ACE 06 Legal & Business

Question 1

Which of the following is NOT one of the potential benefits of a sole proprietorship?

Answer 1

A corporate veil shields the owner from losses

Why?

In a sole proprietorship, financial losses and liabilities are the sole responsibility of the owner. There is no corporate veil that shields the actions of the business from the personal responsibility of the owner, even if the owner conducts business under a different company name.

Question 2

When working in a general partnership with a family member, it is a good idea to operate the business as a 50-50 partnership so that both partners have an equal say in how the business is run.

Answer 2

FALSE

Why?

Most attorneys will advise against operating a business as a 50-50 partnership, even if it involves owners from the same family. A 50-50 partnership can result in a stalemate, because neither partner can institute policy without the permission of the other, since business decisions must be approved by a majority (50.1%) of the owners.

Question 3

A company experiences a yearly loss and one of the partners uses that loss to offset profits from another business. This is an example of __________.

Answer 3

Flow-through taxation

Why?

In sole proprietorships and partnerships, profits are taxed at lower personal rates rather than higher corporate rates. In addition, yearly losses can flow-through to be used by the owner to offset profits from other income.

ACE Personal Trainer Manual, 5th edition, p. 642

Question 4

Which type of corporation is most typically used by personal-training businesses?

Answer 4

Subchapter S-corporations

Why?

Subchapter S-corporations, or S-corps, are the most “typical” type of corporation used by personal-training businesses that do not operate as sole proprietorships or partnerships.

ACE Personal Trainer Manual, 5th edition, p. 643

Question 5

Which of the following business structures has double taxation as one of its primary disadvantages?

Answer 5

C-corporation

Why?

C-corporations, or C-corps, are taxed as a company first and then any profits that are remaining may be provided to shareholders. Since the shareholders must then pay taxes on their dividends, C-corps are said to provide double taxation.

ACE Personal Trainer Manual, 5th edition, p. 644

Question 6

Which of the following standards has been used when a plaintiff is prevented from receiving remuneration following an injury due to the fact that he was found to have played a minor role in his own injury?

Your Choice was:

Answer 6

Contributory negligence

Why?

In certain states, contributory negligence laws prevent a plaintiff in a lawsuit who has played some role in the injury from receiving any remuneration. For example, if a client failed to notify a trainer that the soles of one of his shoes had been slipping, he would be partially to blame if his foot slipped while conducting a squat lift, even if the trainer did not properly spot the client. The client’s improper actions bar him from recovering any money, even though the trainer was partially at fault.

Question 7

Which of the following activities falls outside a personal trainer’s scope of practice?

Answer 7

Providing progressive exercise prescriptions

Why?

Many states allow exercise “prescriptions” to be developed only by a licensed doctor. Therefore, it is important that trainers provide exercise programs, not exercise prescriptions. Although the difference between these terms may sound like a technicality, it could become an important issue in a courtroom.

ACE Personal Trainer Manual, 5th edition, p. 661

Question 8

An umbrella liability policy provides added coverage for all of the other insurance that a person may have in place.

Answer 8

TRUE

Why?

The umbrella policy provides added coverage for all of the other insurance (e.g., auto, home, professional liability) that a person may have in place.

ACE Personal Trainer Manual, 5th edition, p. 665

Question 9

When training in a client’s home, a personal trainer must use recordings produced specifically for use in fitness facilities or risk being in violation of copyright law.

Answer 9

FALSE

Why?

When training clients in their homes, personal trainers can have clients provide the music for each session. In effect, the clients are then using these recording for their own private, non-commercial enjoyment during exercise.

ACE Personal Trainer Manual, 5th edition, p. 667

Question 10

When evaluating the risk of injury associated with a particular activity, a personal trainer finds that the frequency of occurrence is low or seldom, and the severity of injury is categorized as high or vital. What is the BEST course of action?

Answer 10

Transfer

Why?

The best course of action in this situation is to transfer the risk, which involves moving the risk to others through waivers, insurance policies, etc.

