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2025 Latest Utah Contractor Business and Law Exam
With 250 Real Exam Prep Questions And Correct
Verified Answers
Setting Up A Business in Utah - (answers)1-1 (Business Structure)
- Register the business in Utah with the Department of Commerce Division of
Corporations and Commercial Code.
- To form an entity use the One Stop Business Registration Process
(www.corporations.utah.gov)
- An entity formed in Utah is considered domestic. An entity formed outside of
Utah must register as a foreign entity.
' - (answers)
Child Labor (Location) - (answers)7-12 Labor Law
Sole Proprietorship - (answers)1-1, 1-2, 1-7 (Business Structure)
- Flexible because the structure is ONE PERSON with complete authority and full
liability.
- The individual operating the business in the model reports income with
SCHEDULE C AND FORM 1040.
Advantages: Simplicity and Easy Transfer of Ownership
- No formal action to start-up
- Sole Proprietors with no employees needs no EIN from the IRS
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- Sale of business is at discretion of the owner
Disadvantages: Unlimited personal responsibility.
- Personally responsible for all debts and obligations.
- Personal assets can be used to satisfy debts.
Partnerships - (answers)1-2, 1-3, 1-7 (Business Structure)
- Agreement between two individuals and based around contributing some asset.
- Each Partner shares in the profits and loses of company.
Advantages: Limited Partnerships
- A limited partner's financial responsibility is limited to liabilities of the business.
Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation - (answers)1-3, 1-4, 1-7 (Business Structure)
- Limited to 100 persons
- Only one class of stock
- File taxes under form 1120s
ADVANTAGES:
- Liability protection: S corps hold all business liability.
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- Tax Benefits: only wages are subject to employment tax.
DISADVANTAGES:
- Increased regulation: S corps require routine meetings with minutes taken at the
meeting.
- Restriction of Ownership: restricted on size and membership
C Corporation - (answers)1-4, 1-5, and 1-7 (Business Structure)
- An independent legal entity owned by shareholders but the shareholders are not
liable for the actions and debts of the corporation.
- Corporations use form 1120 or 1120-A income tax return
Advantages:
- Liability Protection: corporations create a new legal entity.
- Stock: able to issue stocks, and ownership is transferred through sale of stocks.
- Tax Advantages: corporations file taxes separate from the owners
Disadvantages:
- Double Taxation: Corporate profits are taxed at corporate level and when
dividends are paid to shareholders.
Limited Liability Company - (answers)1-5 and 1-7 (Business Structure)
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- Entitiy formed under state law by filing articles of organizations. An LLC may be
classified for tax purposes as a partnership, cooperation, or entity disregarded as
an entity separate from its owner by applying the rules.
- No tax paid at entity level. Profits and losses are passed through to the
members.
General Liability - (answers)2-1 (Insurance/Bonds)
- General Liability Insurance is issued to protect against liability claim for bodily
injury and property damage arising out of premises, operations, products, and
completed operations.
- Liability insurance is designed to offer specific protection against THIRD PARTY
(NON EMPLOYEE) INSURANCE CLAIMS.
Umbrella Liability - (answers)2-2 (Insurance/Bonds)
- Coverage thats can provide additional limit over the underlying primary policy.
- It may have a broader definition of coverage and help fill gaps in coverage.
Property Insurance - (answers)2-2 (Insurance/Bonds)
- Commercial property insurance protects the property of the business, such as
the buildings and equipment. Often property insurance policies are written to
cover specific risks, such as FIRE insurance, FLOOD insurance, or EARTHQUAKE
insurance. These are called NAMED PERIL OR ALL-RISK POLICIES.
Certificate of Insurance - (answers)2-2 (Insurance/Bonds)
2025 Latest Utah Contractor Business and Law Exam
With 250 Real Exam Prep Questions And Correct
Verified Answers
Setting Up A Business in Utah - (answers)1-1 (Business Structure)
- Register the business in Utah with the Department of Commerce Division of
Corporations and Commercial Code.
- To form an entity use the One Stop Business Registration Process
(www.corporations.utah.gov)
- An entity formed in Utah is considered domestic. An entity formed outside of
Utah must register as a foreign entity.
' - (answers)
Child Labor (Location) - (answers)7-12 Labor Law
Sole Proprietorship - (answers)1-1, 1-2, 1-7 (Business Structure)
- Flexible because the structure is ONE PERSON with complete authority and full
liability.
- The individual operating the business in the model reports income with
SCHEDULE C AND FORM 1040.
Advantages: Simplicity and Easy Transfer of Ownership
- No formal action to start-up
- Sole Proprietors with no employees needs no EIN from the IRS
,2|Page
- Sale of business is at discretion of the owner
Disadvantages: Unlimited personal responsibility.
- Personally responsible for all debts and obligations.
- Personal assets can be used to satisfy debts.
Partnerships - (answers)1-2, 1-3, 1-7 (Business Structure)
- Agreement between two individuals and based around contributing some asset.
- Each Partner shares in the profits and loses of company.
Advantages: Limited Partnerships
- A limited partner's financial responsibility is limited to liabilities of the business.
Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation - (answers)1-3, 1-4, 1-7 (Business Structure)
- Limited to 100 persons
- Only one class of stock
- File taxes under form 1120s
ADVANTAGES:
- Liability protection: S corps hold all business liability.
,3|Page
- Tax Benefits: only wages are subject to employment tax.
DISADVANTAGES:
- Increased regulation: S corps require routine meetings with minutes taken at the
meeting.
- Restriction of Ownership: restricted on size and membership
C Corporation - (answers)1-4, 1-5, and 1-7 (Business Structure)
- An independent legal entity owned by shareholders but the shareholders are not
liable for the actions and debts of the corporation.
- Corporations use form 1120 or 1120-A income tax return
Advantages:
- Liability Protection: corporations create a new legal entity.
- Stock: able to issue stocks, and ownership is transferred through sale of stocks.
- Tax Advantages: corporations file taxes separate from the owners
Disadvantages:
- Double Taxation: Corporate profits are taxed at corporate level and when
dividends are paid to shareholders.
Limited Liability Company - (answers)1-5 and 1-7 (Business Structure)
, 4|Page
- Entitiy formed under state law by filing articles of organizations. An LLC may be
classified for tax purposes as a partnership, cooperation, or entity disregarded as
an entity separate from its owner by applying the rules.
- No tax paid at entity level. Profits and losses are passed through to the
members.
General Liability - (answers)2-1 (Insurance/Bonds)
- General Liability Insurance is issued to protect against liability claim for bodily
injury and property damage arising out of premises, operations, products, and
completed operations.
- Liability insurance is designed to offer specific protection against THIRD PARTY
(NON EMPLOYEE) INSURANCE CLAIMS.
Umbrella Liability - (answers)2-2 (Insurance/Bonds)
- Coverage thats can provide additional limit over the underlying primary policy.
- It may have a broader definition of coverage and help fill gaps in coverage.
Property Insurance - (answers)2-2 (Insurance/Bonds)
- Commercial property insurance protects the property of the business, such as
the buildings and equipment. Often property insurance policies are written to
cover specific risks, such as FIRE insurance, FLOOD insurance, or EARTHQUAKE
insurance. These are called NAMED PERIL OR ALL-RISK POLICIES.
Certificate of Insurance - (answers)2-2 (Insurance/Bonds)
