CBB Legal & Regulatory Compliance 2

Question 1

Under the Uniform Commercial Code (UCC), which article primarily governs the sale of business assets such as inventory and equipment?

Accepted Answer

Article 2 – Sales

Answer

UCC Article 2 governs the sale of goods, which includes business inventory and equipment transfers.

Question 2

A bulk sale occurs when a business sells a major portion of its inventory outside the ordinary course of business. Which law historically required notice to creditors in such transactions?

Accepted Answer

The Bulk Sales Act (UCC Article 6)

Answer

UCC Article 6 (Bulk Sales) historically required buyer notification to seller's creditors to prevent fraudulent asset transfers.

Question 3

When a business broker represents both the buyer and seller in the same transaction, this is known as:

Accepted Answer

Dual agency

Answer

Dual agency occurs when one broker (or brokerage) represents both parties simultaneously, creating potential conflicts of interest.

Question 4

Which federal agency enforces the Hart-Scott-Rodino (HSR) Act, which requires pre-merger notification for certain large business acquisitions?

Accepted Answer

FTC and DOJ jointly

Answer

The FTC and DOJ Antitrust Division jointly administer HSR pre-merger notification requirements.

Question 5

A seller's promissory note taken back as part of the purchase price is called:

Accepted Answer

Seller financing or seller carryback

Answer

Seller financing (carryback) means the seller accepts a promissory note from the buyer rather than all cash at closing.

(CBB) Certified Business Brokers Practice Test

(CBB) Certified Business Brokers Practice Test

CBB Legal & Regulatory Compliance 2