ACE Personal Trainer Manual, 5th ed., p. 669

Question 11

Which of the following is a DISADVANTAGE of working as a direct employee?

Answer 11

The personal trainer likely has to work an established minimum number of hours.

Why?

The personal trainer likely has to work an established minimum number of hours.

Many employers have requirements for the minimum number of hours that a direct employee must work and will terminate an employee if he or she fails to meet these requirements.

ACE Personal Trainer Manual, 5th edition, p. 675

Question 12

Which of the following is an ADVANTAGE of working as an independent contractor?

Answer 12

The facility allows the trainer to establish all training fees.

Why?

The facility allows the trainer to establish all training fees.

The independent-contractor model allows the trainer to make a decision about how much money to charge for his or her services. The other three choices are advantages of working as a direct employee.

ACE Personal Trainer Manual, 5th edition, p. 677

Question 13

In which section of a business plan should a personal trainer identify the operating model and how it is different or unique when compared to other training studios in the area?

Answer 13

Business description

Why?

The business description should accomplish the following:

Identify the operating model and how it is different or unique when compared to other training studios in the area
Describe the fitness industry specific to the local market
Provide details such as the number and location of competitors, how many employees they have, and the number of clients to whom they provide services
List the members of the management team, highlighting their knowledge, skills, and experience
ACE Personal Trainer Manual, 5th edition, p. 679

Question 14

Which of the following is NOT one of the key components of the marketing plan portion of the business plan?

Answer 14

The barriers of entry into the business

Why?

The discussion of the barriers to entry, including the costs associated with starting a business, such as rental fees, equipment, employees, and marketing, are included in the risk analysis section of the business plan.

ACE Personal Trainer Manual, 5th edition, p. 680

Question 15

Small-group personal training provides financial benefits to both the trainer and client.

Answer 15

TRUE

Why?

Personal trainers who offer small-group training services increase their hourly earning power while giving each client a reduced cost of training. For example, a trainer who typically charges $60 per session can reduce the cost to $45 for each client, thereby increasing his or her hourly income to $90 for two participants.

Question 16

What is the BEST response if a prospective client is unable to adjust his or her schedule to fit into the time that the personal trainer has available?

Answer 16

The trainer should refer this client to another trainer working in the facility.

Why?

If a prospective client is not able to adjust his or her schedule to fit into the time that a trainer has available, that client should be referred to another trainer who has availability at that time. Developing these relationships and the confidence to refer business away to other trainers will help a trainer establish a professional image.

ACE Personal Trainer Manual, 5th edition, p. 698

Question 17

Most buying decisions, particularly when it comes to service businesses like personal training, are financially driven.

Answer 17

FALSE

Why?

Buying decisions are emotionally driven, meaning that prospective clients will think with logic, but act on emotion.

ACE Personal Trainer Manual, 5th edition, p. 701

Question 18

Having friends or family members pay you directly for personal-training services instead of processing those fees through the fitness facility is a good way to supplement your income.

Answer 18

FALSE

Why?

This practice, which is known as “training under the table,” is illegal, unethical, and in violation of the ACE Code of Ethics.

ACE Personal Trainer Manual, 5th edition, p. 677

Question 19

What is hypoglycemia?

Answer 19

Hypoglycemia is a condition caused by a very low level of blood sugar (glucose), your body’s main energy source.

Hypoglycemia is often related to the treatment of diabetes.

If blood sugar levels become too low, signs and symptoms may include:

An irregular heart rhythm
Fatigue
Pale skin
Shakiness
Anxiety
Sweating
Hunger
Irritability
Tingling sensation around the mouth
Crying out during sleep

Immediate treatment of hypoglycemia is necessary when blood sugar levels are at 70 milligrams per deciliter (mg/dL) or 3.9 millimoles per liter (mmol/L) or below. Treatment involves quick steps to get your blood sugar level back into a normal range either with high-sugar foods or drinks or with medications.

Question 20

What’s dyspnea?

Answer 20

Difficult and labored breathing can be common occurrence, such as when an unconditioned person attempts to exercise vigorously.

Do no lie down a person. Lying down may increase the difficult of breathing.

