Partnership and Incorporation

Partnership and Incorporation

Explain the role of agency in your business association?

By definition, an agency is actually a fiduciary association cropping up from the joint manifestation of approval that an agent can act in support of and conditional on the control of the principal (Mattessich & Barbara, 1997). Agencies at the state and federal levels, corporations, universities and national nonprofits organizations have all offered support to partnerships with the impacts of community. Thus, Agency law deals with any relationship between a "principal" and an "agent" relationship which is a relationship wherein one individual has legal right to act on behalf of another individual. These types of relationships crop from open and clear appointment, or by insinuation. Generally, relationships linked with agency law consist of employer-employee, administrator-decedent or executor, and guardian-ward.

Thus, the role of the agency is to define the accountability of the principal for the dealings of the agent (McNeil, 1995). A real and valid agency demands that the function of the agent be the implementation or execution of the affairs of the principals. The agency elements consist of:

on behalf of,

Control of the principal,

Consent of both parties (explicitly or implicitly) (Mattessich & Barbara, 1997).

In point of fact, each partner is not just an agent of his associate partners but also as a affiliate of the partnership that is a principal. Therefore, in a routine and normal partnership, both of the partners are agents of the partnership for the function of their business; both partners' act that actually continues partnership business in the standard way tied the partnership. The notice or knowledge related to partnership of any partner is attributed to the partnership, except that partner is concerned or caught up in fraud or deception on the partnership. Both members of a standard partnership are also principals; each is independently accountable to third parties for the outcomes of the wrongful acts of the fellow partners and also for other obligations and debts of partnership.

Identify the advantages and disadvantages of partnerships, limited liability companies and corporations?

Selecting the right formation of business comes along with long-reaching effects. The manner one will pay taxes, the individual legal responsibility one will have, and the number of formalities and policies are directly reliant on the way one lawfully form his or her business (McNeil, 1995).

The most preferred and common choice is LLC i.e. Limited Liability Company. LLC is far more different as compare to the more conventional corporate organizations, even though they do have some characteristics in common.

LLCs have a tendency to be flexible though also save a person from personal accountability. They are not as planned and controlled as a corporation and require less paperwork. However this is just a general idea. Here are some advantages and disadvantages to assist a person in choosing LLC for his or her business.

Advantages

Flexibility in Taxes

In general, like a partnership or sole proprietorship, an LLC is not deemed as a separate unit from its owners. This denotes that one's LLC will not shell ...