coverage?

A

At least 1 million dollars as coverage

38
Q

What is Keyman insurance?

A

Compensate the business for the loss of a person.

39
Q

What are the 5 steps of risk management?

A
  1. risk identification
  2. Risk evaluation
  3. Selection of approach for management risk
  4. Implementation
  5. Evaluation
40
Q

What are the 4 approaches to management risk?

A
  • Avoidance: Remove the possibility of danger or injury.
  • Transfer: move the risk to others through waivers
  • Reduction: Modifying the risks by removing part of the activity
  • Retention: Retain certain risks
41
Q

What should you do for a low or insignificant risk?
What about or a High risk and high Occurrence?
What about High Risk low occurrence?

A

Retain it.
Avoid
Transfer it

42
Q

what is the direct employee model?

A

a Trainer is paid one rate when working on scheduled shift and another when working as a trainer.

43
Q

What is the independent contractor model?

A

Trainer contracts his services to a health club or training studio.
Trainer pays a fee to rent the space
Trainer gets to decide how much they want to charge.

44
Q

What are the components of a business plan?

A
  • Executive Summary
  • Business Description
  • Marketing Plan
  • Operational Plan
  • Risk analysis
  • Decision making criteria
45
Q

What are the parts of an executive summary>

A
  • business concept
  • Financial info
  • Current business position
  • Major achievments
46
Q

What is in the business description?

A
  • Identify operating model
  • describe industry specific to local market
  • List members of the management team
47
Q

What are the categories for risk analysis?

A
  • Barriers to entry
  • Competitive
  • Staffing
48
Q

What is in a SWOT analysis?

A

Strength
Weakness
Opportunity
Threat

49
Q

When training in a clients home what sort of music can you use?

A

Clients must provide their own music

50
Q

`What is flow through taxation?

A

In sole proprietorships and partnerships, profits are taxed at lower personal rates rather than higher corporate rates. In addition, yearly losses can flow-through to be used by the owner to offset profits from other income.

51
Q

How are most buying decisions that are service related driven?

A

Emotionally

Ace Personal Training Certification (22 decks)

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