Legal Aspects of Business

LEGAL ASPECTS
OF BUSINESS

Business organisations can be seen in the corporate world which conducts number of
transactions monetary as well as non monetary form. These are important to carry the activities
without any hurdle. In order to focus on important aspects and matters, the owner usually
appoints an agent who can represent the company and the principal in front of a third party.
Stakeholders are influential and significant for every business organisation, and it is very
important for or a company to fulfil their expectations. Therefore, agent can act as a medium of
communication between the entity and the stakeholder followed by making decisions which are
for the benefit of both the parties (Gibbs, 2016).
Agency is the relationship that exists between two people where one is given the
authority by the principal to act on his behalf. It is very important in business world as a
principals become accountable for their actions weather on North reactions and law-abiding. It is
a way through which the third party is dealt by the agent on behalf of the principal. A contract is
formed between P and the A in which the agent and given our authorities do perform all the acts
on behalf of the principal. The definition of fiduciary relationship can be defined as a special
trust, confidence and reliance on one person by the other. The agency can be created by forming
an agreement either expressly or it can be an outcome of operation of law for carrying the
activities. The relationship gift democracy to run the company in accordance with the will of the
principal ((Borges, 2014).
It is a legal concept which guide a relationship formed between the principal and the
agent. There should be common interest of parties involved in an agency as it is the main feature
of law of agency. It is considered the foundation structure on which businesses are incorporated
together with formation of other form of entities such as partnership, companies, trusts etc. In
this, two parties are involved in which one party gives the consent to another party for carrying
the activities on the behalf of another person (principal) according to terms and conditions of the
agreement. There exists fiduciary and consensual relationship between two parties who are there
in agency. A contract is formed in which agent is responsible to carry all the activities on behalf
of principal (Singleton, 2015). There is an obligation of being loyal and follow every instructions
of the principal. Furthermore, there is a requirement that no negligence should be made by the
agent for while performing the tasks. In addition to this, for the acts of an agent, the principal is
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