Q&A Hero

Q: Administrative employees who do not do manual work are exempt from the federal minimum wage requirement.

Q: The first step in the incorporation process is to select a state in which to operate.

Q: Executives who are compensated on a salary basis and engage in management are exempt from overtime pay.

Q: For liability purposes, some courts treat professional corporations somewhat like a partnership.

Q: Overtime pay is given to nonexempt employees who work more than 40 hours per week.

Q: An S corporation is treated the same as a regular corporation for tax purposes

Q: Overtime pay must always be set at twice the regular pay of an employee.

Q: An agreement between shareholders to restrict the transfer of a closely held corporation's stock is illegal.

Q: Living wage laws are minimum wage laws enacted by cities.

Q: A publicly held corporation is a private corporation.

Q: States are allowed to enact minimum wage laws that set minimum wages higher than the federal level.

Q: A corporation is referred to as a domestic corporation by its home state.

Q: A corporation cannot be held liable for the criminal acts of its employees.

Q: An employee who earns tips must be paid minimum wage by the employer, excluding the income from tips.

Q: The U.S. Department of Labor permits employers to pay less than the minimum wage to students and apprentices.

Q: A holding company is a company whose business activity consists of holding shares in another company.

Q: Child actors and performers are exempt from the child labor restrictions of the FLSA.

Q: Corporate profits can be subject to double taxation.

Q: Private civil actions are permitted under the FLSA.

Q: A corporation is a legal entity created and recognized by federal law.

Q: According to the FLSA, children under the age of 14 are forbidden from working, including as newspaper deliverers.

Q: Pence. Queenie, and Randall want to form Sales-to-Infinity, LLC (limited li­ability company). What should they provide in their operating agreement? If they fail to include some important operating details, what determines these details?

Q: The FLSA makes it unlawful to ship goods produced by businesses that use oppressive child labor.

Q: Sally and Tom decide to go into business, selling discounted merchandise through their Web site "e-Buy." They sign a partnership agreement that requires Sally to contribute $12,000 and Tom to contribute $8,000 in capital to start the firm. The agreement also states that only Sally will have the authority to bind the partnership in deals with third parties, but the agreement says nothing about the management of the firm or a division of profits. Without Sally's knowledge, Tom tells United Computer Products, Inc., that he represents the firm and signs a contract with United to buy hard drives for resale on e-Buy. In the first year, e-Buy makes a profit of $50,000. What are the partners' rights with respect to the management of the firm? Is the partnership bound to the contract with United? Do the partners split the first year's profits? If so, how much is each entitled to?

Q: Ewa, the owner of Face-2-Face Enterprises, is a sole proprietor. What are the chief characteristics, advantages, and disadvantages of this form of busi­ness organization? Ewa wants to obtain additional capital to expand Face-2-Face, but she does not want to lose control of the firm. As a sole proprie­tor, what is her best option to attain these goals?

Q: Only private employers, and not governmental bodies, come under the purview of the FLSA.

Q: Helga works as a nurse in a private hospital. She is paid an hourly wage. Helga is typically required to work 40 hours per week, from 10 p.m. until 6 a.m. Monday through Friday. Due to the recent resignation of another nurse, Helga's supervisor has offered her the opportunity to work additional hours each week. Which of the following is true in terms of Helga's prospects for overtime pay? A) Helga cannot receive overtime pay, since federal law conclusively presumes that health care workers are paid on a salaried basis. B) Helga can receive overtime pay only if she works more than 60 hours per week, due to the federal overtime pay restrictions imposed on the health care sector. C) Helga cannot receive overtime pay, as federal law prohibits overtime pay for health care workers. D) Helga is entitled to overtime pay if she works the additional hours.

Q: Owen plans to open Owen's Pets Store, a pet supplies outlet, and to hire Quinn and Ruth. Owen will invest only his own money. He does not ex­pect to make any profit for at least two years and to make almost no profit for the first three years, but he hopes to expand eventually. Which form of business organization would be most appropriate?

