Entrepreneurship Legal and Business Structure 2

Question 1

What is intellectual property (IP)?

Accepted Answer

Creations of the mind legally protected by patents, trademarks, copyrights, or trade secrets

Answer

Intellectual property refers to creations of the mind—inventions, designs, brand names, artistic works—that are legally protected from unauthorized use.

Question 2

What is a non-disclosure agreement (NDA)?

Accepted Answer

A contract requiring parties to keep specified information confidential

Answer

An NDA (or confidentiality agreement) is a legal contract in which parties agree not to disclose certain shared information to third parties.

Question 3

What is a non-compete agreement?

Accepted Answer

An agreement restricting an employee or partner from working for competitors for a set time after leaving

Answer

A non-compete agreement legally restricts an employee or business partner from working with competitors or starting a competing business for a defined period and geographic area.

Question 4

What is 'double taxation' in the context of a C corporation?

Accepted Answer

Corporate profits being taxed at the corporate level and again when dividends are paid to shareholders

Answer

C corporations face double taxation: profits are first taxed at the corporate rate, then shareholders pay personal income tax on dividends received.

Question 5

What is a franchise?

Accepted Answer

A business model where a franchisor licenses its brand, systems, and support to franchisees

Answer

A franchise is a contractual arrangement where a franchisor grants franchisees the right to operate a business using its brand, systems, and ongoing support in exchange for fees and royalties.

Entrepreneurship Practice Test

Entrepreneurship Practice Test

Entrepreneurship Legal and Business Structure 2