Legal Underpinnings of Business Law

Legal Underpinnings of Business Law

Introduction

Generally business laws are related to the laws that are implemented to different business entities like partnerships and corporations. The business laws are also known as commercial laws. The business laws are the body of laws that are concerned with the rights, conduct of persons, relations and different types of business.

Discussion

Personal Liability Exposure

Business

Definition

Liabilities Against Lawsuit

Tinkers Home Security Service (sole proprietorship)

Sole Proprietorship is the business that is possessed by an individual person that is only one person owns the business (EO, 2010).

First of all it is clear that in such form of business, where owner is responsible for all the issues, risk and profits etc of the running the company. A lawsuit for sole proprietorship is very critical for the financial results for the owner (Sumroy, et.al, 2010). As a owner I will be responsible for the suit. Under the law, there are no legal divisions among the total assets and liabilities of such kind of business and also those of its owners.

The liabilities will be handled by the owner itself and he will be responsible for the lawsuits. This is more complex than other form of business because the owner itself is responsible for all the liabilities (Sumroy, et.al, 2010).

Tinker & Tailors Home Security Service (general partnership)

This kind of business is mainly owned by two or more people. All have one common goal of profit (EO, 2010).

As discussed in the definition, this form of business is owned by two or more partners. In this all the partners are accountable for the legal and other debts. So it means that all have to handle the lawsuits, weather some other partner has done it on the behalf of company. It as one great disadvantage that is the personal liability and the exposure to the liability is immense (Sumroy, et.al, 2010).

Tinker & Tailors Home Security Service (LP)

LP stands for limited partnership; this kind of business is owned by two or more people, with minimum one general partner and also one limited partner as well (EO, 2010).

In such form of business, we know that there is a general partner and a limited partner. In case of the lawsuit, the limited partners are not accountable for the liabilities because they are not looking at the daily operations etc. the general partners are responsible for the liabilities and other legal debts (Sumroy, et.al, 2010).

Tinker & Tailors Home Security Service, Inc. (corporation)

A corporation is a separate legal entity including stakeholders and directors (EO, 2010).

In corporation, the owner can be limited to the liabilities against the lawsuits. The owner can be liable in some cases but generally he can hold his assets and protect them (Sumroy, et.al, 2010).

Tinker & Tailors Home Security Service, LLC (LLC)

LLC stands for limited liability company. It basically is the mixture of partnership and corporate (EO, 2010).

Limited liability company provides owners with limited liability protection with respect to the assets that are owned by the owner subject to the lawsuits (Sumroy, ...