Legal Aspects of Business: An Overview of Agency and Company Law

This report provides an overview of the legal aspects of business, focusing on agency law and company law. It discusses the importance of legal frameworks in business, the tripartite relationship between principals and agents, and the significance of company law in defining the formation and duties of directors. The report explains the responsibilities of agents towards their principals, as outlined in agency laws, including the duties to follow instructions, perform work with care and skill, avoid conflicts of interest, maintain accounts, and avoid delegating work or accepting bribes. Furthermore, it covers the Companies Act 2006, specifically Section 171 regarding the duty of directors to act within their powers, referencing the case law of Criterion Properties PLC V Stratford UK properties to illustrate this principle. The document emphasizes how legal frameworks are essential for achieving organizational goals and objectives and fostering a concrete framework for business operations.

LEGAL ASPECT OF
BUSINESS

INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................4
REFRENCES...................................................................................................................................5

INTRODUCTION
Legal aspect of business is very important kind of rules and regulations which deals with
the business organization and its growth in market. Such aspects provides a framework which
helps in creating a strong base in an organization. This helps an organization in improving of
decision making that is generated which helps in achieving of goals and objectives with
effectiveness. These laws are formed in order to show a tripartite kind of relationship which exist
between principal and agent. All rules which exist under it are formed within parliament Agency
laws are those laws which deals with working of agencies under agreement with higher
company. Company law are those laws which specifically explain about formation of company
and duties of directors. Scope of these laws is very wider in sense that it covers various aspects
of a business organization. Nature is dynamic as it affects decision making procedure of an
organization. In the following file concept of legal aspect is going to be discussed with agency
law. Duties of principal and agent are going to be discussed with Duty of director to act within
its power.
MAIN BODY
Agency laws is considered to be laws that are enactments which helps an company to
grow in business environment. Responsibilities given by principal to agent have to be followed
by him. These duties are related to task assigned to agent through principal. All agents have to
follow these responsibilities assigned through principal to them. These duties are given to an
agent as per the contract that has been signed by him (Horváth, 2019). These are time bound
contracts which means they are given only for a specific period of time. Such contract or
agreement is legal under the eyes of law because it has been signed by principal and agent both.
All this is done to make principal secure from any kind of effect which could happen over him
because of liability occurred out of these condition. It is required to understand that if any kind of
problem and violation has been done on part of principal. In such condition he has to be held
liable for it. Certain duties are there that has to be performed by an agent towards principal.
These kinds of duties are explained under agency laws. All these are required to be fulfilled as
per agreement given. Such duties are as follows.
The duty which has to be followed by agent at the time of accomplishing his task assigned to him
by principal is “Duty to follow instruction given by principal in lawful manner”. Second duty
that has to be obeyed by the agent towards principal is “Duty of performing a work with care
and skill”. Another duty which an agent must obey of principal is “duty to avoid any kind of
conflict between agent and principal”. Further the duty which an agent has to obey as per the
contract is “Duty of account”. Another duty has been given to agent which is” duty not to
delegate work”. Last duty that has to be followed by agent towards principal is“Duty not to
accept bribe”. All these duties are very general and related to basic aspect of an agent and

principal relationship which exist over contractual basis (Andreeva, Dimitrova and
Aleksandrova, 2019).
Also certain laws are their which are related to formation of an organization these laws are
known as company laws. Under such laws various aspects is covered that is related to business
and organization performing it. In United Kingdome these laws are combined under an act
known as Companies act 2006. It is form to reduce complexity and define duties of directors.
Under section 171 of the act a duty of director is “duty to act within powers”. This means that
all directors are bound to follow the rules and regulation defined by a company and his powers
should no be used in illegal manner which in violating these rules. Case law regarding this is
Criterion Properties PLC V Stratford UK properties. In this case it was held by judges that
claim for a declaration over an agreement, from its joint venture. This was enforceable by
partners against it. The parties have entered into a supplementary agreement in which investment
vary. Agreement has been set aside as it has achieved its purpose (Amosova, 2016).
CONCLUSION
In the above file legal aspects of business is covered with agency laws this means when
goals and objectives of an organizations has to be achieved then such aspects plays major role in
creating a concrete framework. Also company law concept is covered which deals with
formation of a company and duties given by director in it. Further relationship between principal
and agent is that in which a principal hires agent to perform his task upon his behalf. Duties of
agent towards principal is covered and duty of director is also talked in context of Companies
Act 2006.

REFRENCES
Books and journals
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Andreeva, A., Dimitrova, D. and Aleksandrova, N., 2019. Legal and Economic Aspects of the
Control over the Business Activity of State Higher Schools. Ikonomiceski i Sotsialni
Alternativi. (4). pp.74-85.
Horváth, Z., 2019. Legal Aspects of a Venture Capital Financing. Innovation and
Entrepreneurship: A New Mindset for Emerging Markets, Emerald Publishing Limited,
pp.189-198.
Frolova, E.E. and et. al., 2018. Studying Concepts of the Breakthrough Economic Reforms in
Selected Developed and Developing Countries and Regions of the World: Economic and
Legal Aspects. Journal of advanced research in law and economics. 9(4 (34)). pp.1236-
1242.
Semyachkov, A.I. and et. al., 2018, October. Legal Aspects of Man-Made Mineral Waste
Management. In 2018 IEEE International Conference" Management of Municipal Waste
as an Important Factor of Sustainable Urban Development"(WASTE) (pp. 66-68). IEEE.
Kowarski, C.B., de Souza, M.I.L. and de Souza, R.B., 2019. Decommissioning in Brazil: legal
aspects of a technical analysis. The Journal of World Energy Law & Business. 12(5).
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