Question 21

What is a sever choking?

Answer 21

When the person cannot breathe, make sounds, or has a very quiet cough, the blockage is severe.

Question 22

What is asthma?

Answer 22

chronic inflmmation of the airway with symptoms such as wheezing, shortness of breath, tightness in the chest, and coughing.

Question 23

What is Coronary artery disease or atherosclerosis?

Answer 23

Plaque (substance made up of fat, cholesterol, calcium, and other substances) stick to artery walls and narrow or completely obstruct the vessels.

Question 24

What is hypertension?

Answer 24

Hypertension is another name for high blood pressure.

Question 25

what is heart attack?

Answer 25

due to an obstruction in a coronary vessel that prevents part of the heart muscle from getting adequate blood flow and exygen. When plaque buils up in the arteries and prevents proper blood flow to the heart, chest pain called angina pectoris can occure.

Question 26

Difference between heart attack and cardia arrest

Answer 26

A heart attack is when blood flow to the heart is blocked, and sudden cardiac arrest is when the heart malfunctions and suddenly stops beating unexpectedly. A heart attack is a “circulation” problem and sudden cardiac arrest is an “electrical” problem.

Question 27

What is angina pectoris?

Answer 27

Angina pectoris is described as chest pressure or squeezing feeling, whcih may be mistaken for heartburn or indigestion. Shortness of breath may accompany these symptoms, and they may even take place without any chest pain. Nausea, cold sewat and lightheadedness may also occur.

Most heart attack warning signs are not sudden and intense, most have such a gradual onset that the person experiencing the symptoms does not realize what is happening. This delay in getting treatment can be fatal.

Question 28

What is hypertension?

Answer 28

This means that the blood applies too much force against the walls of the blood vessels.

Medical guidelines define hypertension as a blood pressure higher than 130 over 80 millimeters of mercury (mmHg)

A person with hypertension may not notice any symptoms, and it is often called the “silent killer.” While undetected, it can cause damage to the cardiovascular system and internal organs, such as the kidneys.

It is maintained that high blood pressure causes sweating, anxiety, sleeping problems, and blushing. However, in most cases, there will be no symptoms at all.

If blood pressure reaches the level of a hypertensive crisis, a person may experience headaches and nosebleeds.

Question 29

What is syncope (fainting) and treatment?

Answer 29

temporary loss of consciousness due to a lack of blood flow to the brain.

Before a person faints, s/he may feel a warm sensation, nausea, or lighteheadedness.

Have the person sit of lie down.

Question 30

What is a stroke?

Answer 30

ischemic stroke - blockage in a vessel occurs in the brain (80%).
hemorrhagic stroke - rupture of a blood vessel (20%).

Question 31

What is hypoglycemia?

Answer 31

Hypoglycemia, also known as low blood sugar, is when blood sugar decreases to below normal levels.

Question 32

What is diabetes?

Answer 32

a disease in which the body’s ability to produce or respond to the hormone insulin is impaired, resulting in abnormal metabolism of carbohydrates and elevated levels of glucose in the blood.

blood sugar become too high and glucose is passed into the kidneys, where it is excreted with a lot of water and electrolytes, leaving the person weak, thirsty, and fatigued.

Check blood glucose levels if they are at least 100 mg/dL before resuming activity if person is feeling hypoglycemia (low blood sugar).

Question 33

Hyperglycemia VS hypoglycemia

Answer 33

hyperglycemia - blood sugar becomes too high
hypoglycemia - blood sugar becomes too low (more common in fitness setting).

if client vomite, injected too much insulin, done physical activity without eating enough food, s/he may experience low blood sugar&raquo_space; headache, hunger, weakness, sweating, or fatigue.

treatment: give 20-30g of carbohydrates - sugary drik (juice or regular soda), packet of sugar or honey to raise blood sugar back to normal level.

Important not to give food with little sugar: e.g. chocolate, diet soda, artificial sweetenders.

Question 34

Best time to exercise to avoid hypoglycemia (low blood sugar) is….

