Legal and Business Structure Flashcards
6 cards from real Entrepreneurship practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Legal and Business Structure flashcards as text
What is a registered agent for a business?
Answer: A designated individual or service authorized to receive legal documents on behalf of a business
A registered agent is a person or entity designated to receive service of process, government notices, and legal documents on behalf of a business entity.
What is the purpose of business insurance?
Answer: To protect a business from financial losses due to accidents, lawsuits, or other unexpected events
Business insurance protects entrepreneurs from potentially devastating financial losses due to liability claims, property damage, employee injuries, or other covered risks.
What is the difference between a patent and a copyright?
Answer: A patent protects inventions and innovations; a copyright protects original creative works like art and writing
Patents protect novel inventions and processes for a limited term (typically 20 years), while copyrights protect original creative expression automatically upon creation.
What is 'due diligence' in the context of a business acquisition?
Answer: A thorough investigation of a target company's finances, legal status, and operations before completing a purchase
Due diligence in an acquisition involves a systematic review of the target company's financial records, contracts, liabilities, and operations to verify claims and uncover risks.
What is a buy-sell agreement between business partners?
Answer: A legal agreement dictating what happens to a partner's ownership stake if they leave, die, or become disabled
A buy-sell agreement is a legally binding contract that outlines how a departing owner's shares will be valued and transferred if a triggering event occurs.
What is the purpose of a DBA ('doing business as') filing?
Answer: To legally operate a business under a trade name different from the owner's legal name
A DBA (also called a fictitious business name or trade name) allows an entrepreneur to conduct business under a name other than their own legal name or registered entity name.