Business organizations
From Biocrawler, the free encyclopedia.
"Business organizations" is an area of law that covers the broad array of rules governing the formation and operation of different kinds of entities by which individuals can organize to do business. The term is also used to describe the entities themselves.
The most commonly addressed business organizations are the partnership, the limited partnership (LP), the corporation, and the limited liability company (LLC). Lesser known business forms include the limited liability limited partnership (LLLP), and the limited company (LC). Although the study of business organizations usually addresses the sole proprietorship, this is a single-person operation, and therefore not truly any kind of organization.
Law schools typically offer either a single upper level course on business organizations, or offer several courses covering different aspects of this area of law. Such a course will examine issues such as how each major form of business entity may be formed, operated, and dissolved; the degree to which limited liability protects investors; the extent to which a business can be held liable for the acts of an agent of the business; and the structures established by governments to moniter the buying and selling of ownership interests in large corporations.
The basic theory behind all business organizations is that, by combining certain functions within a single entity, a business (usually called a firm by economists) can operate more efficiently, and thereby realize a greater profit. Governments seek to facilitate investment in profitable operations by creating rules that protect investors in a business from being held personally liable for debts incurred by that business, either through mismanagement, or because of wrongful acts.
The law of American business organizations originally derived from the common law of England, but evolved significantly in the Twentieth Century.
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