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Business Law 210 > Exam 2 > Flashcards

Exam 2 Flashcards

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1
Q

what is a patent?

A

statutory grant from the federal government giving the inventor of a novel, genuine, not obvious product the exclusive rights to make, use and sell an invention

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2
Q

How long does a utility patent last?

A

20 years from the date of application

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3
Q

How long does a design patent (the way something looks) last?

A

14 years

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4
Q

What is a provisional patent application? Why is this sometimes a better option than a regular patent?

A

something you can file to protect your idea for one year. This is better because if you have a patent for 20 years you cannot sell it until those 20 years are over.

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5
Q

What is a trade secret? How long do they last?

A

information is considered a trade secret if the business would lose its competitive advantage if known by its competitor. They last 20 years.

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6
Q

What is an assignment agreement?

A

to sell your intellectual property

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7
Q

What is a license agreement?

A

to keep your intellectual property but permit others to use it on your terms in exchange for money. This can be very lucrative.

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8
Q

What is a copyright?

A

Copyrights protect “original works of authorship.”
The work must be original, creative, and fixed in a tangible form.
Only the expression of the idea can be protected by copyright, not the idea itself.

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9
Q

What is copyright protection?

A

Copyright protection means that you have the exclusive right to 1) reproduce, 2) publish, 3) display, 4) perform, or 5) prepare derivatives of your work.

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10
Q

How long does copyright protection last?

A

Protection lasts for the life of the author, plus seventy (70) years.

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11
Q

What is copyright infringement?

A

occurs when someone copies your work without your permission whether or not they do it for commercial purposes, intentionally or unintentionally.

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12
Q

What are the four fair reasons for copyright infringement?

A
  1. Educational
  2. News reporting
  3. Criticism
  4. Parody
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13
Q

What is a trademark or servicemark?

A

A word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods or services of one party from those of others.

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14
Q

What are the four classifications of trademarks?

A
  1. Arbitrary ad Fanciful: Made up names completely unassociated with the product or service
  2. Suggestive: A name that suggests without describing the product
  3. Descriptive: Not usually granted unless proven to have a strong public identification.
  4. Generic: Names that have lost protection as company has failed to enforce ownership
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15
Q

What is infringement?

A

occurs when someone uses a trademark or a confusingly similar mark for his or her own use, of which the original mark owner has to prove potential harm.

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16
Q

What is dilution?

A

a remedy for the owners of famous marks to protect against those using the mark in a way that would be harmful to the brand.

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17
Q

What are the five types of business entities?

A 
sole proprietorship 
General partnerships 
limited partnerships 
corporations 
limited liability companies
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18
Q

What is a sole proprietorship?

A

The simplest form of business organization. It exists when someones decides to start their own business. The profits and loses from the business can be filed on the persons personal tax returns. The main disadvantage is that the person is personally liable for the businesses debts and liabilities.

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19
Q

What is a general partnership?

A

a general partnership is formed when two or more people form a business for profit together. No written agreement is required and taxes are filed on personal tax returns. All partners are personally liable for debts in the partnership.

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20
Q

What is a limited partnership?

A

Limited partnership agreements are required to be in writing. The main advantage is that non-managing partners can be labelled as limited partners and have no liability for partnership debts beyond their own investment Limited partnerships must have one limited partner and one general partner.

21
Q

What is a corporation?

A

Corporations are formed by individuals or groups filing articles of incorporation with the secretary of state. Corporations double taxed- they are taxed and so are their shareholders (on their dividends). Corporations are owned by the shareholders.

22
Q

What is a limited liability company?

A

LLC’s are owned by members instead of shareholders. To form an LLC, individuals or groups file an articles of organization with the secretary of state. The main advantages include the limited liability protection and pass through taxation. LLC’s are automatically dissolved upon the expiation of the period indicated in the articles of organization, by agreement, by the statute.

23
Q

What is pass through taxation?

A

Taxes are only paid once instead of twice like in a corporation.

24
Q

What is the Crabbe vs US case?

A

There were two partners. One in charges of sales and one in charge of bookkeeping. Bookkeeper failed to book payroll taxes (federal offense). Sales guy didnt know that the bookkeeper not filing yet he still got sent to jail because he was in a general partnership.

25
Q

What are corporation codes?

A

State statues that regulate the formation, operation, and dissolution of corporations.

26
Q

What are the characteristics of a corporation?

A
  • Free transferability of shares
  • Perpetual existence (as long as the forms continue to be filled out, your corporation will continue to be in existence)
  • Centralized management
  • Limited liability of shareholders
27
Q

What is a publicly held corporation?

A

Many shareholders-securities are usually traded on national stock exchanges

28
Q

What is a closely held corporation?

A

A corporation owned by one or a few shareholders

29
Q

What is a domestic corporation?

A

a corporation doing business in the state in which it was formed

30
Q

What is a alien corporation?

A

A corporation doing business in a state in which it was not formed

31
Q

What is a foreign corporation?

A

A corporation formed in another country

32
Q

What are the articles of incorporation?

A

The basic governing documents of a corporation, which must be filed with the secretary of state of the state of incorporation

33
Q

What is a registered agent?

A

a person or corporation that is empowered to accept service of process on behalf of the corporation

34
Q

What are corporate bylaws?

A

a detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation

35
Q

What is an S corporation?

A

A corporation that has met certain requirements and has elected to be taxed as an S corporation for federal income tax purposes

  • pay no federal income tax at the corporate level
  • income or loss flows to the shareholders and must be reported on the shareholders individual income tax returns
36
Q

What are equity securities?

A

representation of ownership rights in a corporation (shares of stock). Equity securities can be common stock or preferred stock

37
Q

What kind of preferences, rights or attributes do preferred stock holders have?

A 
\+++Dividend preference+++
Liquidation preference
Cumulative dividend right
Right to participate in profits
Conversion right
Redeemable preferred stock
38
Q

What are authorized shares?

A

The number of shares provided for in a corporations articles of incorporation

39
Q

What are issued shares?

A

authorized shares that have been sold by a corporation

40
Q

What is the annual shareholder meeting?

A

a meeting of the shareholders of a corporation that must be held by the corporation to elect directors and to vote on other matters

  • annual
  • special
  • proxy
41
Q

Define Quorum

A

the number of directors necessary to hold a board meeting o transact business of the board

42
Q

What is the supermajority voting requirement?

A

a requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders

43
Q

What is a dividend?

A

a distribution of profits of the corporation to shareholders

44
Q

What is piercing the corporate veil?

A

a doctrine that says if a shareholder dominates a corporation and uses it for improper purposes, a court of equity can disregard the corporate entity and hold the shareholder personally liable for the corporations debts and obligations

45
Q

What is the board of directors?

A

a panel of persons who are elected by shareholders to make policy decisions concerning the operation of a corporation

46
Q

What are the duties owed by the directors and officers to their corporation and its shareholders?

A

Duty of loyalty: A duty that directors and officers have to act non-adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders

Duty of care: A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation

47
Q

What is the Sarbanes-Oxley Act?

A

A federal statute enacted by Congress to improve corporate governance

The goals of the Sarbanes-Oxley Act:

  • Improve corporate governance rules
  • Eliminate conflicts of interest
  • Instill confidence in investors and the public that management will run public companies in the best interests of all constituents
48
Q

What are multinational corporations?

A

multinational corporations operate in more than one country.

Business Law 210 (4 decks)

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