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Presentation on theme: "Fundamentals of BUSINESS ORGANIZATIONS FOR PARALEGALS Third Edition"— Presentation transcript:

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.

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