Legal Aspects of Business

Legal Aspects of
Business

Authority is defined as a right or power to perform an act which is legal. Business
organisation is defined as an entity who perform their operations in a corporate world by
conducting transactions related to non monetary and monetary transactions. These will ensure
effective accomplishment of organisational goals as well as activities in a well defined manner
without any issues or hurdles (Gibbs, 2016). In this, as to manage important and essential
aspects of business owner appoints an agent who hold the responsibility to represent entity along
with principal among third party. Further this has been evaluated that stakeholders acts as one of
the most important and significant aspect for an organisation despite of their size and scope that
makes company to fulfil their expectations in a well defined an effective manner. In this agent
perform the role to acts as a bridge or medium to formulate communication among stakeholder
and entity. This is beneficial for the point of view of both parties.
Further it has been identified that, agency relationship is mainly developed among two
parties in which one party is termed as principal and other is known as agent. In addition to this,it
is basically identified as a fiduciary relationship which is mainly based upon the trust factor and
it must be ensured that any type of fraudulent shout be avoid (Garvin and Beloof, 2015). In this,
principal hold the authority to exercise control over agent and further provide instructions to
them as to conduct activities. In this law of agency defined that, it is essential to have formative
legal relationship among agents and principal. Further it has been identified that agency is
mainly formed by an agreement in which principal provide authority to agent as to act on the
behalf of principal. In addition to this, it has been evaluated that validity of this agreement only
retain for certain duration of time. Apart from this, it has been determined that particular form of
factors pertain in relationship in which it is essential to have some sort of authority along with
contractual form of obligation that are required to be entered into by third party with principal.
Furthermore, if it is talked about agency concept if an agent duly acts within scope then it
becomes important for principal to be liable for the related form of consequences. Apart from
this, this has been determined that in accordance with the concept of agency principal have
liability to pay required and necessary compensation or accomplish particular action sought by
third party. But if an agent any act beyond the authority set principal free from any legal
liabilities.
This has been identified that, numerous form of authority can be offered to an agent as to
allow them to act on the behalf of principal. In this actual authority is defined as a power that has
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