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Utah Contractor Business and Law Exam
2022 Questions and Correct Answers/
Latest Update / Already Graded
Setting Up A Business in Utah
Ans: 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.
'
Ans:
Child Labor (Location)
Ans: 7-12 Labor Law
Sole Proprietorship
Ans: 1-1, 1-2, 1-7 (Business Structure)
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- 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
- 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
Ans: 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.
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Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation
Ans: 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.
- 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
Ans: 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.
All rights reserved © 2025/ 2026 |
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- 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
Ans: 1-5 and 1-7 (Business Structure)
- 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
All rights reserved © 2025/ 2026 |
Utah Contractor Business and Law Exam
2022 Questions and Correct Answers/
Latest Update / Already Graded
Setting Up A Business in Utah
Ans: 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.
'
Ans:
Child Labor (Location)
Ans: 7-12 Labor Law
Sole Proprietorship
Ans: 1-1, 1-2, 1-7 (Business Structure)
All rights reserved © 2025/ 2026 |
, Page |2
- 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
- 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
Ans: 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.
All rights reserved © 2025/ 2026 |
, Page |3
Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation
Ans: 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.
- 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
Ans: 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.
All rights reserved © 2025/ 2026 |
, Page |4
- 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
Ans: 1-5 and 1-7 (Business Structure)
- 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
All rights reserved © 2025/ 2026 |
