Business Law - Business Options and Compliance - Book Report/Review Example

Business Law al Affiliation Business Law Part A. Business Options and Compliance Starting a business has never been easy. There are many considerations that have to be made. Whereas there are social and economic problems that might be easy and less complicated to handle, the legal issues are more complicated to even comprehend. These issues include the ability to make a proper choice of business options that will ensure that the entrepreneur achieve their goals and objectives without being limited by regulations which were not made clear before the establishment of the business. There are also an issue regarding the business compliance with laws and regulations. In as much as these compliance issues may be different depending on the locality of the business, there are basic and common considerations. This report will provide an insight on the available business options related to the computer business. Business options (vehicles) Being a sole proprietorship business, Sarah would wish to have a kind of business that is easy to establish and manage, and which gives her the time flexibility she requires. Various options are available. First, she could choose to buy an existing business. This gives the advantage of already laid down structures and customer base. She could also choose to start from scratch as an independent contractor in which case she will be able to establish the basics of the business and help in strategizing the growth. Similarly, she could choose to enter into a franchise agreement with established dealers who will then allow her to use their name. This is of great benefit especially where the other organization has a good reputation in the market. All these options have cost implications. These are related to the general stocking of the business, letting of premises, buying of the requirements such as furniture and stationery and other miscellaneous costs. Starting a new business as an independent contractor has extra expenses of registering a business and obtaining operation permits and licences. The legal duties involved it these are rather expensive but once established, and operations are self-directed and manageable. Besides registration and licensure, other compliance issues include tax compliance and public health issues. The company also must have a defined structure and objects of the operation under which it is established. It would be a wrong idea, however, to choose an online business as an option. Even if this kind of option allows better flexibility, there is little business security and compliance with regulations is not easy for a start-up. She should also avoid joint ventures before the business is established. This will prevent instances in which her business is taken advantage of, and there is unequal bargaining power. Part B. Business Agent and Solving of Problems Having established a business, Sarah wishes to have an agent operating on her behalf. According to the business law, an agent is a person, other than the owner or an employee of a business who is authorised to act and transact on behalf of the business or a company. In this case, the agent will be working and doing business on behalf of Sarah and her business (the principal). The legal issues related to having an agent are several. First, the agent works on behalf of the principal. This, therefore, means the accountability remains with the principal. In the case of any issues related to the product, the principal retains accountability. Secondly, an agent should be an entity or a person who will only be involved with sales and buying of goods and not services provision. Therefore, an employee cannot be an agent. Thirdly, the agent must be duly registered and licenced to undertake the duties that the principal bestows on them. Also, having an agent is a formal agreement that should have a written contract. The agent and the principal must act within the terms of the contract as long as their relationship exists. The duration of the relationship should be indicated on the contract (Clarkson et al., 2012). The duties of the principal in this relationship include acting dutifully and in good faith regarding dealings with the agent, allow the agent to work with autonomy and give all the necessary documents relating the goods to be sold, notify the agent in due time of any changes in prices and transactions. The duties of the agent on the other hand include acting on the best interests of the principal, ensure communication with the principal regarding any issues in the transactions, and comply with the reasonable instructions from the principal and to act only within the authority described in the agency contract. It is also the duty of the agent to avoid any secret transaction with the principal’s goods. Further, the authority of the agent should not be delegated (Clarkson et al., 2012). These duties are included in the law. Any breach of the duties that lead to damage on any one of the parties is treated as negligence. The penalties provided by the law depend on the extent of damage. When the level of negligence results to loss of property and other types of losses such as reduced customer loyalty. A court of law would determine the party that breaches the contract owes the other duty of care and compensation as should be paid. If, however, the breach only destroys the relationship, the contract is terminated, and the defendant pays for any damage. Solving Problems Problems in business must not always be solved in a court of law. Amicable solutions are available. These are even cheaper and easier to comply (Clarkson et al., 2012). In the case of the customers who owe Sarah money, a solution could be arrived at by having an agreement with the customers, in the presence of a solicitor on the terms of payment. An option in this case would be having the money paid in instalments of the ultimate repossession of the commodities. If the customers are to pay for the commodities in instalments, then the only problem will be delayed payment. However, there will be time saved on avoidance of a formal court process which will also demand funds from Sarah and may even reach a similar conclusion after a long time. Repossession of the commodity is possible where the customer is unable to pay for the commodity given all the options. In this case, Sarah will probably incur some losses but will have solved the problem within a short time. Customer complaints can also be addressed outside the courtroom. Sarah and her agent should be able to identify the dissatisfaction among the customers before they can file lawsuits. This will help in having a resolution discussion with the customers to identify the problem and fix it. This is easier and cheaper that having to wait for a court summon. Even in this case, a solicitor or legal advisor is required. Reference Clarkson, K. W., Miller, R. L., Cross, F. B., & Clarkson, K. W. (2012). Business law: text and cases : legal, ethical, global, and corporate environment. Mason, OH, South-Western Cengage Learning. Read More