Q: Flip is a member of Great States Trucking LLC. Flip's relationship to Great States ends, but the firm continues to do business. This is a. dissociation. b. dissolution. c. winding up. d. wrongful.

Q: Which of the following statements is true of exemptions from minimum wage and overtime pay requirements? A) Apprentices must be paid minimum wage. B) Learned professionals need not be paid minimum wage. C) Workers involved in hazardous activities need not be paid minimum wage. D) Employees in law enforcement and medical sectors need not be paid minimum wage.

Q: Cecilia's Day Spa, LLC, is a member-managed limited liability company. If the law in Cecilia's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to a. capital contributions. b. participation in management. c. the number of members. d. transactions with the firm.

Q: Who among the following is not exempt from the federal minimum wage requirement? A) Kelly, a district sales executive B) Angelica, a waitress C) Tsun, a software engineer D) Orlando, a college professor

Q: If a wage employee works 50 hours one week and 30 hours the next week, for how many hours of overtime pay does the employer owe the employee? A) 0 B) 10 C) 40 D) 80

Q: CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed other­wise, participants in the firm's management will be considered to include a. all members. b. no member. c. one member. d. two members, including at least one general partner.

Q: B2B, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is gov­erned by a. the applicable state LLC statute. b. the federal Uniform LLC Law. c. the principles of partnership law. d. the state corporation statute.

Q: Overtime pay is paid for each hour worked in excess of ________ hours in a week. A) 35 B) 40 C) 45 D) 50

Q: Jay is a member of Kitchen Cookouts, LLC, a limited liability company. Jay is liable for Kappa's debts a. in proportion to the total number of members. b. to the extent of his investment in the firm. c. to the extent that the other members do not pay the debts. d. to the full extent.

Q: Overtime pay is ________ times that of the regular pay of an employee. A) two B) three C) two and a half D) one and a half

Q: Location! Realty LLC is a limited liability company (LLC). Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of a. all states. b. every state in which its members are citizens. c. no state. d. only the state in which it was formed.

Q: Which of the following is true of the minimum wage in the United States? A) A state can enact a law that sets the minimum wage higher than the federal minimum wage. B) A city cannot set a minimum wage higher than the federal minimum wage. C) A living wage law sets a lower minimum wage than the federal minimum wage. D) For a tipped employee, if an employee's tips and direct employer payment do not equal the federal minimum wage, the employer is not required to make up the difference.

Q: Which of the following acts establishes the minimum wage and overtime pay requirements for workers in the United States? A) FLSA B) OSHA C) FMLA D) COBRA

Q: Which of the following is true of the federal minimum wage? A) An employer may not reduce the minimum wage by an amount equal to the reasonable cost of food provided to employees. B) Managerial employees are not subject to minimum wage requirements. C) Apprentices cannot be paid less than the minimum wage. D) Employees who earn tips, such as waiters and waitresses, are not entitled to the minimum wage.

Q: Coco is considering forms of business organization for her concessions businessCoco's Cupcakes. Most states require that a limited liability company have at least a. no minimum number of members. b. at least one member. c. at least two members. d. at least three members, including at least one general partner.

Q: Who among the following are exempt from child labor restrictions in the United States? A) children who work as retail store clerks B) children who work in fast-food restaurants C) children employed as actors and performers D) children employed at gasoline stations

Q: Greta is a member of Hovercraft LLC. As a member, Greta is a. a manager or officer, but not an owner. b. an investor, but not a manager, officer, or owner. c. an owner. d. a participant, but not an investor, manager, officer, or owner.

Q: Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is a. an aggregate of Chad and the other members. b. a natural person in the members' "family." c. a legal entity apart from the owners. d. a non-participating third party.

