To Be Valid,a Noncompete Clause Must Be

question 34

Multiple Choice

To be valid,a noncompete clause must be

• A)ancillary to a legitimate bargain.
• B)reasonable in time, geographical area, and scope of activity when ancillary to the sale of a business.
• C)necessary to protect trade secrets, confidential information, or customer lists developed over an extended time when ancillary to an employment contract.
• D)All of the above.

---

Definitions:

SEC Requires

Mandatory rules and requirements established by the Securities and Exchange Commission that publicly traded companies must follow to protect investors and ensure the integrity of the securities markets.

Common Stock

Common stock represents units of ownership interest or equity in a corporation, where holders usually have voting rights to elect the board of directors.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often paying fixed dividends.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.