Business law is a discipline in business that deals with the establishment of new businesses and the concerns that ascend as prevailing businesses intermingle with the community, other corporations and the government. The business law as a discipline comprises of tax, intellectual property, real estate, sales and employment laws.
The business law considers all businesses as bodies distinct from their owners. Business entities are subject to legal rules and regulations. The rules bring us to the law of agency. The law of agency is a section of the law that deals with the agent and the principal. The agent is an individual or entity that has the authority to work on behalf of another. The principal is the individual or entity that the agent works on behalf. The agency theory, therefore, is a relationship between the principal and the agent. This is where the agent works under the regulation of the principle or on his or her behalf.
According to the supervisor’s instructions, the three types of principles are a part of the discussion with staff. The full disclosure principle, or the disclosed principal, sees to it that the principal discloses all material information to the agent. Thus, the information can be disclosed directly in the financial statements or indirectly in the notes to the books of accounts. Based on the organization’s prevailing conditions, the situation of the books of accounts needs to be disclosed if the liabilities and assets of the organization are relatively unstable.
…………………………………middle of paper………………………………..
In conclusion, the agency theory is an important piece of an organization, and it is the duty of the organization’s management and staff to come up with the best principal to apply to realize their goals.
Are you ready to order a custom essay from us ? Place your order with us today.