LEGAL AND ETHICAL ISSUES IN MANAGEMENT 1Legal and Ethical Issues in Management NameInstitution
LEGAL AND ETHICAL ISSUES IN MANAGEMENT 2Legal and Ethical Issues in ManagementIn the nineteenth century in both England and the US, most businesses came into being asa result of the partnership, although the law that was guiding this relationship was muddled (Mayer et al., n.d.). Hence many chaotic cases erupted during this period. In the US, most common forms of business are sole proprietorship, general partnership, limited liability company, and corporations. Every type of business structure has both its advantages and disadvantages. Therefore, for any businessman venturing into any type of business should understand the legal environment surrounding the business operation. In the below paper, a business legal environment will be discussed. Comparing Partnership, Corporation, and Limited Liability CompanyPartnership A partnership can be described as a legal form of business where two or more individuals come together to share management and profits (Mayer et al., n.d.). In the US, the federal government recognizes two major types of partnership; limited partnership and general partnership. In the US more than 10 percent of businesses are formed through partnership thoughthe majority is a small and medium-sized business. Therefore, a partnership business is not limited to individuals, but can also be between different enterprises (Mayer et al., n.d.). A partnership can either be created through a written agreement or oral agreement. It is generally easy and less costly to form compared to a corporate kind of business or a limited liability company. This form of business, the impact of business, can be resolved using the partnership agreement that points out the rights and roles that every partner is accorded within the partnership. Usually, a partnership offers the best way of bringing together different forms of ideas and talents to run a business.
LEGAL AND ETHICAL ISSUES IN MANAGEMENT 3The CorporationCorporations in the United States are about 18 percent and rise about 82 percent in revenue annually (Mayer et al., n.d). Unlike a partnership agreement, the corporation creates a board that oversees the operations of the business. They also set goals for the management and hold them accountable to achieve the set goals. Its advantage over partnership varies from limited liability for shareholders, specialized management, accessibility to more financial resources, and continuity of the business (Mayer et al., n.d). The chances are that in partnership, in case one person between Gemma and James dies, the business might fail or be dissolved. The corporation is built on the legal life separate from the owners, and therefore it can forever exist even when one owner dies. The transfer of ownership in the corporation is simple as shareholders are only required to sell their shares to others but not to the general public. The power to acquire funds from the banks and other lending bodies for corporations is very high compared to that of partnership. It is vital for the management of the small organizations to not