1.

Which of the following is an example of a sole proprietorship?

• Shawn is a partner in a successful downtown law firm. He has a number of clients that he is exclusively responsible for, so he works very hard to make sure they're happy with his services.

• Issa and Raymond start a t-shirt printing company that earns a small profit in its first year of operation. They both invested capital in the business to get it up and running, so they are both glad to share in the small profit.

• Gabrielle started a dog-walking company. She sometimes worries about the fact that she has no one to share the potential liabilities of the company with, but she does enjoy retaining 100% of the profits.

• Matt and Carlene are both owners of a business that sells hand-crafted home goods via the Internet. Although they both own the business, Matt is solely responsible for the business operations.

2.

A corporation is concerned about their exposure to criminal liability after the most recent election cycle placed a number of new legislators in Congress who campaigned against corporate corruption.

Select the strategy that would be least effective in reducing the company's criminal liability.

• It could prioritize ethical leadership when making hiring decisions for management-level positions.

• It could strengthen its code of ethics to reflect the current political mood.

• It could encourage reporting by establishing internal protections for whistleblowers beyond what is provided by Congressional law.

• It could donate to the election campaigns of the new members of Congress to establish goodwill.