1. Chapter 5

2.  Regulations are rules that government agencies issue to implement laws.  Businesses spend a lot of time and money making sure they comply with laws and regulations and do not face unwanted liability.

3. 1. Corporate law 2. Tax law 3. Intellectual property law 4. Consumer law 5. Commercial law 6. Licensing and zoning law

4. Not all companies are alike. How is the business organized?  Sole proprietorships  Partnerships  Corporations

5.  Simplest kind of business  Owned by a single individual, or proprietor. Often are small businesses or entrepreneurs.  Easy to start, simply begin doing business.  Advantages- control the entire business/keep all profits/pay fewer taxes than other kinds of businesses.  Disadvantages- Full responsibility (debt, failure, sickness)

6.  Association of 2 or more persons who jointly own a for-profit business.  Under law, “persons” can be corporation or another organization or individual  Uniform Partnership Act – governs general partners requires them to by owned by two or more parties and share in the profits.

7.  Share responsibility making decisions  Pays less in taxes than a corporation  MAY have an easier time getting a loan than sole proprietorship  Disadvantage- unlimited liability (even if partner can not pay debt you are still liable) and disagreements.

8.  A business formed under state or federal statutes that is authorized to act as a legal person.  Owners have LIMITED liability, meaning they cannot lose their personal resources if the corporation fails, only the corporation loses.

9.  Advantages-  Stockholders limited liability and a share of profits.  Stockholders have no management responsibilities.  Corporations can raise money by selling stock.  Generally have an easier time getting credit than any other type of business

10.  Disadvantages-  Must comply with many more federal and state laws than other types.  Must register with a state govt. agency to begin a business (sole proprietor does not)  Pay more taxes than any other type of business. They pay special taxes to the state and federal govt. as well as tax on profit.

11.  The type of ownership managers choose for their businesses often depends on the types of taxes involved.  Taxes are monies paid by corporations and individuals used to fund government programs and services.

12.  Income tax (most important)  Taxes levied against a business’s profits.  Profits $100,000 and Tax 26%, then amount =?  Withholding Federal Taxes  Businesses collect taxes from workers  Can vary from state to state  Without the help of business, it would be very difficult for the govt. to collect taxes from workers.

13.  Property tax  Taxes levied against the property, buildings, or land owned by a business.  Based on assessed valuation (valued by tax assessor) of building or land.  Taxes may hurt profits, businesses often pass on cost to consumers

14.  Businesses are protected by intellectual property laws  Patents  Document issued by the federal government to inventors and companies that gives them the exclusive rights to make, use, and sell their inventions for 17 years.  When 17 years is up, other companies can begin selling that invention.  The inventor of each type of new product must apply for another patent.

15.  Trademarks  Word, name, symbol or slogan a business uses to identify its own goods and set them apart from others. Companies must apply to Fed Govt.  Good for ten years and must be renewed.  Copyrights  Protection provided for a creative work, such as literary works, musical compositions, plays, dances, paintings, movies, maps, and computer programs.  Good for the holder’s life plus 70 years, after that is becomes “public domain”.

16.  Consumers are individuals who buy goods and services for their own use.  Federal Trade Commission (FTC)  Takes action against a company if it receives enough consumer complaints to establish a “pattern of wrongdoing.”  Sales rules created by FTC ▪ Used Car Rule – requires dealers to tell customers important information about a used car.

17.  Includes FDA which protects consumers against problems with mislabeled and impure foods, drugs, cosmetics, and medical devices.  Fair Packaging and Labeling Act requires manufacturers of foods, drugs, cosmetics, and medical devices to clearly label products with the name of the manufacturer, the contents, and the amount of package contains.

18.  Contracts  Agreement between two parties to carry out a transaction (ex: Sale of goods from seller to buyer)  Anyone entering into a contract must know what is in the contract and ensure it is properly prepare.  Often difficult to break and can be taken to court if broken.  Uniform Commercial Code – specified requirements for a contract.

19.  Regulates who can operate a businesses and where owners can set up shop  Licensing  Way to limit and control people who plan to enter certain types of businesses (i.e. restaurants)  Building codes  Regulate business through physical features or structures of building  Zoning  Regulates where a building can be built through ordinances (commercially zoned areas versus residential)

20.  Answer questions on page 118.

21.  Regulate the relationship between companies and their workers and gives workers significant rights and benefits.  Equal Employment Opportunity (EEO) laws  Occupational safety and health laws  Wage-hour laws  Benefits laws  Labor relations laws

22.  Title VII of the Civil Rights Act of 1964  Companies cannot discriminate against an employee because of race, color, religion, sex, or national origin.  EEOC can sue a company that discriminates against an employee.  Age Discrimination in Employment Act  Protects workers 40-70 years of age.  Americans with Disabilities Act  Cannot discriminate based on disabilities and illnesses (blindness or diabetes) and must provide reasonable accommodations

23.  Sets standards for keeping workers clean and free of hazards, such as unsafe machinery and dangerous chemicals.  Businesses must keep records of employee illness, injuries, and deaths, and report them.  Occupational Safety and Health Administration (OSHA) inspectors visit workplaces every year to make sure they comply with regulations.

24.  Fair Labor Standards Act (FLSA) (Wage-Hour Law) protects workers:  Sets the. number of hours employees can work in a week without receiving overtime pay  Prohibits companies from employing children under 14  Sets the minimum wage companies can pay their workers

25.  Social Security Act  Employee Retirement Income Security Act  Unemployment Insurance Laws (p 124)  Workers’ Compensation Laws  Family and Medical Leave Act (FMLA)

26.  National Labor Relations Act  Companies must at least listen to what their unions say they want for their members in terms of wages, hours, and conditions of employment (such as safety in the workplace)  Unions  Groups of workers who collectively bargain for rights such as higher wages and better working conditions.

27.  page 129  Fact and Idea  Critical Thinking  Case Analysis