Q: Which of the following is true of child labor regulations adopted by the U.S. Department of Labor? A) Children between the ages of 14 and 15 may work unlimited hours in nonhazardous jobs. B) Children between the ages of 16 and 17 may work limited hours in hazardous jobs. C) Children under the age of 14 may work limited hours in nonhazardous jobs. D) Children employed in agriculture are exempt from the regulations.

Q: Esteban and Florian want to form a limited liability company (LLC) to manage their business, Gordian Nuts. LLC statutes have been adopted in a. all states. b. no states. c. less than one-fifth of the states. d. only Wyoming and Florida.

Q: According to the U.S. Department of Labor, children under the age of 14 can only be employed as ________. A) dishwashers B) newspaper deliverers C) waiters or waitresses D) retail store clerks

Q: The ________ forbids the use of oppressive child labor and makes it unlawful to ship goods produced by businesses that use oppressive child labor. A) OSHA B) ERISA C) FMLA D) FLSA

Q: Sustainable Café LLC is a limited liability company. Like any other LLC, unless Sustainable Café chooses otherwise, the firm will be taxed as a. a corporation. b. a sole proprietorship. c. a partnership. d. none of the choices.

Q: The FLSA applies to ________. A) state government employees B) federal government employees C) employees engaged in the production of goods for interstate commerce D) self-employed U.S. citizens

Q: Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid by a. all of the partners in proportion to their capital contributions. b. all of the partners in proportion to their shares of the profits. c. Kelly because she contributed most of the capital. d. Lars and Mona because they contributed the least of the capital.

Q: The ________ Act contains a general duty standard that imposes on an employer a duty to provide employment and a work environment that is free from recognized hazards that are causing or are likely to cause death or serious physical harm to its employees.

Q: Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge. Under their partnership agreement, Jerry-Bilt is to dissolve when the bridge is built. Iggy signs a contract for the firm to build a second bridge. Jerry-Bilt a. dissolves as soon as the first bridge is built. b. dissolves as soon as the second bridge is built. c. dissolves immediately on Iggy's signing of the second contract. d. does not dissolve.

Q: Clu, Dolf, and Elton do business as Fertile Valley Farm. Clu's relationship to the firm ends, but it continues to do business. This is a. dissociation. b. dissolution. c. winding up. d. wrongful.

Q: OSHA standards establish safety requirements for safety guards on saws. This is an example of a(n) ________ standard.

Q: Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is a. not liable for the debt. b. only liable for the debt up to the amount of her capital contribution. c. personally liable only to the extent the other partners do not pay. d. personally liable to the full extent of the debt.

Q: The ________ is a federal agency that is empowered to inspect places of employment for health hazards and safety violations.

Q: Luann and Mace are partners in Networx, a computer peripherals firm. Mace dissociates from Networx. Luann signs a con­tract with Physik Drives, a wholesale component supplier, apparently on Networx's behalf. Physik does not know of Mace's dissociation. The contract is binding on a. Luann, Mace, and Networx. b. Luann only. c. Networx only. d. Physik only.

Q: The OSHA serves only as a model act and employers who violate its rules are not liable for penalties.

Q: The general duty standard requires an employer to provide a work environment that does not result in its employees' mental stress.

Q: Luann and Mace are partners in Networx, a computer peripherals firm. Luann signs a contract with Oleo Chips, a retail component supplier, apparently on Networx's behalf. The contract is binding on a. Luann, Mace, and Networx. b. Luann only. c. Networx only. d. Oleo only.

Q: Corbin, a partner in Doctors Medical Clinic, applies for a loan with Evermore Bank allegedly on Doctors' behalf but without the authorization of the other partners. Evermore knows that Corbin is not authorized to take out the loan. Corbin defaults on the loan. Liability for its unpaid amount is imposed on a. Corbin and Doctors, jointly. b. Corbin only. c. Doctors only. d. Evermore only.

Q: The Occupational Safety and Health Administration (OSHA) is a federal administrative agency within the Department of Labor that is empowered to enforce the Occupational Safety and Health Act.

