1. Fundamentals of BUSINESS ORGANIZATIONS FOR PARALEGALS Third Edition
Deborah E. Bouchoux

2. Introduction to Business Organizations and Agency Law
Chapter One
Introduction to Business Organizations and Agency Law

3. Key Types of Business Enterprise
Sole proprietorships
General partnerships
Limited partnerships
Limited liability partnerships
Limited liability companies
Business corporations
Professional corporations
S corporations
Close corporations

4. Sole Proprietorship
Business owned and operated by one person

5. General Partnership
Business co-owned by two or more persons

6. Limited Partnership
Business created under a state statute in which some partners have limited liability

7. Limited Liability Partnership
Business entity providing limited liability for its partners

8. Limited Liability Company
Business providing limited liability and pass-through tax status for its members

9. Business Corporation
Legal entity existing under the authority of the state legislature

10. Professional Corporation
Corporation formed by professionals, such as doctors, lawyers, accountants, and engineers

11. S Corporation
Corporation that passes through all income to its shareholders, who pay tax on income received

12. Close Corporation
Small corporation whose shareholders are active in managing the business and that operates informally

13. Considerations in Selecting a Business Enterprise
Ease of formation
Management
Liability and financial risk
Continuity of existence
Transferability
Profits and losses
Taxation

14. Companies Indexed by Numbers of Employees (2004)
Size of Company
Number of Employees
Percent (%)
20-99 employees
856,000
11.6%
employees
154,000
2.1%
employees
12,000
0.2%
Over 1,000 employees
7,000
0.1%
Under 20 employees
6,359,000
86.1%

15. Agency Relationships Agent: One who acts for or represents another
Principal: The person for whom an agent acts

16. Duties Owed in Agency Relationships
DUTIES OWED BY AGENT
Performance
Notification
Loyalty
Accounting of Profits
DUTIES OWED BY PRINCIPAL
Compensation
Reimbursement and Indemnification
Cooperation

17. Key Features of Agency Relationships
Formation of agency occurs through express agreement, implied agreement, or estoppel
Agents have actual authority (express or implied) or apparent authority to act for their principals
Agents and principals owe fiduciary duties to each other
Agents are liable for their own torts and principals are liable for an agent’s torts and acts committed in the course and scope of the agency.