Legal Underpinnings of Business Law
Mia A. Rapier
BUS 670: Legal Environment
Instructor Leah Westerman
November 16, 2014
“Liabilities are debts: money you owe. Every business carries some liabilities—for example, ongoing payments to suppliers, rent for your office, compensation to employees, or fees for contractors” (Mancuso, 2014). Added liabilities may result if a business is ravaged by a fire or flood or if the business owner(s) become the victim of a lawsuit—for example, a patron, client or customer decides to sue your company after hurting themselves on company property. It is the intent of this paper to examine the role and responsibility of liability in different types of businesses from sole proprietorships to…show more content…
Tinker & Tailor’s Home Security Service: “Any voluntary association by two or more persons to conduct a business for profit as joint owners automatically results in the creation of a partnership by operation of law, whether or not the joint owners specifically intended it” (Seaquist, 2012). With that said, having a legal partnership agreement is advised to serve as a guide to the running of the business and to aid in any legal misgivings that may arise. General partnerships are “jointly and severally liable for all legal and financial obligations of the partnership and for all wrongful acts of any partner acting in the ordinary course of partnership business. Partnership income is taxed as personal income to the partners” (GOBED, 2012).
Tinker & Tailor’s Home Security Service: “The limited partnership form of business organization was primarily created to address one of the worst shortcomings of the traditional partnership form: unlimited personal liability for financial obligations incurred by the partnership” (Seaquist, 2012). Those involved in a limited partnership are in a unique situation in that they are only legally responsible for their investment in the partnership