CBA Business Law & Compliance 1 — Questions and Answers
Question 1: Which type of business entity provides its owners with limited liability protection while allowing profits to pass directly to owners' personal tax returns?
- C Corporation
- Sole Proprietorship
- Limited Liability Company (LLC) (Correct answer)
- General Partnership
Correct answer: Limited Liability Company (LLC)
An LLC combines limited liability protection with pass-through taxation, avoiding the double taxation of a C Corporation.
Question 2: Under the Americans with Disabilities Act (ADA), which of the following is a requirement for employers with 15 or more employees?
- Provide unlimited medical leave for all disabilities
- Make reasonable accommodations for qualified individuals with disabilities (Correct answer)
- Hire a fixed percentage of disabled workers
- Exempt disabled employees from performance standards
Correct answer: Make reasonable accommodations for qualified individuals with disabilities
The ADA requires covered employers to provide reasonable accommodations to qualified individuals with disabilities unless it causes undue hardship.
Question 3: A contract is considered legally binding when it contains which of the following essential elements?
- Offer, acceptance, and consideration (Correct answer)
- Written agreement, notarization, and witnesses
- Offer, payment, and delivery
- Mutual benefit, written terms, and signatures
Correct answer: Offer, acceptance, and consideration
A valid contract requires an offer, acceptance of that offer, and consideration (something of value exchanged by both parties).
Question 4: What is the primary purpose of the Sarbanes-Oxley Act (SOX)?
- Regulate international trade agreements
- Protect investors by improving corporate financial disclosures and preventing fraud (Correct answer)
- Set minimum wage requirements for federal contractors
- Establish environmental reporting standards for public companies
Correct answer: Protect investors by improving corporate financial disclosures and preventing fraud
SOX was enacted to protect investors by enhancing the accuracy of corporate financial disclosures and imposing strict penalties for accounting fraud.
Question 5: Which federal agency is responsible for enforcing workplace safety and health regulations in the United States?
- Equal Employment Opportunity Commission (EEOC)
- Occupational Safety and Health Administration (OSHA) (Correct answer)
- Department of Labor (DOL)
- National Labor Relations Board (NLRB)
Correct answer: Occupational Safety and Health Administration (OSHA)
OSHA is the federal agency under the Department of Labor tasked with setting and enforcing standards to ensure safe and healthful working conditions.
Question 6: In contract law, what does the term 'breach of contract' mean?
- A party negotiates better terms after signing
- One party fails to fulfill their contractual obligations without legal excuse (Correct answer)
- Both parties mutually agree to terminate the contract
- A contract is declared unenforceable by a court
Correct answer: One party fails to fulfill their contractual obligations without legal excuse
A breach of contract occurs when one party fails to perform their duties under the contract without a legally recognized excuse, entitling the other party to remedies.
Question 7: Which law prohibits employers from discriminating against employees or job applicants based on race, color, religion, sex, or national origin?
- Fair Labor Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Civil Rights Act of 1964, Title VII (Correct answer)
- Equal Pay Act of 1963
Correct answer: Civil Rights Act of 1964, Title VII
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, and national origin.
CBA Business Law & Compliance 1
Which type of business entity provides its owners with limited liability protection while allowing profits to pass directly to owners' personal tax returns?