Answer 34

because of daily variations of growth hormone and cortisol, best time to exercise to avoid hypoglycemia is usually in the morning, 1-3 hrs after a meal.

Question 35

Check for diabetes before exercise

Answer 35

1. check blood glucose levels.
   If below 100 mg/dL, pre-exercise snack should be eaten that is high in complex carb and low in fat.
   If 100 - 250 mg/ dL - can exercise, but extra cal need to be consumed during or after exercise. Sports drinks sipped throughout the exercise to maintain blood sugar.
   If blood sugar > 250 mg/dL and there is presence of ketones in the urine (or 300 mg/dL without ketones), exercise should not be done until blood sugar is better controlled.

Question 36

A negligent act can occur if a trainer fails to act (__________) or acts inappropriately (_________ ) act of commission.

Answer 36

Act of omission (e.g. failed to spot a client during a bench press)
Act of commission (e.g. programming straight-leg sit-ups for a client with known lower-back problems)

Question 37

What is vicarious liability aka respondeat superior?

Answer 37

Employers are responsible for the employment actions of their employees.

Question 38

What is gross negligence?

Answer 38

An action that demonstrates recklessness or a willful disregard for the safety of others.

Question 39

What is contributory negligence?

Answer 39

Plaintiff has played some role in the injury from receiving any remuneration. E.g. client failed to notify trainer that the soles of one os his shoes has been slipping, he would be partially to blame if his foot slipped while conducting a squat lift, even if the trainer did not prperly spot the client.

Question 40

Can minors (child) sign a waiver?

Answer 40

No, minors cannot legally sign a contract.

Question 41

Can personal trainers provide exercise prescriptions?

Answer 41

No. Personal trainers provide exercise programs. Prescriptions need to be provided by doctors.

Question 42

How much insurance coverage does ACE recommends for personal trainer?

Answer 42

$1 mil coverage - as medical expenses can easily cost hundreds of thousands of dollars, clients may sue for lost wages from being unable to work or pain and suffering. and loss of consortium.

Question 43

What’s an umbrella liability policy?

Answer 43

Provides added coverage for all of the other insurance (e.g. auto, home, and professional liability) that a person may have in place.

Question 44

What’s keyman insurance?

Answer 44

a policy designed to compensate the business for the loss of a person who performs a unique and valuable function.

Question 45

If a fitness centre utilizes music or television broadcasts as a key component of its business, does it violates the copyright?

Answer 45

Yes as music recordings are intended strictly for the private, noncommercial use of the purchaser.

However, when training clients in their homes, personal trainers can have clients provide the music for each session. The clients are then using the recording for their own private, non-commercial enjoyment during exercise.

Question 46

5 steps for risk management

Answer 46

1. Risk identification
2. Risk evaluation - probability and impact
3. Select approach to deal with risks
4. Implementation - institute the plan
5. Evaluation

Question 47

4 approaches for managing each risk

Answer 47

1. Avoidance
2. Transfer
3. Reduction
4. Retention

Question 48

Which business structure combines the limited liability and flow-through taxation of the S-corp with easier creation and operation requirements?

Answer 48

Limited liability partnership

Question 49

Personal trainers who provide training sessions to individuals and/or groups in clients’ homes or outdoor settings should check with thier current insurance providers to see if they are covered for training in these settings or if they need to add a(n)____ policy to their existing professional liability insurance.

Answer 49

Specific insurance rider

Question 50

Which of the following would violate intellectual property laws?

Answer 50

Using the ACE log to promote nutritional products, DVDs, or equipments sold by an ACE Certified professional

Question 51

Examples types of programs to offer

Answer 51

1. Performance enhancement: Testst that can be used to demonstrate progress in a performance-enhancement program include movement screens, the vertical jump, or the pro agility test
2. Weight loss: Assessments to demonstrate client progress include assessing the client’s body composition, taking circumference measurements, or tking individual skinfold measurements
3. Event preparation: wedding/ trip/ reunion.
4. Post-rehabilitation: movement screens are effective way of measuring improvement from a personal-training program for clients who have been released from physical therapy.