Q: Which of the following is true of OSHA's general duty standard? A) The standard must be established with each safety regulation. B) It requires an employer to provide a work environment that does not result in employee mental stress. C) An employer is required to provide a work environment that is free from recognized hazards. D) OSHA has no authority regarding employer safety violations, since it is merely a model act.

Q: Megan and Nicole do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Company, Megan fails to account for the profit. To her firm, Megan is a. liable for breach of the duty of care. b. liable for breach of the duty of economic sense. c. liable for breach of the duty of loyalty. d. not liable.

Q: Rona and Savannah do business as Treasure Island Traders. In acting on the firm's behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in overestimating the profit. To her firm, Rona is a. liable for breach of the duty of care. b. liable for breach of the duty of economic sense. c. liable for breach of the duty of loyalty. d. not liable.

Q: The ________ is an OSHA standard that requires an employer to provide a work environment free from recognized hazards that are causing or are likely to cause death or serious physical harm to employees. A) general duty standard B) specific duty standard C) code of wellness D) nonhazardous work environment imprimatur

Q: The OSHA guidelines that set safety rules for specific equipment, procedures, types of work, and unique work conditions are known as ________. A) standards of wellness B) specific duty standards C) the code of direction D) general standards of work

Q: Sable and Rex agree while talking on the phone to form a partner­ship to deal in transfers of real property. Their partnership agreement is legally binding a. only if a copy of the agreement is filed in the appropriate state office. b. only if the agreement is reduced to writing. c. only if the parties exchange valid consideration. d. without more.

Q: The ________ is federal act enacted in 1970 that promotes safety in the workplace. A) OSHA B) FLSA C) FMLA D) ERISA

Q: Noah and Orin do business as Pest Control Partners. In most states, for the purposes of suing and being sued, Pest Control Partners would be treated as a. an aggregate of the individual partners. b. a natural person. c. an entity. d. a non-existent party.

Q: Desi starts up eSites, an Internet service, and leases office space in a building owned by Fred. The lease requires Desi to pay Fred a base rental of $1,250, plus 10 percent of eSites' profits, each month. The term is two years. Desi hires Gwen to work at eSites' tech support desk at an hourly wage of $12.50, plus a commis­sion of 10 percent of the prof­its. The term is also two years. . Desi and Gwen are a. not partners, because Gwen does not have an ownership interest or manage­ment rights in eSites. b. not partners, because the pay includes an hourly wage. c. not partners, because the pay includes only 10 percent of the profits. d. partners in a partnership for two years.

Q: "Workers' compensation is an exclusive remedy." Elaborate on this statement with an example.

Q: Desi starts up eSites, an Internet service, and leases office space in a building owned by Fred. The lease requires Desi to pay Fred a base rental of $1,250, plus 10 percent of eSites' profits, each month. The term is two years. Desi hires Gwen to work at eSites' tech support desk at an hourly wage of $12.50, plus a commis­sion of 10 percent of the prof­its. The term is also two years. Desi and Fred are a. not partners, because Fred does not have an ownership interest or manage­ment rights in eSites. b. not partners, because the lease includes a "base rental." c. not partners, because the rent includes only 10 percent of the profits. d. partners in a partnership for two years.

Q: Workers' compensation is a(n) ________ remedy, which means that workers cannot receive workers' compensation and also sue their employers in court for damages.

Q: Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed by the Uniform Partnership Act a. in the absence of an express agreement. b. in the absence of an implied agreement. c. only in the presence of an express agreement. d. under all circumstances.

Q: If an employer intentionally injures a worker, the worker cannot collect workers' compensation benefits.

Q: Jody owns KuppaJava Kiosks, a sole proprietorship. Jody's liability is a. limited by state statute and varies from state to state. b. limited to the extent of capital expenditures. c. limited to the extent of his or her original investment. d. unlimited.